On November 10, 2022, a Judge Gary L. Sharpe of the New York Federal District Court in Syracuse entered an order enjoining New York’s retail cannabis dispensary application process in five regions of the state (Brooklyn, Central New York, Finger Lakes, Mid-Hudson and Western New York) for the Conditional Adult Use Retail Dispensary (“CAURD”) licenses.
Cannabis and the dormant commerce clause
This decision follows similar decisions from other states’ federal courts that have found provisions in cannabis licensing rules that unfairly favor in-state residents over out-of-state residents violate the “dormant commerce clause” of the U.S. Constitution (“DCC”). We first analyzed DCC exposure for programs like New York’s all the way back to 2015.
In short, the Dormant Commerce Clause refers to the prohibition, implicit in the Commerce Clause (Article 1, Section 8, Clause 3 of the U.S. Constitution), against states passing legislation that discriminates against or excessively burdens interstate commerce. More specifically, the importance is the prevention of protectionist state policies that favor state citizens or businesses at the expense of non-citizens conducting business within that state.
CAURD and the dormant commerce clause
As we previously discussed (here), all applicants for the CAURD license were required to demonstrate a significant
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