A group of cannabis farmers in New York are livid about the state’s handling of the adult-use market rollout and say it has left them destitute. They filed a lawsuit on Monday.
In it, the 120 craft cultivators allege that the Office of Cannabis Management’s negligence has resulted in a drastic oversupply in the market. They claim that the state regulator has irresponsibly issued piles of cultivation and retail licenses and squashed their chances at fair competition.
“It’s breaking these poor people who have invested their lives, life savings, their families’ life savings,” the coalition’s legal representative, Dean DiPilato, said, “and they are dying.” He feels that the regulators are just handing out licenses “willy-nilly” without consideration for the little guys.
Some of these unfortunate cannabis growers have lost everything trying to stay afloat since the state opened up the market at the end of 2022. The oversupply fiasco has caused the price of cannabis goods to drop too, thereby making cultivations unfeasible economically.
The lawsuit says that the New York cannabis office has enabled certain licensed cultivators to “unlawfully consolidate in order to increase their canopy allowances into a single, larger growing operation, thereby avoiding the strict limits imposed on each individual license.”
Small NY Cannabis Farmers Sue Regulators – Small-scale cannabis farmers in New York file a lawsuit against state regulators, seeking fairer conditions in an industry dominated by large players. pic.twitter.com/PuUQzKpX4X
— Highat9news (@highat9news) November 14, 2024
Read more: Raekwon the Chef starts serving up cannabis at NJ dispensary ‘Hashstoria’
Read more: TerrAscend to enter Ohio’s booming marijuana industry with dispensary buy
‘License stacking’ a key criticism
This essentially refers to when companies or organizations in New York with mutual interests have found a loophole to dominate the market by holding multiple licenses. This violates the state’s two-tier system that is supposed to prevent operators from vertical integration and an unfair foothold in the supply chain.
Only select medical suppliers are supposed to be permitted to be vertically integrated in the Empire State.
“What the OCM has done is created two classes of operators,” Pilato said in an interview with WGRZ, “an unlawful one that is taking advantage of the market and the people who are trying to follow the law that are getting left behind.”
Pilato claims the cannabis regulator is aware of the prevalence of these issues and isn’t taking action to change them.
About 66 per cent of small-batch growers in the state currently have a profit margin below 1 per cent. Some of them have even become suicidal and developed health issues, the suit alleges.
“Market monitoring and stabilization, and a regulatory framework designed to protect licensed operators from unfair competition and market dysfunction,” is the goal, the lawsuit stated.
Cannabis farmers in the state were forced to throw away thousands of pounds of product earlier this year due to the vast oversupply in the sector. About 250,000 pounds of chronic merchandise remained unsold in February, valued at over US$35 million.
rowan@mugglehead.com
