New York Medical Marijuana Trade Group Sues Over Licensing Fee
ALBANY, N.Y. (NEXSTAR) — A medical marijuana trade group, the New York Medical Cannabis Industry Association (NYMCIA), has sued the New York Cannabis Control Board (CCB) and the Office of Cannabis Management (OCM) over a $20 million licensing fee imposed on weed retailers.
Background
The NYMCIA filed the lawsuit on December 4, claiming that the fee represents an unconstitutional tax that "offends" the equal protection doctrine and breaks the separation of powers and takings clauses. The fee, which requires medical marijuana companies to pay $5 million upfront, with three more $5 million installments by 2033, is seen as a burden on the industry.
Arguments Made
The lawsuit argues that the CCB overstepped its authority and unfairly penalized medical marijuana businesses, jeopardizing their survival to favor newer recreational companies. The NYMCIA claims that the language of the 2021 Marijuana Regulation and Taxation Act (MRTA) only authorizes one-time payments, meant to target underserved communities with social equity programs, research programs, and public education campaigns.
Key Points
- The NYMCIA represents nine registered organizations, established retailers in the medical marijuana sector, which often operate across state lines.
- The fee violates the separation of powers, as only the Legislature has the power to impose a tax.
- The CCB set the fee arbitrarily, without a cost assessment, and prioritized recreational sales over medical sales.
- The fee represents an unconstitutional tax that "offends" the equal protection doctrine and breaks the takings clause.
- The fee is seen as a burden on the industry, driving down the value of medical marijuana businesses, which amounts to taking property without compensation.
Consequences
The lawsuit claims that the fee has led to:
- Patients losing access to medical marijuana
- Financial woes and dispensary closures
- A shift from medical to recreational sales
- A boom in the black market
Conclusion
The outcome of this lawsuit will have a significant impact on the state’s approach to regulating the industry, particularly for medical patients. The NYMCIA is seeking the court to declare the fee unconstitutional, block its enforcement, and refund any payments already made.
Frequently Asked Questions
Q: What is the dispute about?
A: The NYMCIA is disputing the $20 million licensing fee imposed on medical marijuana retailers.
Q: What is the fee for?
A: The fee is for medical marijuana companies to operate in the state.
Q: Who is the NYMCIA?
A: The NYMCIA is a trade group representing nine registered organizations in the medical marijuana sector.
Q: What are the consequences of the fee?
A: The fee has led to patients losing access, financial woes, and dispensary closures, with a shift from medical to recreational sales.
Q: What is the impact of the lawsuit?
A: The outcome of the lawsuit will shape the state’s approach to regulating the industry, particularly for medical patients.
