New Lawsuit Against New York Cannabis Agency Filed

The New York-based Coalition for Access to Regulated & Safe Cannabis (CARSC) recently filed a lawsuit against the Office of Cannabis Management (OCM) on March 16. CARSC is an “unincorporated trade association” that includes a handful of organizations, including Acreage Holdings, PharmaCann, Green Thumb Industries, and Curaleaf, all of which sought to apply for a dispensary license in New York.

The lawsuit is requesting a judge to declare Conditional Adult-Use Retail Dispensary (CAURD) as unconstitutional, and state that the OCM and Cannabis Control Board (CCB) have overstepped their authority.

The lawsuit was filed with the Albany County Supreme Court by Feuerstein Kulick, claiming that the 2021 Marijuana Regulation and Taxation Act required both the OCM and CCB “the initial adult-use retail dispensary license application period … for all applicants at the same time.” Both agencies made the CAURD, which created a new license class, and allowed specific groups to apply for it, rather than “all applicants.”

“Rather than perform the tasks required by the MRTA—which would promote a safe and regulated cannabis industry for medical patients and adult-use consumers alike—CCB and OCM have improperly assumed the role of the Legislature to impose their own policies over those of New York’s elected officials and, by extension, their constituents,” the lawsuit states, according to

The lawsuit alleges that the CCB and OCM didn’t complete the requirements of the MRTA, and instead abused its power to create the CAURD. CAURD originated from New York Gov. Kathy Hochul’s Seeding Opportunity Initiative that was announced in March 2022, which “position individuals with prior cannabis-related criminal offenses” to earn one of 150 licenses, and an additional 25 to nonprofit organizations. It requires that an applicant must have been convicted of a cannabis crime in the state of New York, and also must have a “significant presence.”

The lawsuit alleges that a 20-month delay in proposed cannabis regulations is a violation of state law, among other evidence, including having cultivators grow thousands of pounds of cannabis without having retail businesses set up to sell it all.

In July 2022, OCM Executive Director Chris Alexander spoke with NY Cannabis Insider about the threat of a lawsuit such as this one. “I don’t have a concern about the challenge towards the retail opportunity, because the board has the power to create additional licenses,” Alexander said. “We think about legal challenges that may come to the program, but that’s why we stay as close to the law and the powers that law has given us as possible.”

One month before the CAURD application window ended in October 2022, a different lawsuit was filed that prevented the OCM from issuing licenses in five out of 14 areas: Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn. The lawsuit alleges that CAURD violates the Dormant Commerce Clause, which “refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce.”

Another lawsuit filed by Variscite NY One, a Michigan-based company, was denied a license because it is 51% owned by an individual who has no “significant presence” in New York, and has a cannabis conviction in Michigan, not New York. states that 66 CAURD licenses have been issued so far, with the CCB announcing in March that it plans to increase the pool of licenses to 300. 

Sen. Jeremy Cooney, who co-sponsored the MRTA, addressed the concerns of the lawsuit in a statement to NY Cannabis Insider. “When we passed the MRTA, there was an understanding that the rollout of adult-use recreational cannabis and expansion of New York’s medical cannabis program would be complex, and encounter obstacles,” Cooney said. “While a potential lawsuit is undoubtedly a new challenge, we must not allow it to become a roadblock to progress. We must continue our efforts to deliver for operators, patients, and consumers as the legal process unfolds. We are committed to increasing patient access for the medical program and creating equity in the recreational market.”

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New Jersey Cultivation Cap Expired, But Real Estate Issues Remain

New Jersey’s cannabis legalization law initially went into effect in 2021 with a cultivator cap set at 37 licenses. Adult-use sales launched in April 2022, but at the time only seven cultivators were licensed to supply cannabis 13 dispensaries across the state. Last month, the Cannabis Regulatory Commission (CRC) allowed the cap to expire on Feb. 22.

“The market is developing, and we don’t want to hinder that. The New Jersey canopy is currently only 418,000 square feet—far below the average of other states with legal cannabis,” said Commissioner Maria Del Cid-Kosso. “New Jersey currently has only one cultivation license for every 197,000 residents. The national average is one license for every 31,000 residents. We have a lot of room to grow. We expect that lifting the cap will open the space for more cultivators, ultimately resulting in more favorable pricing and better access for patients and other consumers.”

