NY Cannabis Insider’s week in legal weed for Feb. 3, 2024

Happy weekend, everyone,

The groundhog yesterday said it’ll be an early spring, while weather people disagree – a classic case of nature versus science. While you ponder that on this Saturday, why not pour a cup of coffee, pack a bowl and take a look at the stories we covered in NY Cannabis Insider this week.

Here’s a look at the stories we ran:

Yesterday we published a story about the frustration multiple stakeholders are feeling, as the Office of Cannabis Management seems to be significantly shifting goalposts during New York’s first-ever weed industry general licensing process.

Legacy operators, minority women and industry consultants are calling the OCM’s licensing scheme “alarming” and say the agency has again changed their own rules and processes at the last minute.

The state’s problems don’t end there. Gov. Kathy Hochul this week called the rollout a “disaster” and pointed to conflicts between the Cannabis Control Board and OCM leadership. Additionally, the CCB and OCM are facing three more lawsuits that take issue with this current round of licensing – all of which seek an injunction.

We updated our running list of state and federal lawsuits that plaintiffs have filed against the OCM, which now includes three new entries. In one of the new cases, the plaintiff alleges that regulators’ social equity provisions – some of which provide some advantages to cannabis based on race and gender – are unconstitutional.

A plaintiff in another case takes issue with the fact that OCM officials didn’t notify applicants that candidates with “extra priority” status would get three spots in the licensing queue, while everyone else got one. And another suit, filed in federal court, argues the CAURD program and extra priority benefits violate the U.S. Dormant Commerce Clause.

James B. Mann, an attorney specializing in cannabis tax and tax accounting issues, contributed a guest column in which he argues that Gov. Kathy Hochul’s proposal to repeal New York’s potency-based cannabis tax structure with a 9% wholesale tax would hurt the industry.

“The Governor’s office has contested the notion that its latest proposal would result in an approximate 30% tax on cannabis products,” Mann wrote. “While the estimate of 30% may have been high, it is certainly not the 15% or so that the Governor’s office suggests.”

Lastly, we posted attorney Jeffrey Hoffman’s latest Ask Me Anything segment, in which he answered questions about adult-use home-grow regulations, the potency tax, and more.

Have a great weekend everyone, we’ll be back with plenty more next week.

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