NY Cannabis Chaos: Dispensary Sues After License Revoked – What Are Your Rights?

New York’s cannabis industry, projected to reach $42.8 billion in recreational sales by 2028, is facing turbulence. Imagine investing your life savings into a cannabis dispensary, only to have your license revoked. This scenario is becoming increasingly real for some entrepreneurs in the Empire State, leading to legal battles and uncertainty. If you’re a dispensary owner facing license revocation, understanding your rights is crucial.

The Budding NY Cannabis Market: A Rocky Start

New York legalized medical marijuana in 2014, but the adult-use cannabis market didn’t take off until the Marijuana Regulation and Taxation Act (MRTA) was signed into law in March 2021. The Office of Cannabis Management (OCM) was established to regulate the industry, issue licenses, and develop regulations. The Cannabis Control Board is charged with the creation and implementation of a social and economic equity plan to promote diversity in NY cannabis.

However, the rollout has been plagued with lawsuits, delays, and a flourishing illicit market. Governor Kathy Hochul even called the situation a “disaster.” These challenges highlight the complexities of navigating the legal landscape and the importance of understanding your rights as a dispensary owner.

Why Would a NY Cannabis Dispensary License Be Revoked?

The OCM has the authority to revoke, cancel, or suspend licenses for various reasons. According to New York Cannabis Law § 133, a license can be revoked for cause, including:

Violations of the Cannabis Law or regulations: This could include anything from selling to underage customers to failing to comply with security requirements.
Transferring or assigning a license without approval: Licenses are not freely transferable and require OCM approval.
Refusing a regulatory inspection: The OCM has the right to inspect licensed premises to ensure compliance.
Making false statements on the application: Honesty and accuracy are paramount when applying for a license.
Unlicensed or improperly licensing growing, processing, or retailing of cannabis-related products: can lead to felony charges and serious prison time.

Furthermore, New York Cannabis Law § 137 outlines specific individuals and entities prohibited from trafficking cannabis, which could lead to license revocation. This includes individuals with certain criminal convictions or those employed by law enforcement.

“Public Convenience Waivers” Spark Controversy

Adding to the chaos, the Cannabis Control Board (CCB) has faced lawsuits over the granting of “Public Convenience Waivers.” These waivers allow dispensaries to operate closer than the legally mandated 1,000 feet from each other, potentially harming smaller operators who rely on that buffer zone.

Several Conditional Adult-Use Retail Dispensary (CAURD) licensees have filed a lawsuit against the CCB and OCM, alleging that these waivers were granted without proper notice, analysis, or public discussion, undermining the state’s commitment to an equitable cannabis industry.

What Are Your Rights If Your Cannabis License Is Revoked in NY?

If you receive notice that your cannabis license is being revoked, you have the right to:

Receive Due Process: The OCM must provide you with notice of the proposed revocation and an opportunity to be heard. This includes the right to present evidence and arguments in your defense (NY Cannabis § 133).
Legal Representation: You have the right to hire an attorney to represent you in the revocation proceedings. A cannabis law attorney can help you understand the charges against you, gather evidence, and present a strong defense.
Appeal the Decision: If the OCM revokes your license, you have the right to appeal the decision to the New York Supreme Court (NY Cannabis Law § 135).

Steps to Take If Facing License Revocation

Consult with a Cannabis Attorney: The first and most crucial step is to seek legal advice from an experienced cannabis law attorney in New York. They can assess your situation, explain your rights, and guide you through the legal process.
Understand the Reasons for Revocation: Carefully review the notice of revocation to understand the specific allegations against you. This will help you prepare your defense.
Gather Evidence: Collect any documents, records, or other evidence that supports your case. This could include compliance records, employee training materials, or expert testimony.
Prepare Your Defense: Work with your attorney to develop a comprehensive defense strategy. This may involve challenging the OCM’s evidence, presenting your own evidence, and arguing that the revocation is unwarranted.
Attend the Hearing: Be prepared to attend the revocation hearing and present your case to the OCM. Your attorney will represent you and ensure that your rights are protected.
File an Appeal (If Necessary): If the OCM upholds the revocation, discuss with your attorney whether to file an appeal to the New York Supreme Court.

The Importance of Compliance

The best way to protect your cannabis license is to ensure full compliance with all applicable laws and regulations. This includes:

Staying up-to-date on the latest regulations: The cannabis industry is constantly evolving, so it’s essential to stay informed about any changes to the rules.
Implementing robust compliance procedures: Develop and implement comprehensive procedures to ensure that your dispensary operates in compliance with all regulations.
Training your employees: Provide thorough training to your employees on all aspects of cannabis law and compliance.
Maintaining accurate records: Keep accurate records of all transactions, inventory, and other relevant information.
Seeking legal advice when needed: Don’t hesitate to seek legal advice from a cannabis attorney if you have any questions or concerns about compliance.

Navigating the NY Cannabis Legal Maze

The New York cannabis market holds immense potential, but it also presents significant legal challenges. Dispensary owners must be vigilant in protecting their licenses and understanding their rights. If you’re facing a license revocation, don’t hesitate to seek legal help.

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. If you are facing a cannabis license revocation, you should consult with an experienced attorney to discuss your specific situation.

Are you a cannabis dispensary owner in New York facing license issues? Contact us today for a consultation to discuss your rights and options.