As of March 2, the CRC has granted licenses to 17 operational cultivation facilities. But even with the cultivation license cap change, many New Jersey municipalities have opted out of adult-use cannabis. One year ago, the Ashbury Park Press reported that nearly 400 towns had opted out of being home to any cannabis businesses. The co-founder and president of New Jersey-based Premium Genetics, Darrin Chandler Jr., told MJBizDaily that finding potential real estate opportunities is “almost impossible,” and described prices as “astronomical.”

On the patient side, New Jersey is still the only state with a medical cannabis program that does not allow patients to grow at home. In the past, many bills have been introduced to permit home cultivation to allow medical cannabis patients to grow for personal use. Bill S342, which is sponsored by Sen. Troy Singleton and Sen. Vin Gopal, would allow patients to cultivate at home. However, a report from Politico states that opposition from Senate President Nick Scutari is a significant roadblock for the bill.

New Jersey’s industry is continuing to attract outside cannabis businesses. Brands such as Al Harrington’s Viola products are expanding into the state this month, starting on March 24 at RISE dispensaries. According to Harrington, he wants to expand his brand to support the local community. “I want to make sure that we are educating our community and empowering them with knowledge to understand the cannabis plant and the benefits that come from it,” Harrington told Business Insider.

Similarly, Raekwon of Wu-Tang Clan is preparing to open Hashtoria Cannabis Lounge in Newark, New Jersey as well. “Getting excited yall!!! @hashstoria coming to the brick city !!!!! This is going to be flyest consumption lounge to hit the east coast. This will be monumental ! All hail to the mighty green ! Be strong, be wise and be the best version of you!!! #newjersey #cannabis #hashstoria” Raekwon recently wrote on Instagram.

Recently, the CRC held a public comment period to discuss its draft rules for cannabis consumption rules, which ends on March 18. This includes restrictions for on-site food sales, but permits food to be delivered or brought in from outside, and prohibition of tobacco and alcohol sales on-site.

In late February, the New Jersey Attorney General released an updated drug testing policy for law enforcement. Under the new revision, law enforcement officers will only be drug tested if they appear intoxicated at work. “Agencies must undertake drug testing when there is reasonable suspicion to believe a law enforcement officer is engaged in the illegal use of a controlled dangerous substance, or is under the influence of a controlled dangerous substance, including unregulated marijuana, or cannabis during work hours.”

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Washington Social Equity Application Nears Deadline

The state of Washington is set to dole out more than 40 new cannabis retail licenses this month to so-called social equity applicants––but the deadline is fast approaching. 

With the application period kicking off on March 1, qualified prospective license holders have until March 30 to apply. 

The Washington State Liquor and Cannabis Board, a state regulatory agency overseeing the two industries, is handling the social equity applications. 

According to the agency, more than 40 licenses that “were forfeited, cancelled, revoked or never issued will be available in specific jurisdictions across the state” as part of the program.

The Washington State Liquor and Cannabis Board says that, in order to qualify for the social equity cannabis program, applicants must meet the following criteria:

“At least a 51 percent majority, or controlling interest, in the applicant, must be held by a person(s), who has or have resided in Washington state for six months prior to the application date, and meets at least two of the following qualifications: lived in a disproportionately impacted area (DIA) in Washington state for a minimum of five years between 1980 and 2010 … OR applicant or a family member has been arrested or convicted of a cannabis offense; OR household income was less than the median household income within the state of Washington ($82,400).” 

According to Axios, applicants “who have served time in prison for a cannabis offense will get higher priority when it comes to distributing the social equity licenses,” as will those applicants who “make less than the state’s median income, and who have lived in areas with high rates of drug convictions, poverty, and unemployment.”

Social equity provisions have become the norm in states that legalize recreational cannabis for adults, as advocates have stressed the importance of remedying harms inflicted on individuals and communities in the era of prohibition. 

But in Washington, which became one of the first two states to legalize recreational marijuana back in 2012, those social equity provisions did not come until later. 

