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Although the New York cannabis market has gotten considerably better – the number of operational retailers has grown to 52 as of Jan. 19 – a new problem has arisen for operators upstream in the supply chain: how to collect on unpaid bills from retail shops.
The issue of nonpayment by licensed New York marijuana stores has been around since the market launched just over a year ago, said Brittany Carbone, both a marijuana farmer and the incoming vice president of the Cannabis Association of New York.
But it’s become more obvious and pressing as the market has developed, Carbone said, and thus far, the state Office of Cannabis Management hasn’t policed the market the way it should.
“One of the biggest issues that we’re facing is a lack of enforcement of the regulated market … most notably when retailers aren’t paying their invoices on time,” Carbone said.
Carbone said that while farmers wanted to be flexible through 2023 – particularly after a court order forced the state to freeze retail licensing from August until November, leaving just 23 shops open – the problem is going to have to be addressed soon.
“For a while, nobody wanted to even report that to the OCM, and with so few retailers, nobody wanted to be the one who stopped distribution to any retailer. Everyone was trying to be understanding,” she said. “Now, it’s gotten to the point where people don’t have a choice but to start reporting delinquent payments, and unfortunately that seems…
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New York regulators are facing yet another lawsuit aimed at stopping them from issuing any additional adult-use marijuana licenses.
The lawsuit – filed in U.S. District Court in the Northern District of New York by two companies seeking retail licenses – comes less than a month after regulators approved settlement agreements in two previous suits that contributed to the tortuous rollout of legal adult-use cannabis sales in the state.
In the new lawsuit, Variscite New York Four and Variscite New York Five argue that the state’s retail marijuana licensing program violates the U.S. Constitution’s dormant commerce clause, which generally prohibits states from passing legislation that discriminates against or excessively burdens out-of-state citizens compared to in-state citizens.
Both companies are 51% owned by a Los Angeles man “who was convicted of a cannabis crime under California law rather than New York law,” the lawsuit claims.
The lawsuit targets the state Office of Cannabis Management and its Cannabis Control Board, according to Spectrum News 1.
The suit was filed the day that the latest licensing round closed, Green Market Report noted.
According to Green Market Report, the suit claims that state residency requirements are unconstitutional and that the two plaintiffs’ applications should have received “extra priority” because they had secured properties for their businesses.
“Because Plaintiffs satisfy every requirement for the ‘extra priority’ pool except the unconstitutional New York residency preferences, Defendants should process Plaintiffs’ applications in the extra priority pool,” according to the lawsuit.
Last November, a company with a name similar to the two plaintiffs in the new lawsuit – Michigan-based Variscite NY One – filed a suit seeking an injunction against the state after unsuccessfully applying for licenses in five New York regions.
That lawsuit prevented retailers from opening across significant portions of the state, Spectrum News 1 noted.
And similar litigation has been filed against other social equity programs elsewhere in the country, including in Los Angeles.
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