Licensing for legal recreational marijuana shops in parts of New York State is on hold following a ruling by a  federal judge. 

U.S. District Court Judge Gary Sharpe Thursday issued a preliminary injunction in Federal Court in Albany, temporarily blocking New York from issuing recreational marijuana dispensary licenses in Brooklyn, Central New York, Western New York, the mid-Hudson Valley and the Finger Lakes while a legal challenge to the state’s selection process is being considered. 

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New York had planned to grant licenses for applicants with prior marijuana-related  offenses or their relatives by the end of next month. 

The prioritization of the licensing was put in place to try to make up for the disproportionate number of minorities that were targeted by years of the state’s strict drug laws and bail requirements. 

Variscite NY One is claiming the state's selection process favors New York residents over out-of-state residents in violation of constitutional interstate commerce protections. 

According to a report by the Associated Press, the judge's order temporarily bars the state from issuing retail licenses for the five regions of the state Variscite selected in its business application. It does not cover nine other regions of the state, including the rest of New York City. The ruling affects up to 63 of the 150 possible business licenses. 

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Officials at the Office of Cannabis Management said Friday its board will still consider license applications in November for up to 150 businesses and individuals, along with applications for up to 25 nonprofit licenses. 

Applicants in the initial round had to demonstrate “a significant presence in New York state.” While Variscite's majority stakeholder has a cannabis conviction, it was under Michigan law. And though the corporation is organized under New York law, its business principal does not meet the significant presence requirement, according to court papers. 

In ruling for the company, Sharpe wrote that the state's license application requirements “will have a discriminatory effect on out-of-state residents.” 

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