The ballot measure approved by voters there more than a decade ago, Initiative 502, “did not include provisions or create programs to acknowledge the disproportionate harms the enforcement of cannabis laws had on certain populations and communities,” the Washington State Liquor and Cannabis Board explained earlier this year, when it announced the more than 40 social equity applications that would be made available

The state created the social equity cannabis program in 2020, when the state’s Democratic governor, Jay Inslee, signed a bill into law that provided “the opportunity to provide a limited number of cannabis retail licenses to individuals disproportionately impacted by the enforcement of cannabis prohibition laws.”

“The LCB recognizes that cannabis prohibition laws were disproportionately enforced for decades and that the cumulative harms from this enforcement remain today,” the agency explains on its website. “In 2020, in response to a policy priority identified by the Board, the LCB developed agency-request legislation created the state Social Equity program, the Social Equity in Cannabis Task Force and the opportunity to provide a limited number of cannabis retail licenses to individuals disproportionately impacted by the enforcement of cannabis prohibition laws.”

But the state clearly still has a lot of work to do; as Axios noted, more than 10 years after the voters there made history, Washington’s cannabis industry “remains dominated by white entrepreneurs.”

The State Liquor and Cannabis Board reported in January 2020 that 82% of cannabis retailers in Washington were owned by white individuals. Only 3% were owned by Black residents, and 2% were Hispanic-owned. 

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Georgia House Passes Bill To Increase Medical Pot Licenses

The Georgia House of Representatives passed a bill on March 7 that would expand the number of medical cannabis licenses available. The passage of House Bill 196, which received 170 votes in favor and only two opposed, would boost the current license number of six to 15. According to the Capitol Beat, the passage of this bill is to address the lawsuits that the state of Georgia has received from cannabis businesses that were denied a license.

Although Georgia first legalized medical cannabis oil possession in 2015, it took four years for legislators to introduce bills that would regulate cannabis cultivation and sales. In 2019, six licenses were issued in total, including two Class 1 licenses (for cultivation up to 100,000 square feet) and four Class 2 licenses (cultivation up to 50,000 square feet). 

This includes two Class 1 licenses owners Botanical Sciences LLC and Trulieve Georgia, and four Class 2 licenses that were delayed due to numerous lawsuits, which caused the suspension of all chosen applicants.

Initially, the Class 2 licenses were awarded to FFD GA Holdings, TheraTrue Georgia LLC, Natures GA LLC, and Treevana Remedy Inc. in July 2021. Protests were filed by applicants who were not chosen. According to Kristen Goodman, the lawyer representing these four of the applicants who did not win a license, the license process was a “train wreck.” She also stated that the two licenses that have been confirmed went to out-of-state companies. “They’re not serving the children who have excessive seizures in Northwest Georgia. They’re not serving the children with cancer in Southwest Georgia,” said Goodman. “They have all the market they need right here in the central part of the state.”

In an attempt to remedy the situation, the House introduced HB-1425 in February 2022 which would have completely started the license process over from scratch. The Senate offered a substitute to HB-1425 that would ask the Georgia Access to Medical Cannabis Commission to award licenses to six applicants, but not specifically the same six applicants that were originally chosen. Ultimately, the House bill was shut down and the Senate version advanced, but eventually died at the end of 2022.

Rep. Alan Powell spoke to legislators on March 6 about the necessity of HB-196 as a way to resolve the ongoing issue. “Let’s fix the system,” said Powell. “Let’s get it moving and go forward.”

The HB-196 also requires that a Medical Cannabis Commission Oversight Committee be created to manage “membership, inspections, provision of information, plan for accredited lab testing, and patient and physician input.” If passed, it would also allow the commission to increase the number of dispensaries based on how many medical cannabis patients are registered. Every increment of 5,000 patients would allow an additional Class 2 license, and every 10,000 patients would allow an additional Class 1 license, in order to keep up with demand. As of February, there are almost 25,000 medical cannabis patients on the state registry.

Now HB-196 moves on to the Senate for consideration.

In the meantime, owners of Botanical Sciences LLC and Trulieve Georgia are moving forward with their respective businesses. Botanical Sciences CEO Gary Long told Georgia Public Broadcasting about his progress. “We have already begun the production process, which starts with the seeding of cannabis plants in our indoor growing facility producing a variety of tinctures, capsules, and topicals formulated to address the needs of Georgia patients,” Long said. “The opening of our facility was a key milestone for our company, for the city of Glennville, and for the many thousands of those in need awaiting access to this critical form of medicine.”

