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Cannabis industry reacts to court ruling

Local marijuana businesses are offering their thoughts and suggestions following a ruling by U.S. District Judge Gary Sharpe last week that could impact the roll-out of the cannabis industry in Western New York.

Sharpe’s ruling upheld his previous injunction from November against New York’s Conditional Adult-Use Retail Dispensary program (CAURD).

The judge’s decision will temporarily prevent New York from approving dispensary licenses to applicants in five regions across the state. These regions include Western New York, Central New York, the Finger Lakes, Mid-Hudson and Brooklyn.

Sharpe issued his November injunction in response to a challenge by Variscite Inc. (a Michigan-based company) of the Office of Cannabis Management’s rule that gives preference to dispensary licenses to applicants previously convicted of cannabis crimes that have a “significant presence” in New York. Variscite challenged that the Office of Cannabis Management’s rule was “discriminatory,” and violated the “dormant commerce clause,” which prevent individual states from implementing legislation that bars the import or export of “legal goods” between other states. Variscite’s challenge resulted in Sharpe’s original injunction.

The state’s Office of Cannabis Management submitted a motion for Sharpe to dismiss the injunction or only implement the injunction in the Finger Lakes area where the Michigan-based company originally intended to conduct operations. The Office of Cannabis Management claimed that the injunction would “unjustly block” 54 dispensaries from being licensed and opened throughout the state.

In Sharpe’s decision to uphold the injunction, he explained that the Office of Cannabis Management did not provide sufficient additional arguments to overrule the original injunction.

“In seeking dismissal, defendants raise many of the same arguments asserted in their opposition to Variscite’s motion for a preliminary injunction regarding whether the law and regulations at issue violate the dormant Commerce Clause,” Sharpe wrote in his decision.

Sharpe’s decision could impact the city’s cannabis industry, at least temporarily.

“Chautauqua County might not see any dispensaries soon under the CAURD program but with the proposed rules and regulations out with public comment ending on February 13, this will then be opening possibilities for dispensaries along with other business opportunities in the regular licensing as it develops and applications are received,” Kerry Trammel, owner of Releaf Market, said.

According to Trammel, the lawsuit involving the Office of Cannabis Management and Variscite was specifically regarding the state’s CAURD program. As a result, Trammel said the ruling would “not imply” toward applicants seeking “regular licensing” through the state in the coming months.

Trammel said the CAURD program was created to help people in the marijuana industry that were previously “harmed” by the state. As a result of Sharpe’s injunction, Trammel believes these individuals will be negatively impacted.

“In these regions, the CAURD applicants will be the ones harmed when it seems like regular licensed dispensaries will be issued licenses before CAURD,” she said. “Meanwhile cultivators in these regions have to travel to sell the products produced from last seasons harvest.”

Trammel explained that the Releaf Market has made two trips to Albany over the past week for a “full panel lab test” on its products. In addition to the lab test, Trammel said her business met with two people who have provisional CAURD licenses to provide samples of the Releaf Market’s products.

Ashley Baron, CEO of Snowbelt Cannabis, suggested that Kenneth Gay, owner of Variscite, could wait for the state’s general licensing instead of “holding up” the legal licensing of New York dispensaries.

Baron claimed that the injunction against the CAURD program is impacting the ability for local communities to launch legal dispensaries.

“This lawsuit is taking a toll on local communities affected by the marijuana prohibition that have been putting in all their time and resources to become CAURD applicants, not only for Western New York, but for four other regions in the state,” she said.

While the lawsuit claims that the New York CAURD program’s requirements of New York residency and a New York marijuana conviction is “in conflict” with federal commerce regulations, Baron said the state’s intention was to “give New Yorkers first chance” at the cannabis market by “restoring justice” to people that were previously penalized by the state’s cannabis enforcement.

“This is great knowledge for the public to know because many people are and will be wondering why we don’t have any legal dispensaries open in the near future in Chautauqua County,” she said. “It’s unfortunate because we will continue to see pop-up shops that are not legal and those who are working hard in our region to obtain a license have to continue waiting.”

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