New York Regulators Approve Settlement Agreement Allowing Dispensary Openings to Resume

The more than 400 Conditional Adult Use Retail Dispensary (CAURD) licensees whose business plans have been halted under a court order will be able to open up shop soon, pending court approval, after New York regulators approved a settlement agreement in a lawsuit filed in August.

The New York Cannabis Control Board (CCB) voted at its Nov. 27 meeting to approve the settlement agreement, which will now be presented to the New York State Supreme Court. With the court’s final approval, the settlement agreement would allow regulators to continue the state’s CAURD program.

“Today's approval of the settlement agreement by the New York State Cannabis Control Board marks a momentous step forward in our mission to cultivate a diverse and inclusive cannabis market,” CCB Chair Tremaine Wright said in a public statement. “Once this settlement is approved, we are hopeful those impacted by the injunction will be empowered to open their storefronts and embark on their entrepreneurial journeys, bringing us closer to our goals. I extend my sincere gratitude to Gov. Kathy Hochul, the Office of Cannabis Management team and our esteemed Board members for their unwavering support. Together, we will forge an exhilarating new chapter in New York's cannabis narrative."

New York Gov. Kathy Hochul introduced a “Seeding Opportunity Initiative” in March 2022 to prioritize social equity applicants in the state’s adult-use cannabis licensing process. The plan included issuing CAURD licenses to those with past cannabis-related convictions and nonprofit organizations that assist or provide services to those individuals.

In August 2023, a group of four service-disabled veterans—Carmine Fiore, William Norgard, Steve Mejia and Dominic Spaccio—filed a lawsuit arguing that the New York Office of Cannabis Management (OCM) violated state law when regulators excluded them and other groups from adult-use cannabis licensing opportunities.

In response to the lawsuit, State Supreme Court Judge Kevin Bryant issued a temporary injunction Aug. 7 in Albany County to block state regulators from issuing new CAURD licenses and approving new dispensary openings.

Although the court has since allowed a few exceptions to the injunction and allowed a handful of new dispensaries to open, 436 CAURD licensees were ultimately left in limbo under the court order.

RELATED: New York Regulators Drop Consideration of Lawsuit Settlement From Meeting Agenda, Continuing Licensing Injunction

Meanwhile, New York officials approved revised cannabis regulations in September that not only paved the way for the state’s existing medical cannabis operators to enter the adult-use market, but also opened a new application window for adult-use businesses. The application period, which runs from Oct. 4 through Dec. 18, marks the end of the exclusive licensing process for social equity applicants in New York.

Upon the New York State Supreme Court’s final approval of the settlement agreement in the lawsuit that has stalled the CAURD licensing process, the 436 provisional CAURD licensees whose businesses have been held hostage under the temporary injunction will be allowed to open their storefronts once the remaining portions of their applications are confirmed.

“We launched the CAURD program squarely focused on realizing the commitment made by the [Marihuana Regulation and Tax Act] MRTA, that those most impacted by prohibition would have a meaningful opportunity to participate in New York’s cannabis market,” OCM Executive Director Chris Alexander said in a public statement. “Today, we are one step closer to resolving litigation brought forth by equity entrepreneurs and our medical operators who felt that they were being left behind. Now that we have opened up licensing to all equity entrepreneurs and provided a clear pathway to participation in the adult-use market for our medical operators, we are able to continue to move this program forward together.

“New York’s cannabis market was designed to be the most equitable market in the world. We remain undeterred by the challenges of standing up that new market, and believe that the expansion of licensing opportunities and the inclusion of our medical operators will collectively ensure the success of the adult-use program and the expansion of the medical program. I have been deeply inspired by the grit and tenacity of our CAURD license holders. I want to thank Gov. Hochul for her steadfast commitment to this effort, and we look forward to working together with licensees and partners across the industry to shape this new chapter in New York’s cannabis story.”