Trulieve released a press statement on Dec. 6, 2022. “Trulieve is thrilled to receive a Georgia cannabis production license and we appreciate the Commission’s diligence throughout the selection process,” said Trulieve CEO Kim Rivers. “We look forward to educating the Georgia market on the numerous health and wellness benefits of cannabis, as well as providing patients statewide access to the medical cannabis they have been seeking.”

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Illinois Extends Craft Grower Deadline

Regulators in Illinois have extended the operational deadline for some craft cannabis growers in the state. 

The state’s Department of Agriculture said that its administrative rules “allow for craft growers to receive an operational extension for good cause shown, at the Department’s discretion,” and as such, it “has granted an operational extension to all craft grower license holders due to a number of factors, including ongoing Covid-19 impacts and supply chain issues.”

Under the state’s adult-use cannabis program, a “craft grower license allows the holder to cultivate, dry, cure and package cannabis,” according to Illinois Cannabiz Attorneys, which offers a primer on the license:

“To apply for this license, one must submit a completed application to the Department of Agriculture. The amount of cannabis a license holder can grow is limited by square footage. A craft grower may have up to 5,000 square feet of canopy space for marijuana plants in the flowering stage. It should be noted that this space only includes the space occupied by the plants and does not include any aisles or walkways in between the plants. This amount may be increased over time in increments of 3,000 square feet based on the department’s determination of market need, capacity, and the license holder’s history of compliance. The largest space that will be allowed by the Department will be 14,000 square feet for plants in the flowering stage.”

The Department of Agriculture said that it had “previously authorized an operational deadline extension for 2021 Craft Growers which required them to become operational by March 1, 2023,” but that it “is now authorizing an additional extension applicable to all 2021 Craft Growers, extending their operational deadline to February 1, 2024.”

Legal adult-use cannabis sales took effect in Illinois in 2020, the result of a bill signed by Democratic Gov. J.B. Pritzker the previous year.

“As the first state in the nation to fully legalize adult-use cannabis through the legislative process, Illinois exemplifies the best of democracy: a bipartisan and deep commitment to better the lives of all of our people,” Pritzker said at the time. “Legalizing adult-use cannabis brings an important and overdue change to our state, and it’s the right thing to do. This legislation will clear the cannabis-related records of nonviolent offenders through an efficient combination of automatic expungement, gubernatorial pardon and individual court action. I’m so proud that our state is leading with equity and justice in its approach to cannabis legalization and its regulatory framework. Because of the work of the people here today and so many more all across our state, Illinois is moving forward with empathy and hope.”

The state hasn’t looked back ever since. In his “state of the state” address last month, Pritzker said that marijuana legalization “has created more than 30,000 jobs since 2020, and Illinois is home to the country’s most diverse cannabis industry and some of the largest companies.” 

In January, Pritzker’s administration touted a record-setting year for cannabis sales in 2022, saying that “adult use cannabis dispensaries sold $1,552,324,820.37 worth of product, an increase of more than 12% from 2021 and 131% from 2020, the first year cannabis sales were first legally allowed in Illinois.”

“When I signed the Cannabis Regulation and Tax Act into law in 2019, we set out on an ambitious goal: to create the most equitable and economically prosperous cannabis industry in the nation. Our data from 2022 shows that we are well on our way towards making that idea a reality,” Pritzker said in a statement in January. “Not only did we break our previous sales record by more than 12% with a total of more than $1.5 billion, we also saw the first of our social equity adult use cannabis dispensaries open their doors for business—paving the way for an even stronger 2023.”

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Legalization Bill Moving Along in Hawaii Legislature

A bill to make Hawaii the next state to legalize recreational cannabis cleared a legislative hurdle this week.

The legislation “advanced out of two state Senate committees Thursday — and is now moving to the full senate,” according to local station HawaiiNewsNow.

Under the measure, adults aged 21 and older could legally possess and consume marijuana, while the state would regulate and oversee a cannabis market. 

The station said that the bill was “approved by the Consumer Protection and Ways and Means Committees.”

According to local news station KHON2, the chair of the Consumer Protection Committee “chose to provide some proposals on amendments that had been integrated to cover issues that had been raised in earlier hearings.”

