Two white brothers who applied for a microbusiness license in New York – but don’t expect to win one, given their race and gender – have refiled a federal discrimination lawsuit against cannabis regulators, alleging that the state law and its subsequent social equity-focused regulations violate the Equal Protection Clause of the U.S. Constitution.

The case, brought by Valencia Ag LLC, was originally filed in January in U.S. District Court in the Northern District of New York, but the libertarian-leaning national nonprofit legal firm Pacific Legal Foundation took command of the case recently, which led to a re-filling of the lawsuit on March 13.

The PLF also issued a press release this week, identifying the owners of Valencia Ag as William and Emmet Purcell of Jamesville, a suburb of Syracuse in upstate New York.

PLF has altered course a bit, changing some of the language in the lawsuit and narrowing the defendants to Office of Cannabis Management Executive Director Chris Alexander and Cannabis Control Board Chairwoman Tremaine Wright.

But the main gist of the lawsuit is the same: Preferences written into the licensing structure for racial minorities and women – including state requirements that 50% of marijuana business permits be granted to such classes of entrepreneurs – are unconstitutional.

“Defendants acted under the color of state law in developing, implementing, and administering laws, regulations, and procedures that discriminate and grant preferential treatment to cannabis license applicants based on their race and/or sex,” the suit states, adding that Alexander and Wright “violated Plaintiff’s right to equal protection of the laws.”

The suit further alleges that the brothers were harmed by OCM advice last fall that would-be cannabis retailers who secured locations for their business license applications would be “given priority” in the licensing process. On that belief, the two signed a $2,000-per-month lease for a facility.

But when the OCM release a randomized queue of applicants in early January, the brothers were too far down on it to realistically expect to win a permit, meaning their investment is likely for naught, the suit asserts.

The low ranking in the queue, and the near-impossibility of getting a license, is due to the social and economic equity plan that gave an advantage to women and minorities, the suit claims, which it asserts is also unconstitutional favoritism.

“Because of the favor and preference given by OCM officials to applicants based on race and sex, Plaintiff will almost certainly not be granted a license in the foreseeable future, if ever,” the suit asserts.

Backers and lawmakers always intended the 2021 state law by the New York Legislature, the Marihuana Regulatory and Taxation Act (MRTA), to be social equity-focused, meaning that its intent was to repair much of the harms wrought by the War on Drugs against minority communities.

But the lawsuit from Valencia Ag rejects such legal reasoning as unconstitutional and asserts that the state and its officials “do not have a compelling interest that justifies these racial classifications” in the cannabis regulations or law.

Even if the state did have a “compelling interest,” the amended lawsuit argues, “The racial classifications are woefully over-inclusive. Individuals from certain racial groups are given preference for no identifiable purpose” and “treat individuals according to racial stereotypes.”

The case makes the same arguments about gender preferences in the law and regulations.

The suit requests that a federal judge issue a permanent injunction prohibiting the OCM and CCB from awarding any business permits based on race or gender. If the Purcells are victorious, it could throw the licensing process into further disarray despite the already-chaotic rollout, which has been delayed by months by other lawsuits.

A spokesperson for the OCM and CCB declined to comment on the case Thursday, citing the pending nature of the litigation.

The PLF has taken the case pro bono, a spokesperson for the organization previously confirmed to Green Market Report. The firm has a track record of winning at the U.S. Supreme Court, with 17 victories out of 19 cases argued before the high court, according to the nonprofit’s website.

PLF NY lawsuit

 The two white brothers allege that the state’s social equity-focused regulations violate the Equal Protection Clause of the Constitution.  Read More