Three companies that got state approval last month to produce medical marijuana in Orange and Ulster counties face a legal hurdle as they develop their plans: a lawsuit by five existing medical-marijuana businesses that aims to stop the expansion of their fledgling industry.
The newly approved competitors include Valley Agriceuticals, which already erected a building in the Town of Wallkill in 2015 in anticipation of a license it didn’t get that year. Another is Citiva Medical, which is said to be considering building its manufacturing site in a new Warwick business park that used to be the grounds of a state prison. Both were among five medical-marijuana companies the state Department of Health gave permission to operate on Aug. 1, doubling the number of businesses allowed into that strictly regulated industry.
A third company, PalliaTech, got approval to produce medical marijuana in Ulster County. It was unclear on Thursday if that company has chosen a site.
PharmaCann, which began growing and processing medical marijuana in Hamptonburgh last year, and the other four companies licensed in 2015 sued the Department of Health in April to block the additional licenses the state already indicated it would issue. Those companies, represented collectively as the New York Medical Cannabis Industry Association, have asked the state Supreme Court in Albany for a preliminary injunction to stop the new businesses from opening while the case is pending. The court has yet to rule on that request.
The plaintiffs argue that the 2014 state law authorizing medical marijuana clearly limited the number of operators to five. They also argue the opening of additional businesses — referred to by the state as registered organizations, or R.O.s — would cripple their struggling operations and could cause them to fail.
“Flooding the supply market when there is insufficient patient demand will undermine the…