Retail cannabis receives green light in Brooklyn

In what could prove to be a major development for the North American cannabis market, a federal appeals court has overturned parts of a restraining order that blocked certain parts of New York from opening licensed cannabis dispensaries. 

“For the first time, New Yorkers in nearly every region of the state will have access to safer, high-quality, adult-use cannabis products,” Governor Kathy Hochul said in a statement on the decision. “I am committed to ensuring New York continues to lead the nation in our safe and equitable approach to the cannabis market.”

Legal, retail cannabis can now be sold in Brooklyn, the Mid-Hudson region, Central New York and Western New York.

The Finger Lakes region is still barred from receiving a legal dispensary under court order, for now.

New York cannabis officials are expected to announce a new batch of licenses for applicants in the state’s social equity program soon, meaning a legal dispensary could open in Brooklyn in the coming weeks or months.

The initial injunction stemmed from a lawsuit challenging New York’s social equity program for cannabis entrepreneurs, which prioritises licenses for people affected by past weed convictions through the state’s Conditional Adult Use Retail Dispensary program.

A company called Variscite NY One applied for one of these licenses and then filed a lawsuit against the state in September alleging that the owners of the company would likely be denied a license because they didn’t meet the program’s residency requirements. Variscite argued that this discriminated against non-residents and violated the Dormant Commerce clause of the Constitution.

As a result of the suit, in November, the federal court in New York’s northern district issued an injunction that temporarily blocked state officials from issuing dispensary licenses in Brooklyn and other regions.

In a motion seeking to lift or narrow the injunction, state officials argued that Variscite actually fulfilled the requirement to have a significant presence in New York by being registered here – but that the company does not meet the criteria for a license anyway. Majority owner Kenneth Gay has a past marijuana conviction in Michigan – not New York, as required under the CAURD program.

The state suggested that if the injunction was not lifted while the case was argued in court, at least it could be narrowed to only apply to the Finger Lakes region, which Variscite listed as its top choice for a dispensary location. The other regions were listed as alternatives.