New York Supreme Court Justice Kevin Bryant blocked the state from processing or issuing marijuana dispensary licenses with an injunction that faulted regulators for making a program that’s at odds with the state regulation that legalized the drug.

The order represents a extreme setback for the state’s authorized marijuana business, which has been outlined by a sluggish licensing rollout, a glut of extra marijuana crops and authorized challenges which have allowed a bootleg market to increase.

The veterans’ lawsuit argues that state marijuana regulators improperly restricted the preliminary spherical of licenses to folks with prior marijuana convictions, quite than a wider group of so-called social fairness candidates included within the authentic regulation. The decide final week quickly blocked the state’s program as authorized arguments within the case performed out, with Friday’s order extending the shut down.

In an announcement, a consultant for the veterans mentioned state regulators’ failure to observe the regulation have stored licenses out of the palms of veterans and different minority teams who have been purported to be prioritized.

“From the beginning, our fight has always been for equal access to this new and growing industry,” the assertion mentioned, including “We look forward to working with the State and the Court to open the program to all eligible applicants.”

Lawyers for the state have warned the decide that any halting of the licensing program would financially hurt those that have already begun spending cash to ascertain companies below provisional licenses. The state Office of Cannabis Management didn’t instantly have a touch upon the order Friday.

Bryant, in his order, wrote that potential monetary woes are the fault of state regulators who have been undeniably conscious of authorized issues with the licensing guidelines.

Still, the decide did grant an exemption to his order for licensees who met all of the state’s necessities earlier than Aug. 7 and is permitting candidates who’re in search of an exemption to current their case earlier than the court docket on a case-by-case foundation. He has additionally ordered for state regulators to convene and start finalizing marijuana licensing guidelines.

The order follows a vote in May wherein state regulators finally settled a federal lawsuit that blocked them from issuing licenses within the Finger Lakes area after a Michigan firm alleged that New York’s licensing system unconstitutionally favors New Yorkers over out-of-state residents.

The authorized challenges and sluggish rollout of licenses have led to complaints from farmers who develop marijuana that there aren’t sufficient authorized sellers to deal with their crops. Regulators final month permitted the sale of marijuana at festivals in an try to handle these complaints.

At the identical time, authorities have been working to close down unlawful marijuana outlets which have cropped up all around the state, significantly in New York City, as unlicensed sellers fill the authorized vacuum.