A lawyer for the state’s original five medical marijuana manufacturers argued in Albany County Supreme Court on Tuesday that while the state can expand the medical marijuana program, it cannot add additional manufacturers.
Jennifer Kavney Harvey, who is representing the New York Medical Cannabis Industry Association, a trade group representing the top five companies awarded a license to grow and dispense medical marijuana in July 2015, argued in court that the statute that created New York’s medical marijuana program in 2014 caps the number of manufacturing entities at five but allows the health commissioner to create additional dispensaries. Harvey is a litigation partner at Albany-based Couch White.
“The commissioner shall register no more than five registered organizations that manufacture medical marijuana with no more than four dispensing sites wholly owned and operated by such registered organizations,” the 2014 law says. “The commission may register additional registered organizations.”
C. Harris Dague, an assistant attorney general representing the state in the lawsuit, argued before Judge W. Brooks DeBow that the statute gives the health commissioner “incredible discretion” depending what’s in the public’s interest.
In May, the New York Medical Cannabis Industry Association filed a lawsuit against the state in Albany County Supreme Court, New York Medical Cannabis Industry Association v. New York State Department of Health, 2848-17.1, seeking to stop the state’s Department of Health from awarding licenses to five more companies. The association claims that awarding additional licenses to grow the drug would cannibalize the industry, which has struggled to flourish in New York.
In August, the state announced five additional companies had been awarded licenses to manufacture and dispense medical marijuana (NYLJ Aug. 1), effectively doubling the size of the program. Roughly two weeks after the announcement, the Department of Health announced its plans to soon make available marijuana-infused lotions, patches and chewables in an effort to improve the program (NYLJ Aug. 11), which is off to an unexpectedly slow start.
As of March 30, the state had collected just $585,000 in tax revenue from the sale of medical marijuana in New York, far less than the $4 million in revenue from a 7 percent excise tax on medical marijuana the Cuomo administration had projected when the program began last year.
State Sen. Diane Savino, D-Staten Island, one of the architects of the state’s medical marijuana law, sponsored a bill this past legislative session that would increase the number of medical marijuana retail locations, allowing the health commissioner to register “no more than five retail-only” organizations.
While the Department of Health’s website boasts nearly 30,000 people who have been certified as eligible for medical marijuana, Harvey argued that only a fraction of those people, 4,615, have purchased the drug in July based on the amount of tax revenue received by the state.
“That [patient] number is not increasing to the extent that seems to be urged,” Harvey said. “There has been no allegation of a supply issue.”
DeBow did not immediately issue on the request by the state and the newly announced companies to dismiss the lawsuit.