Per the station, those amendments are: “1. Language was added to establish civil penalties for unlicensed cannabis growth and distribution activities; 2. Language was added that protects employers who seek to prohibit cannabis use amongst their employees; 3. Prohibition of advertising within 1,000 feet of any youth-centered area; 4. Proposed licensing of cultivation, manufacturing, testing and retail facilities that ensure a properly regulated industry while also preventing future consolidation and monopoly control of cannabis dispensaries.”

Democratic state Sen. Jarrett Keohokalole, who chairs the Consumer Protection Committee, said that the bill’s approval by the two senate committees marked “a significant step forward in the legalization of adult-use cannabis in Hawaiʻi.”

“These amendments are reflective of the Senate’s commitment to ensuring a fair and well-regulated cannabis market that provides safe access to both adult consumers and existing medical patients,” said Keohokalole, as quoted by KHON2.

Democrats control both chambers of the Hawaii state legislature. The state’s Democratic governor, Josh Green, who was elected and took office last year, has said that he would sign a cannabis legalization bill if it were to land on his desk.

“I think that people already have moved past that culturally as a concern,” Green said during a gubernatorial debate in the fall. “But here’s what I would do. First of all, if marijuana is legalized, it should be very carefully monitored, and only done like cigarettes, or I’ve been very careful to regulate tobacco over the years. We should take the $30 to $40 million of taxes we would get from that and invest in the development and recreation of our mental healthcare system for the good of all.”

An adviser to the governor reiterated that support this week.

“Governor Green supports legalized use of cannabis by adults, providing that any legislation that emerges protects public safety and consumers, and assures product safety with testing and tracking. The Governor also seeks to ensure the continued viability of our medical cannabis industry. Because these are complicated issues, he has encouraged his departments to state their concerns, and to make suggestions if there are ways to mitigate them. If a bill passes the legislature that accounts for his primary concerns, he has indicated he will likely sign it,” the adviser said in a statement, as quoted by HawaiiNewsNow.

Moreover, there is broad public support for legalization among Hawaiians. 

A poll released earlier this year found that more than 50% of residents there support the legalization of adult-use marijuana.

But while the bill is widely expected to pass out of the Hawaii state Senate, it is “likely to run into strong opposition in the state House,” according to HawaiiNewsNow.

The station reported that the speaker of the state House of Represenatives, Scott Saiki, has “said the state is not ready this year.”

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San Diego Receives Cannabis Equity Grant To Boost Local Weed Industry

At long last, San Diego is receiving grant money from the state as part of a program designed to help cities bolster their local cannabis industries.

The southern California city announced last month that it is receiving $880,000 from the Governor of California’s Office of Business and Economic Development (GO-Biz) as part of a statewide grant program aimed at promoting equity in the regulated marijuana market.

Under the initiative, California provided millions of dollars to cities throughout the state with their own cannabis equity grant programs.

Major cities such as Los Angeles, San Francisco, and Oakland all got in on the grant program. Last spring, officials in San Francisco announced that they had received $4.5 million from the state of California to fund its cannabis equity grant program.

But the $880,000 gift last month was the first such grant money to be awarded to San Diego. 

That is because San Diego didn’t establish its own grant program until last year, which, as the San Diego Union-Tribune noted, was “several years after other large cities like Los Angeles, San Francisco, Oakland, Sacramento and Long Beach.”

“Receiving this critical funding source is vital to jump-starting our Cannabis Equity Program,” Lara Gates, the deputy director of San Diego’s Cannabis Business Division, said in the city’s announcement. “These dollars will provide a solid foundation for our initial cannabis equity applicants to get a strong foothold in the legal cannabis market.”

In its announcement of the grant last month, the city said the the “money will support residents seeking to enter the legal cannabis industry in San Diego through funding grants to cover permit and license fees and associated start-up property costs while providing access to the cannabis industry workforce.” 

Those funds “will be dispersed locally, supporting the state’s effort to advance economic justice for populations and communities harmed by cannabis prohibition,” the city said in the announcement, adding that the grants “will help potential business owners pay for permitting and licensing fees, access education and training, and receive property rental assistance for entrepreneurship in various sectors that support local cannabis businesses,” which include “finance, marketing, advertising and legal services, among others.”

In determining the qualifications for the grant program, the city of San Diego “found the biggest hurdles to entering the industry are lack of capital, lack of training, problems finding suitable sites and complex government regulations,” according to the Union-Tribune.

