New York marijuana regulators settle lawsuit, clearing path for dispensary licenses in Finger Lakes region

New York marijuana regulators voted Tuesday to settle a federal lawsuit that has blocked them from granting dispensary licenses in the Finger Lakes region.

The settlement reviewed at a meeting of the Cannabis Control Board would remove a legal impediment that has slowed the growth of New York's fledgling marijuana market. The state was sued last year by a company owned by a Michigan resident, who said New York's retail license selection process unconstitutionally favors New Yorkers over out-of-state residents.

A federal judge in November issued a temporary injunction against the licenses being handed out in five areas around the state, including Brooklyn. But the U.S. Second Circuit Court of Appeals in March narrowed the injunction to the Finger Lakes area of upstate New York.

The injunction affected the rollout of dispensaries around New York. Critics also have blamed the state for what they call an overly cumbersome process designed to ensure the first round of licenses go to people who had pot convictions in their pasts or their relatives.

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Office of Cannabis Management general counsel Linda Baldwin told the board Tuesday that the plaintiff, Variscite NY One, has agreed to settle. She said the agreement would allow licenses to be issued in the Finger Lakes and would provide a license for the plaintiff in the future.

The board approved a resolution to move ahead with a settlement, which Baldwin expected to be filed in court later this week.

State regulators said they would provide no additional details of the settlement until it is finalized.

Calls seeking comment were made to Variscite's attorneys.