A state Supreme Court judge has denied a motion to dismiss a lawsuit against the state for increasing the number of medical marijuana licenses from the original five.
Justice W. Brooks DeBow, who is presiding over the case in Albany County Supreme Court, issued an order Monday denying the recently awarded medical marijuana companies’ motion to dismiss the lawsuit, New York Medical Cannabis Industry Association v. New York State Department of Health, 2848-17.1. The suit was filed by the original five medical marijuana licensees against the state.
The intervenors in the suit were issued a license by the state to grow and sell the drug in August (NYLJ, Aug. 1), despite the lawsuit previously filed by a trade group that represents the initial licensees who oppose the additional grower-distributors.
In late August, the five new medical marijuana companies—who ranked six through 10 when the state sought bidders for the medical marijuana program in June 2015—submitted a cross-motion to dismiss the initial five medical marijuana lawsuits against the state arguing that the proceedings in its entirety lacked standing and on timeliness grounds.
Lawyers for the intervenors—Citiva Medical, Fiorello Pharmaceuticals, New York Canna, PalliaTech NY and Valley Agriceuticals—claimed during oral arguments in mid-September (NYLJ, Sept. 12) that the five original medical marijuana companies could not demonstrate that they have suffered an injury after the state effectively doubled the amount of companies in the program.
“While the nature of the anticipated injury to plaintiff/petitioner’s members—i.e. economic harm from increased market competition—may be insufficient to support standing, it is an injury-in-fact because they will be injured by having their market share decreased by half,” DeBow wrote in his decision, filed with the Albany County Supreme Court Thursday.
The New York Medical Cannabis Industry Association, which is being represented in the lawsuit against the state by Jennifer Kavney Harvey, a litigation partner at Albany-based Couch White (NYLJ, Sept. 28), said they were reviewing DeBow’s decision.
Lawyers for the intervening companies—which include attorneys from Syracuse-based Bond Schoeneck & King; Loeb & Loeb; Duane Morris; Sher Tremonte in New York City and Massachusetts-based Shlansky Law Group—didn’t immediately respond to request for comment.
DeBow also dismissed a motion by a California-based company to file an amicus brief in the case. The companies who were recently awarded medical marijuana licenses filed a memorandum of law late last week in opposition to West Sacramento Management Group LLC’s motion for leave to file an amicus curiae brief in the lawsuit (NYLJ, Sept. 28) arguing that the proposed amicus curiae brief “lacked any unique legal analysis.”
In his order, DeBow writes that he’s denying West Sacramento’s motion because the “causes of action that are primarily pertinent to the proposed amicus brief will be dismissed, and thus, the arguments asserted by movant are moot.”
“Second, movant is not seeking to illuminate issues as a friend of the court, but has submitted an argumentative brief in pursuit of advancing its own interests and those of similarly situated entities,” he continued. “
Sam Breslin of Albany-based full service firm Breslin Law Group, who is representing West Sacramento in the proceedings, did not immediately respond to request for comment.
The New York Medical Cannabis Industry Association filed the lawsuit in May arguing that allowing more companies to manufacture marijuana will cannibalize an industry that has struggled since its inception in 2016. 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.