The beleaguered rollout of New York's legalized marijuana trade is facing another potential setback after the state's Medical Cannabis Industry Association filed a lawsuit Wednesday challenging the constitutionality of what they allege is a punitive $20 million fee that's required for medical cannabis operators to enter the retail marketplace.
The lawsuit contends that regulation that requires registered medical marijuana companies to make four payments of $5 million as a condition of entering the retail market is so "onerous" that it essentially constitutes a "regulatory taking" of their business — and at a time when the number of individuals with valid marijuana prescriptions in New York has been plummeting. The fallout, they said, has also deprived the state of tax revenue, kept medical operators out of the retail cannabis market, and inhibited medical marijuana patients' access to products.
The lawsuit, filed in the state Supreme Court in Albany, asserts that New York's cannabis regulators conceived the fee as a "de facto tax… to effectively exclude the (medical registered organizations) from the adult-use retail market altogether."
The litigation was filed more than two years after the $20 million fee was first proposed and subsequently became the subject of continued negotiations between the medical industry, the governor's office, lawmakers, and cannabis regulators. But after those talks recently broke down, the medical industry stakeholders pursued their lawsuit.
Read more at Times Union