A judge in the New York State Supreme Court granted a temporary restraining order freezing the Conditional Adult-Use Retail Dispensary (CAURD) program. The order came after four service-disabled veterans filed a lawsuit against the state's cannabis regulators on August 2nd. The veterans claim that the state didn't prioritize them when issuing the first batch of dispensary licenses. They also argue that the CAURD program's expansion lacks a proper foundation in the Marijuana Regulation and Taxation Act (MRTA).
The CAURD program was established separately from the MRTA to carve out space for applicants with cannabis-related criminal convictions and prior business experience. The judge’s temporary order prevents the Office of Cannabis Management from processing or approving any pending CAURD applications until a decision is reached. This leaves many Western New York CAURD licensees frustrated as they continue to wait for what’s next.
As of this writing, 23 WNY businesses have been awarded CAURD licenses. Dank 716 and Herbal IQ are the only businesses with retail stores that are up and running and Canterra is operating WNY’s only legal delivery option. Premier Earth, another CAURD licensee, met all the requirements for State approval before the injunction was instituted, so they are exempt from the injunction and are expected to open soon. That leaves 19 provisional CAURD licensees from WNY that are stuck in “CAURD purgatory”.
The Cannabis Association of New York hosted a CAURD Conversations call on a Wednesday night in August, following the news of the injunction. Many provisional licensees expressed despair as some stated that they remortgaged their homes, quit their jobs, and invested their savings into their businesses. Some of them had already signed leases and contracts with payments due in the near future.
In an email sent to provisional CAURD licensees on August 21st, the OCM explained how these licensees can pursue exemptions from the injunction. The OCM requested proof of costs incurred before the date of the injunction on August 7th.
Examples of costs incurred include real estate, consultants, legal assistance, accounting, recruitment, and other staff-related commitments, staffing salaries and any related benefits, dispensary construction, renovation or buildout, equipment purchases, technology purchases, marketing, and advertisement.
The OCM will then present this information to the Court for consideration to be excepted from the injunction. If accepted by the Court, the provisional licensee will be allowed to move forward in the process of opening their dispensary.
This lawsuit echoed an argument from a similar suit challenging the CAURD program filed by the Coalition for Access to Regulated and Safe Cannabis (CARSC). CARSC represents many of the companies that own vertical medical cannabis licenses in New York.
Many entrepreneurs that didn’t qualify for the CAURD program, are eager to apply for retail dispensary licenses. Despite rumblings of an October application release date, New York has yet to formally announce, let alone roll out, an application process for non-CAURD retail dispensary licenses.