More suits filed against cannabis regulators
ALBANY — A Syracuse-area man who opened Onondaga County’s second licensed marijuana shop in December filed a lawsuit against the state Office of Cannabis Management this week alleging he suffered unnecessary financial losses when regulators forced him last year to abandon the site of the initial storefront he had hoped to use.
T.J. Lewis, who ended up opening his marijuana shop — T.J.’S Cannabis Company — in the town of Clay, just north of Syracuse, contends a marijuana shop that is scheduled to open next week in nearby Liverpool, in a location where he had tried to open a shop, will undercut his business.
His lawsuit alleges regulators told him the Liverpool site, where he had operated a hydroponics’ business, was too close to a “turn-key” cannabis storefront that had been secured by the Dormitory Authority of the State of New York, which is facilitating the leasing of licensed marijuana shops to individuals with past marijuana convictions.
That effort by the dormitory authority has been beset with setbacks and delays as well as what cannabis license hopefuls had said was a lack of communication. In July, after months of delay, a Chicago firm pledged to invest up to $150 million in New York’s Cannabis Social Equity Investment Fund, which is intended to give cannabis licensees with past marijuana convictions a turn-key retail shop. The participants in that program are required to pay back the cost of their shop over time.
But Lewis, like many other liwere censees with past marijuana convictions, had declined to take part in the state’s leasing program and noted that he had his own funds and resources to open a shop.
His lawsuit contends the location reserved by the dormitory authority, which is less than 1,000 feet from the Liverpool storefront he hoped to open, never became the location of a marijuana shop. When he abandoned that site in Liverpool at the direction of regulators, he needed to invest $500,000 and six months of work to move his storefront to the town of Clay, in an area with far less traffic than the Liverpool site, which is less than five miles away.
Raven’s Joint, another cannabis retail store, is scheduled to open next week in the Liverpool location.
Lewis’ petition, filed in state Supreme Court in Onondaga County, includes an email he received from the state Office of Cannabis Management last year informing him that he could not open the shop in Liverpool.
“Our hands are fully tied,” the email stated, in part. “This will happen for you eventually. I fully appreciate the frustration. You aren’t alone. It’s been very difficult to tell licensees their dream locations can’t work for a number of reasons. I’ve done it already in person once today. It sucks. You will have to let this one go but just don’t lose sight of the fact that you own that license and you will eventually find a viable location.”
Lewis’ lawsuit seeks an order preventing Raven’s Joint from opening in the Liverpool location next week. He also is seeking a declaration allowing him to reapply for a license to open a store at that location, which his petition states has three times more vehicle traffic than the Clay location.
Crackdown on hemp products
The case filed in Onondaga County is at least the second lawsuit filed against New York cannabis regulators in the past week.
On March 1, a group of business operators in the hemp industry filed a lawsuit in U.S. District Court in Manhattan accusing state marijuana regulators of crippling their businesses by enacting regulations last year that make their products illegal due to the amount of THC concentration in them that are now considered unlawful.
“It seems as though the state’s effort to crack down on the thousands of unlicensed cannabis operators is bleeding over to licensed and lawfully operating hemp operators,” said Joshua S. Bauchner, a New York City attorney who filed the lawsuit on behalf of several hemp retailers, distributors and manufacturers.
The federal lawsuit alleges that emergency regulations passed by the state in November unlawfully deemed the hemp products — which had been legally sold — as having the “same intoxicating effect as cannabis products.” The emergency regulations stipulated that hemp products could have “no more than 10 milligrams total THC per package, with no more than 1 milligram total THC per serving.”
The regulations initially went into effect in July, but deemed unlawful by a state court ruling in November in Albany in which a judge said the state had not proven there would be harmful effects from the hemp products. The regulations were then quickly retooled by New York regulators in response to that ruling, and have led to hemp retailers needing to pull products from shelves at the same time their storefronts have been subjected to “warrantless searches and seizures,” according to the federal lawsuit.
The retooled emergency regulations stipulated that except for flower or topical hemp products, they must contain a ratio of CBD to THC that is 15:1 or higher. THC, or tetrahydrocannabinol, which is the psychoactive ingredient found in marijuana that produces a high. CBD, or cannabidiol, is an active ingredient in cannabis that is derived from the hemp plant but does not cause a high and is not considered addictive.
“This 15-to-one ratio is made up. It’s just a contrived ratio,” Bauchner said. “It’s not based in science, fact or reason. And, in fact, ironically enough, by increasing the CBD concentration to 15 and reducing the THC to one, you actually can increase the psychoactive effect of the THC through the increase of CBD. It all depends on how you’re ingesting it.”
The federal lawsuit alleges the hemp regulations were not properly implemented and that the raids and seizures of hemp products without a warrant have been unconstitutional. The complaint seeks an injunction halting the enforcement efforts and millions of dollars in monetary damages.