New York MMJ Companies Sue Health Department to Keep Industry Small

New York is home to one of the most restrictive medical marijuana programs in the country—a shoddy deal that has made it difficult for thousands of patients to gain easy access to the medicine they need. But this has not stopped the companies hired to manufacture and sell cannabis products throughout the state from filing a lawsuit against the agency in charge of the program in hopes of keeping the industry small and exclusively in their hands.

According to a report from the Albany Times Union, four of New York’s five medical marijuana producers have filed a lawsuit against the Department of Health in order to stop them from licensing additional cannabis companies in their territory.

The complaint, which was filed by the Medical Cannabis Industry Association, argues the Health Department’s attempt to expand the market “will completely overstep its authority delegated by the Legislature,” as outlined in the 2014 passing of the Compassionate Care Act.

New York health officials have been working for months to give the state’s medical marijuana program the wings it needs to finally get it off the ground. It all started last year when the state decided the time was right to add “chronic pain” to its list of qualified conditions. It’s a move that was predicted to increase the state’s patient registry by several thousand people.

The next logical step was to ensure these patients were able to get their hands on cannabis products by opening the program up to more businesses to serve them.

In February, the Department of Health made that move, issuing licenses to New York Canna Inc.; Fiorello Pharmaceuticals Inc.; Valley Agriceuticals LLC; Citiva Medical LLC; and PalliaTech NY LLC.

But the existing companies think it is too soon for New York to expand the program in this manner. The lawsuit claims that giving other cannabis firms the ability to operate, while patient numbers are still low, could cripple the market and put the program in its grave.

“The DOH’s premature doubling of the supply market, before patient demand has grown to a level that can sustain even the existing market, will immediately launch the collapse of the medical cannabis industry in New York,” the complaint reads.

The lawsuit goes on to say that an expansion of this magnitude would sabotage the industry’s plan to bring new, expensive medications to market for the sole purpose of treating children with epilepsy. The companies argue that they have already taken a substantial beating by being part of New York’s cannabis trade, and they simply cannot afford to take it on the chin anymore.

“The program is still in its infancy, and patient demand is currently too low to support an expansion of the supply market for medical marijuana,” the lawsuit states. “As it is, all five (of the Medical Cannabis Industry Association’s) members are sustaining tremendous operating losses, after having made millions of dollars in initial investments.”

On Friday, the courts did not issue an immediate injunction to prevent the expansion.

A spokesperson for the NY Health Department, Jill Montag, said the agency “will continue to fight any attempts to block patients from the relief they deserve.”

“The court’s decision today not to block this expansion while the lawsuit is pending certainly helps those residents,” she added.