“The historical enforcement of drug laws produced profound disparities in business ownership, wage earnings and mass incarceration within the criminal justice system for African American/Black, Latino and Native American/Indigenous communities,” Kim Desmond, the San Diego Chief of Race and Equity, said in last month’s announcement. “An acknowledgment of historic institutional racism and systemic inequity is key to understanding disparities in the cannabis industry.”

The money awarded to San Diego represented the “the seventh-largest grant, after Oakland and Los Angeles with nearly $2 million each, as well as Sacramento, San Francisco and Long Beach at $1.5 million each and Humboldt County with $1.2 million,” according to the Union-Tribune.

The city of San Diego said that it “was among 16 cities and counties across the state to receive a combined $15 million in grants, funded through tax revenue generated from statewide recreational cannabis sales.”

In its cannabis equity assessment last year, the city of San Diego found that Black and Latino residents accounted for roughly 50% of total cannabis arrests since 2015, although they comprise only 29% of the city’s population.

The assessment also found that nearly 70% of cannabis business license holders are white.

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New York Will Double Number of Cannabis Retailer Licenses

Regulators in New York announced this week that the state would double the number of cannabis retailer licenses, bringing the total number of Conditional Adult-Use Retail Dispensary (CAURD) Licenses for recreational marijuana dispensaries to 300 instead of the 150 originally planned. The new licenses, which will be selected from an existing pool of qualified business applicants, will be issued proportionally throughout New York, doubling the number of licenses in each of 14 regions of the state.

In a statement released on Tuesday, the Cannabis Control Board and the Office of Cannabis Management announced that increasing the number of licenses “will further advance New York State’s Seeding Opportunity Initiative, which provides for the state’s first legal adult-use retail dispensaries to be operated by those most impacted by the prohibition of cannabis or by nonprofit organizations whose services include support for the formerly incarcerated.”

“With this expansion, more entrepreneurs will be able to participate in the first wave of this industry, allowing them to capitalize on the growing demand for cannabis products,” said Tremaine Wright, chair of the Cannabis Control Board. “As more businesses enter this market, the innovation and competition will increase, leading to better quality experiences for consumers. The expansion of New York’s cannabis market will benefit everyone involved in this exciting industry.” 

New York’s Office of Cannabis Management (OCM) received about 900 applications for CAURD licenses from prospective business owners. To date, the Cannabis Control Board has issued 66 provisional CAURD licenses, with the first shop opening in late December. In April, the OCM will make recommendations to the board on the majority of the remaining applications in the areas of the state not impacted by a November court injunction blocking the agency from awarding retail dispensary licenses in five regions of the state.

$200 Million Fund To Support New York Licensees

The CAURD program, which provides licenses to justice-involved individuals, initially allowed for up to 150 businesses to receive a provisional CAURD license. This effort was enhanced through the creation of the New York State Social Equity Cannabis Fund, a $200 million public-private partnership providing renovated, ready-to-open retail locations to the 150 licensees. The OCM characterized the fund as a first-of-its-kind effort in the nation designed to help reduce the barriers independent entrepreneurs face in raising capital to launch a business in the cannabis industry.

“Doubling the amount of available Conditional Adult-Use Dispensary Licenses will help kickstart the growth of New York’s cannabis industry,” said Damian Fagon, the OCM’s chief equity officer. “More stores means more locations for New York farmers to sell their harvests, more convenience for New York customers to make the right decisions and purchase safer and legal products, and twice as many opportunities for New Yorkers harmed by over-policing during cannabis prohibition.”

In December, the OCM announced that CAURD licensees would also be allowed to secure their own business locations without seeking support from the social equity fund, potentially freeing up resources for some of the newly authorized CAURD licenses announced today. The initial 150 approved CAURD licensees will be prioritized to receive resources if they choose a location supported by the fund. Applicants chosen for the additional 150 CAURD licenses announced this week will be given access to any remaining fund resources.

“New York is doing something special when it comes to launching our cannabis industry, and now we’re doubling the impact of our Conditional Adult-Use Retail Dispensary program,” said Chris Alexander, executive director of the Office of Cannabis Management. “It’s been truly exciting to see the positive energy around our efforts to support entrepreneurs who previously suffered at the hands of New York State. We will continue creating real opportunities for qualified applicants who’ve been shut out from legal cannabis markets across the country.” 

