Opinion: Courts are gutting cannabis equity in New York

Earlier this month, the Second Circuit Court of Appeals struck down a key safeguard in New York’s cannabis equity program. In Variscite NY Four v. New York State Cannabis Control Board, the court ruled that giving “Extra Priority” in licensing to New Yorkers with marijuana convictions unlawfully discriminated against out-of-state applicants under a constitutional doctrine known as the “dormant commerce clause.” 

That doctrine was designed to regulate the exchange of lawful goods, but cannabis has no lawful interstate market. Congress still classifies it as contraband, and interstate commerce in it remains a federal crime. Extending the protection of this doctrine to cannabis is a distortion of the law, one that exposes a deeper truth about American jurisprudence: “neutrality” is rarely applied neutrally.  

This is not an isolated incident. Courts have long used the language of neutrality to entrench inequality, particularly when Black progress is at stake. In Rodriguez v. San Antonio (1973), the Supreme Court upheld school funding by local property taxes, cementing racial and economic disparities under the guise of local control. The rules were formally neutral. The results were not. 

When New York legalized cannabis in 2021, it tried to break that cycle. Lawmakers recognized that prohibition had been enforced with precision against certain communities. Arrests, court fees and incarceration functioned as a hidden tax on Black and Latino neighborhoods, stripping millions in wages and jobs. 

New York’s Cannabis Law embedded repair in the market’s foundation. In less than three years, hundreds of dispensaries and small farms, the vast majority equity-owned, came to anchor a competitive, community-rooted supply chain. These outcomes flow from deliberate safeguards: limits on ownership, bans on vertical integration and licensing rules that kept costs low and access broad. 

The Variscite ruling now threatens to unravel that progress. The plaintiffs weren’t New Yorkers, but Californians fighting to weaken New York’s equity rules.  

Critics frame equity licensing as preferential treatment. In truth, prohibition was the preference. It enforced the exclusions that built today’s disparities.  

For years, cannabis convictions barred entry to New York’s medical and hemp markets. A conviction was acceptable when it excluded people yet is now deemed unconstitutional when it includes them. The contradiction could not be sharper. Prohibition is real enough to jail a person, but imaginary when it obstructs commerce.

The courts were silent when nearly 90% of marijuana arrests fell on Black and Latino New Yorkers in the years before legalization. Yet now they intervene aggressively to protect the economic interests of those who were never targeted. That imbalance shows whose rights are prioritized when doctrine claims to be neutral. 

The War on Drugs was neither colorblind nor class-neutral. It stripped millions of wealth, stability and trust in the law. Repairing that damage is not charity. It is the minimum required to restore legitimacy to legalization.

The court’s ruling was wrong, but until it’s overturned, the state Legislature is the only line of defense. 

Lawmakers should broaden conviction eligibility, codify definitions of impacted communities, close straw ownership loopholes and expand access to fair financing. These steps will not undo the court’s harm, but they can strengthen the framework against further erosion. Without legislative action, the courts will continue to chip away at equity programs one by one. 

The stakes extend well beyond cannabis. What courts call “protectionist” in cannabis today could be used tomorrow to dismantle safeguards in housing or energy. Residency carve-outs, after all, exist in other contexts, such as in-state tuition rates or local jobs programs. But when New York used a similar approach to repair the damage of prohibition, the courts moved to undermine it.

If courts can try to dismantle equity protections here, they can try to dismantle them anywhere policymakers try to direct opportunity toward those historically excluded. The question is whether repair will finally take root, or whether “neutrality” will chain New York’s future to the same injustices of the past.