New York state is asking an appeals court to uphold its use of conditional adult-use retail dispensary (CUARD) licenses after the program’s defeat in a lower court helped ground the awarding of marijuana dispensary licenses statewide.

The appeal was filed earlier this week in the Third Department Appellate Division in Albany. The state Cannabis Control Board is appealing an Aug. 18 ruling by state Supreme Court Justice Kevin Bryant of Albany granting a preliminary injunction that prevents the state from awarding CUARD licenses. Bryant reasoned the CUARD licenses aren’t included in the original Marijuana Regulation and Taxation Act passed by the state Legislature, and the creation of the CUARD licenses is harming four service-disabled veterans who fear they may not be able to open marijuana dispensaries if CUARD licenses are awarded before the veterans are allowed to submit applications.

The state is specifically asking the appellate court to consider whether Bryant was wrong in finding a strong likelihood that the veterans’ claims will succeed during trial in the following areas: the CUARD licensing program violates the MRTA, if the CUARD licensing program violates the separation of powers doctine, that the veterans established irreparable harm, and that the balance of equities favored the veterans on their application for a preliminary injunction.

Following the Aug. 18 ruling, Bryant had issued an order allowing a limited number of CUARD licensees whose applications were complete and who had met the state’s regulations to open to finish the licensing process, only to find the number of applicants who met the court’s guidelines was smaller than the state had said it was. Bryant’s most recent order stipulates the court will decide on a case-by-case basis which CUARD licenses will be finalized and approved while the rest of the litigation plays out.

It’s not clear as of Thursday how the state’s approval this week of cultivator, processor, distributor, microbusiness and retail dispensary licenses affects the ongoing court case over the CUARD licenses, though the state Office of Cannabis Management said in a news release this week that the Marijuana Regulation and Taxation Act established licensing priority for social and economic equity applicants, though that classification includes service-disabled veterans. The future of the veterans’ lawsuit likely hinges on whether CUARD licenses are still to be processed before the rest of the licensing categories. If all the licenses are held up during an appeal and court fight, then it could affect how quickly Chautauqua County businesses can apply for and receive licenses to open their dispensaries.

The state Cannabis Control Board voted this week to finalize the Office of Cannabis Management’s proposed regulations for the adult-use cannabis market. Approval means individuals and small businesses across the state will now be able to apply for cultivator, processor, distributor, microbusiness and retail dispensary licenses beginning on October 4. In addition to the opening of the general license application, currently-operational adult-use conditional cultivators and conditional processors will also be able to apply for full, non-conditional licenses.

“Today marks the most significant expansion of New York’s legal cannabis market since legalization, and we’ve taken a massive step towards reaching our goal of having New Yorkers being able access safer, regulated cannabis across the state. We are immensely proud to be building the fairest, most competitive cannabis industry in the nation — one that puts those most harmed by prohibition first and offers a true opportunity for all New Yorkers — not just large corporations — to compete and thrive,” said Chris Alexander, Executive Director of the Office of Cannabis Management. “The regulations finalized today are the result of robust engagement with stakeholders across the State who submitted thousands of comments. This final package truly represents the values of equity and competition that we believe are central to this market. I want to especially thank Governor Hochul for her leadership, the Board for their collaboration, the Legislature for their vision, and our advocacy partners for their commitment to this mission.”

Bryant had said during a recent court hearing that the state accepting all types of dispensary licenses could bring the legal battle over CUARD licenses to an end. At the time of the Aug. 25 hearing, there were 463 pending CUARD license applications. It’s not known how many general use license applications will be submitted — but Bryant signaled impatience at the lengthy delay for the general use licenses.

“At any point in time the Office of Cannabis Management wants to open it all up to everyone, they are more than capable of doing that. I will embrace it,” Bryant said.