Michelle Bodian, a partner at the cannabis and psychedelics law firm Vicente LLP, said that Thursday’s announcement offers new opportunities for entrepreneurs eager to enter New York’s cannabis industry.

“Doubling the number of available CAURD licenses drastically changes the calculus for hopeful CAURD applicants,” Bodian wrote in an email to High Times. “As only a limited number of licenses have been awarded to date, this expansion provides a huge first mover advantage for the remaining approximate 230 licenses to be awarded.”

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Michigan Regulator Suspends Cannabis Processor’s License

The Michigan Cannabis Regulatory Agency this week suspended the license of one of the state’s licensed marijuana processors, alleging that the company used illicit cannabis extract to manufacture some of its products. In an announcement from the Michigan Cannabis Regulatory Agency (CRA) released on Tuesday, the regulator announced that it has issued formal complaints against TAS Asset Holdings, LLC in Lansing and placed a summary suspension on the firm’s license to process medical marijuana and adult-use cannabis.

The CRA said that the processor’s marijuana flower coated with cannabis concentrates known as space rocks was manufactured with illicit isolate that had not been tested for purity and safety and had not been entered in Metrc, the seed-to-sale cannabis tracking system used to monitor the movement of licensed cannabis throughout the state. The agency also issued a marijuana consumer advisory bulletin warning the company’s customers that the products, which were marketed under the Fwaygo Extracts brand name and manufactured between November 10, 2022, and November 17, 2022, were not produced in compliance with state statutes and administrative regulations and may be unsafe. CRA advised consumers who have experienced adverse reactions after using the products to report their symptoms and product use to their healthcare providers.

“The conduct alleged in the formal complaints is a significant risk to the public health and safety of marijuana consumers in Michigan,” CRA executive director Brian Hanna said in a statement from the agency. “While we work through the process to seek revocation of these licenses, it is vital that all licensees throughout the state realize that the CRA will continue to do what it takes to protect the public from bad actors in the regulated market.”

The CRA noted that in September, two packages of vape cartridges handled by TAS had tested positive for the presence of bifenthrin, a chemical insecticide that is banned from use in Michigan’s regulated cannabis market. Before they were transferred to and processed by TAS Asset Holdings, both packages of cartridges had passed full safety compliance testing with no bifenthrin detected.

The agency then began an investigation to determine the cause of the safety compliance failure. A review of surveillance footage recorded at the TAS facility showed that the cannabis product used to make the vape cartridges was not the same product recorded in Metrc that had passed compliance testing. The product used to make the vape cartridges had not been properly processed as part of the regulated market or entered into Metrc.  

“During the investigation, CRA staff noted that the business had many areas that were dirty and cluttered and had leaking containers of various process stages of marijuana and waste,” the regulator maintains. “The CRA investigators observed an unapproved, unlicensed warehouse being utilized as a part of the licensed business. The CRA investigators also observed various untagged marijuana products including flower, distillate, concentrates, and THCa powder in the unapproved warehouse.”

Regulators discovered several mason jars filled with oil and three barrels and two black totes that were filled with an unknown substance in the unapproved warehouse. The unlicensed area did not have surveillance cameras, and none of the marijuana products in the room had Metrc tags as required by state regulations, the CRA alleged in its announcement.

“A TAS representative admitted that the business’s signature product, “Space Rocks,” is produced using the untagged THCa powder,” the CRA wrote. “The investigation also showed that TAS was storing and interchanging illicit marijuana products with regulated product found at the business. A safe on the premises contained three jars of distillate and five jars of marijuana concentrate that did not have Metrc tags affixed.”

Video surveillance also showed that TAS employees had brought unlicensed cannabis product into the manufacturing from a personal vehicle. The product did not have a Metrc tag and could not be traced back to a licensed business.

The formal complaint from the CRA alleges 23 regulatory violations against each of TAS Asset Holdings’ cannabis processor licenses. The company is permitted to request a hearing to contest the allegations in the complaint. State law also provides for a hearing to determine whether the summary suspensions ordered by the regulator should remain in effect.

