New York must end its unlawful discrimination in cannabis business licensing

June 24, 2024 | By DAVID HOFFA

New York State has fewer legal cannabis dispensaries than Maryland despite having three times the population. If New Yorkers want the vibrant, booming cannabis market other states are enjoying, the state needs to fix its messy licensing process for cannabis businesses.

To understand what’s broken, look at the case of William and Emmett Purcell of Jamesville, New York.

The Purcell brothers are the founders of Valencia Ag LLC, a cannabis microbusiness start-up. Before they applied for a license to sell cannabis, the brothers signed a lease agreement for a retail space, as recommended by New York’s Office of Cannabis Management (OCM). The Purcells’ business was operationally ready-to-go when they submitted their application.

That was six months ago. The brothers’ application is stuck in a long queue. Why? Because the Purcells have a particular disadvantage in this process – they’re white males. That means their business doesn’t qualify for priority licensure.

New York legalized the production and sale of recreational marijuana products in 2021. In establishing licensing requirements for cannabis entrepreneurs, state law mandates “priority licensing” for individuals based on race and sex preferences, among other characteristics, such as residence in a “disproportionately impacted community.”

About 1,800 applications ahead of the Purcell brothers in the queue for review are receiving priority consideration: Forty-six percent of these priority applicants were based on race, while 34 percent were based on sex.

With no foreseeable end in sight, the Purcells are uncertain if their business will ever receive a license because of their skin color and sex. Because the Purcell brothers followed the OCM’s recommendation and obtained a space before applying for a license, they’re on the hook for over $2,000 a month in rent while their application sits in limbo.

Recognizing that such race and sex discrimination is fundamentally unjust and unconstitutional, the Purcell brothers are taking a stand. They’re fighting back in federal court to vindicate their right to equal protection under the law. Pacific Legal Foundation is representing the brothers free of charge.

Governments using licensing requirements as a tool for discrimination is nothing new. As far back as 1886, in the case of Yick Wo v. Hopkins, the Supreme Court struck down a San Francisco city law that excluded Chinese immigrants from obtaining laundry licenses. In a unanimous decision, the Supreme Court found that the law violated the Equal Protection Clause of the Fourteenth Amendment.

New York’s cannabis licensing is even worse, because unlike Yick Wo, where the government wrote the law to appear impartial, the New York cannabis office openly boasts about its discriminatory motives.

Supporters of New York’s priority consideration for equity applicants might argue that racially disparate harms caused by the drug war justify discrimination in cannabis licensing. But prioritizing people who’ve been personally harmed by the drug war would be one thing; a blanket preference for all female and minority applicants is another.

Make no mistake, the drug war has been – and remains – a national disaster that has undeniably and disproportionately harmed minority individuals. But race- and sex-based preferences in cannabis business licensing won’t remedy problems like over-enforcement of drug laws or disproportionate sentencing. On the contrary, the complicated process has led to a proliferation of illegal cannabis businesses.

It also creates new problems by introducing inequalities and barriers for people like the Purcell brothers, who are doing their best to serve customers legally in the Empire State.

This op-ed was originally published in Center Square on May 15, 2024