Lawsuit seeks court order compelling NY to stop illicit marijuana sales

OG article by Brendan J. Lyons

November 20, 2025

The New York Medical Cannabis Industry Association filed a lawsuit in state Supreme Court against the Office of Cannabis Management and the Cannabis Control Board, seeking a court order to compel regulators to prevent the influx of illicit cannabis products into New York. The suit alleges that state regulators have failed to fulfill statutory mandates, allowing out-of-state illicit cannabis to infiltrate both unlicensed markets and licensed operations, undermining the regulated adult-use market. This proliferation has placed consumers and medical patients at risk, threatened business viability, and deprived communities of tax revenue. The lawsuit highlights the botched rollout of New York's retail cannabis industry, marked by regulatory missteps, lack of transparency, and delays in implementing a seed-to-sale tracking system, which would curb illicit product diversion. It notes that fewer than 30% of cannabis businesses are profitable, with many struggling amid declining medical patient numbers and illicit competition. The association demands the state promulgate rules to prevent cross-state cannabis movement, rescind licenses of violators, enforce inventory tracking, and integrate electronic systems by set deadlines. The suit also calls for the attorney general to pursue legal actions against offenders. This legal action follows a prior lawsuit challenging a $20 million fee for medical operators entering the retail market, amid broader criticisms of regulatory failures and hostility toward medical cannabis stakeholders.