Second Circuit Strikes Down New York’s Marijuana Licensing Preference for In-State Convictions

OG Article By Anthony Martinelli in News Watch Today's LIVE Episode on X, and Rumble

and Youtube

August 13, 2025

In a ruling released today, the U.S. Court of Appeals for the Second Circuit declared that New York’s cannabis licensing system — which gives “extra priority” to applicants or their close relatives with New York marijuana convictions — violates the dormant Commerce Clause and is therefore unconstitutional.

The court found that this protectionist carve-out “cannot stand,” noting that Congress has not expressly authorized such favoritism.This decision marks a major victory for Variscite NY Four LLC and Variscite NY Five LLC, two applicants whose majority owners carry California convictions and were consequently denied the priority review afforded to New York–convicted applicants. The court sharply criticized the scheme, observing: “It is hard to seriously imagine states passing protectionist legislation in most federally criminalized interstate markets — few state legislatures would bother passing laws to favor their local hitmen.”

The judges emphasized that while cannabis may seem legal in New York, the standard rule holds: protectionist state laws are off-limits unless Congress has explicitly permitted them — which it has not in this domain.

This ruling not only rolls back a component of New York’s social-equity licensing strategy but also sets a precedent for how the Constitution applies in the still-murky patchwork of state cannabis regulation. It throws into relief the delicate interplay between state efforts to address past injustices and the constraints of constitutional commerce protections — even in an industry still federally criminalized.