Judge Rules that New York’s Discretionary Licensing Process Violates the Law

On August 18, 2023, a New York Supreme Court judge, ruled that the state’s discretionary licensing process violates the law.

A group of disabled military veterans filed a lawsuit against cannabis regulators claiming the initial round of New York licenses were improperly limited to people with prior marijuana convictions, rather than a wider group of service-disabled veterans and other social equity applicants prioritized by New York’s Marihuana Regulation and Taxation Act.

Supreme Court Judge Kevin Bryant upheld the lawsuit and stated, “There is no dispute” that state law says applications “shall be opened for all applicants at the same time.” As a result, Justice Bryant issued an injunction blocking the the state Office of Cannabis Management (OCM) from processing or issuing marijuana dispensary licenses until at least Aug. 25. 

This is the latest setback in a series of delays since New York legalized marijuana two and a half years ago. There are only 23 legal dispensaries in the state, with more than 300 farmers and manufacturers in need of a place to sell their goods. 

Further arguments on the ruling will be held Aug. 25. The OCM plans to appeal, a spokesperson said in a statement Monday.

Senate Bill aims to dismantle Minnesota’s recreational cannabis market

On Friday, a Minnesota senator introduced a bill that would drastically alter the state’s adult-use cannabis industry only a year after it launched adult-use cannabis sales.

Senate Bill 546, introduced by Sen. Keith Regier, R-Kalispell, focuses on “eliminating adult-use dispensaries” and intends to “reduce the demand for marijuana sales.”

The bill would prohibit non-medical marijuana sales, increase the state tax on medical marijuana from 4% to 20%, lower the THC cap on flower from 35% to 10%, lower the THC levels in individual edibles from 10 milligrams to 5 milligrams, and cap the THC percentage in concentrates at 10%.

According to the Montana Free Press, these significant limits on medical marijuana potency and allowable amounts for possession would not only reduce the consumer base for existing cannabis businesses, but would also drastically reduce revenue for state coffers. Since adult-use sales began in January 2022, Montana has generated $54 million in tax revenue from the industry, derived almost entirely from recreational consumers that pay a 20% tax to the state. In 2022, retailers sold $202,947,328 worth of recreational cannabis, which is roughly double the amount of medical marijuana sales.

“If SB 546 passes, it would render the entire cannabis program worthless, not only for the operators but also for consumers and patients in the state,” Zach Block, owner of Kalispell dispensary Montana Canna, told the Montana Free Press.

Minnesota’s Business, Labor and Economic Affairs Senate Committee plans to hold a hearing on Senate Bill 546 on Wednesday, March 29, 2023.

U.S. Supreme Court Rejects Cases Seeking Workers’ Comp for Medical Marijuana

The U.S. Supreme Court declined to hear two cases challenging Minnesota’s denial of workers’ compensation for medical marijuana used to treat work-related injuries.

Two Minnesota employees, Susan Musta, who suffered a neck injury while working as a dental hygienist and Daniel Bierbach, who was injured at his job working for an all-terrain vehicle company, were certified as eligible to participate in Minnesota’s medical cannabis program and began using medical cannabis to treat their pain. They requested reimbursement for the cost of that treatment from their employers pursuant to Minn. Stat. § 176.135, subd. 1 (2020), a Minnesota state law that requires employers to furnish medical treatment as may reasonably be required to treat a work-related injury.

Their respective employers opposed the requests for reimbursement, arguing that paying for someone to possess cannabis is prohibited by federal law, specifically the federal Controlled Substances Act, 21 U.S.C. §§ 801–971 (“CSA”). Musta and Bierbach argued that, because employers are not required to possess, manufacture or distribute cannabis in contravention of federal law, merely providing workers’ compensation for marijuana is not preempted by the CSA.

Their cases made their way to the Minnesota Supreme Court and presented the following question: Does the CSA preempt an order under a state workers’ compensation law requiring an employer to reimburse an injured employee for the cost of medical marijuana? In both instances, the Minnesota Supreme Court said yes, deciding that employers were not obligated to pay for medical marijuana treatment. Musta and Bierbach appealed the decision to the U.S. Supreme Court.

The U.S. Supreme Court invited the U.S. Department of Justice (“DOJ”) to file a brief before making a decision. The DOJ agreed with the Minnesota Supreme Court that the CSA preempts state law and recommended that the court not take up the pair of cases. It wrote, “the Legislative and Executive Branches of the federal government are best situated to consider any potential tailored measures to address specific instances of interaction between federal and state marijuana laws.”

The U.S. Supreme Court denied Musta and Bierbach’s writs of certiorari, indicating that fewer than four justices believed the legal challenges warranted the court’s consideration. By rejecting their cases, the U.S. Supreme Court has chosen not to weigh in on the viability of a workers’ compensation claim for medical marijuana coverage, nor has it taken the opportunity to close the gap between state and federal marijuana policy.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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