Resolving Cannabis Disputes in New York
The Marijuana Regulation and Taxation Act, legalizing adult use of cannabis in New York, has provided a framework for the potential multi-billion dollar, highly regulated industry but passage of the bill is only the first step before growers, distributors and retailers can legally sell cannabis to consumers.
June 24, 2021 at 10:00 AM
8 minute read
On March 31, 2021, the Marijuana Regulation and Taxation Act (MRTA) ushered in a new era in New York, legalizing adult use of cannabis and providing a framework for what has been projected to be a multi-billion dollar industry in the state by 2027. Passage of the bill, however, is only the first step. Adult-use cannabis will be a highly regulated industry. As such, substantial steps still need to be taken before growers can cultivate cannabis crops, distributors will have products to ship and retailers can legally sell cannabis to consumers. The first steps will proceed this summer.
A five-member Cannabis Control Board (CCB), to be appointed by the Governor, the State Senate and the State Assembly, is in the process of being formed and will then promulgate and pass regulations. After that, the CCB will begin accepting, reviewing and issuing a range of licenses for, inter alia, cannabis cultivators, processors, distributors, dispensaries and consumption lounges. After that, the cannabis business will be off and running. And if the track record in other states serves as a guide, so too will cannabis litigation and arbitration.
In other states where adult use of cannabis has been legalized, there have been a range of sophisticated court battles. In Arkansas Dep't of Fin. and Admin. v. Carpenter Farms Medical Group, 2020 Ark. 213, 601 S.W.3d 111 (2020), multiple challenges were made to the process that was used in awarding and denying a marijuana cultivation license. In Bertolino v. Fracassa, 2018 WL 11291738 (Mass. Super., Sept. 5, 2018), investors sought to assert claims for violations of Massachusetts Uniform Securities Act based on alleged misrepresentations in soliciting investments in cannabis company.
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