The CRA’s action against TAS is the second time this month the regulator has suspended a cannabis processor’s license. On February 3, the CRA suspended the licenses held by Candid Labs, a processor in Corunna, Michigan operating under the name Layercake Farms. During an investigation, the CRA discovered jars of cannabis distillate that did not have required Metrc tags.

“Based on its investigation of the conduct alleged in the formal complaints, the CRA determined that the safety or health of patrons or employees is jeopardized by Candid Labs’ continued operation and that the public health, safety, or welfare requires emergency action,” the CRA said in a statement at the time.

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Vegas Weed Advocates Call for Easing of Distance Buffers for Cannabis Businesses

Cannabis advocates and business owners in Las Vegas are calling on city leaders to ease distance requirements between weed businesses, saying the move would foster the development of a cannabis district similar to Amsterdam. At a meeting of the Las Vegas City Council on Wednesday, entrepreneurs also called for a reduction in the fees for cannabis business licenses, arguing that the high costs are an unreasonable “roadblock” to starting a new enterprise.

The city council was considering a proposed ordinance to regulate cannabis consumption lounges, which are businesses that offer cannabis for patrons to purchase and consume on the premises. In September, the council cleared the way for cannabis lounges to open in Las Vegas with a 5-1 vote against a motion that would have prevented the businesses from opening in the city.

At Wednesday’s meeting, several cannabis industry advocates and business leaders addressed the council, telling members that regulations that require licensed cannabis businesses to be located at least 1,000 feet away from each other make it difficult for entrepreneurs to secure a compliant property.

“It is absolutely unreasonable to make somebody walk more than three football fields to the next bar, restaurant, shops or casinos,” Tina Ulman, president and founder of the Chamber of Cannabis, said at the city council meeting on Wednesday. “Why would we ever want them to do that for consumption venues?”

Five licensed cannabis dispensaries in Las Vegas have plans to open cannabis consumption lounges as part of their businesses. Another 10 businesses are expected to operate consumption lounges independent of a dispensary, including seven social equity applicants who were negatively impacted by marijuana prohibition prior to the legalization of cannabis in Nevada in 2016.

The proposed ordinance allows the city to waive the distance requirement between consumption lounges, although not in some parts of the city including the Symphony Park District, the Las Vegas Medical District or the casino-resort district.

Dani Baranowski, vice president of the industry group Chamber of Cannabis, said that the distance requirement forces applicants to “find expensive, out of the way, and non-profitable locations that will be hard pressed to get business.”

Business leaders told the city council that if the distance requirements are eliminated or relaxed, the downtown Arts District could become a “New Amsterdam,” serving as a destination for cannabis tourism that could draw visitors from around the world. They also noted that allowing consumption lounges and other cannabis businesses to locate closer together would encourage walking and eliminate the temptation to drive while high, benefitting public safety.

“The proposed measures have established unnecessary and harmful distance restrictions between lounges and excessively high licensing fees compared to other businesses,” said Chandler Cooks, who has been awarded a provisional social equity consumption lounge license.

Business Leaders Call For Lower Licensing Fees in Las Vegas

Other business owners agreed with Cooks and called for a reduction in license fees for cannabis consumption lounges. The proposed ordinance includes a one-time business license fee of $10,000, with social equity applicants paying a reduced fee of $2,500. Lounges will also be required to pay additional semiannual license fees based on their earnings.

“Adding these high fees will only add to the insane amount of capital they have to raise” to start their businesses, said Ulman.

Baranowski said that the high licensing fees could put up “further roadblocks” to success and discourage applicants who are having trouble raising the capital needed to get their businesses up and running. Paul Murad, president of Metroplex Group, a real estate company that owns businesses in the Arts District, said that he is looking forward to working with the city council on a number of issues relevant to cannabis businesses, including reducing the costs of business licenses.

“We’re asking for the licensing fees and ongoing license fees to be significantly reduced,” said Murad. “So they’re on par with other businesses … They need to be at the same level, not excessive just because they happen to be cannabis.”

After hearing from the business leaders, the city council postponed a vote on the proposed cannabis consumption lounge ordinance and rescheduled the agenda item for its meeting on March 1. Business leaders said they hoped to use the next two weeks to work with the city council to draft an ordinance that Murad said could set up Las Vegas as “a role model for other municipalities to follow.”

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