Matter of Griffon Green, LLC v. New York State Cannabis Control Bd.

part of adult-use cannabis license applications (see 9 NYCRR 118.1 [a] [104] [i] [a]; 120.2 [a]). In providing required information as part of an application, the regulations further provide that, in the event an applicant fails to provide "all material, documentation, and information required . . . , the applicant shall receive a deficiency notice" from OCM, and the applicant shall then have 30 days to cure the deficiency (9 NYCRR 120.20 [a]; see 9 NYCRR 120.20 [b]).

"Applications that are still deficient after this opportunity to cure will not be considered" (9 NYCRR 120.20 [c]). The regulations separately provide that, "[u]pon failure by an applicant to respond to the [OCM's] requests for information or documentation . . . within the time required by the [OCM], the application may be deemed void" (9 NYCRR 120.14 [a] [emphasis added]), and that "[o]nly completed applications may be processed" (9 NYCRR 120.6 [a]). Notably, regulations similarly provide that the CCB in turn "may deny an application for a license" where "the applicant fails to submit information or documentation requested by the [OCM] during the application and evaluation process, including any supplemental documentation, subject to the applicable cure period pursuant to [9 NYCRR 120.20]" (9 NYCRR

120.12 [a] [4] [emphasis added]). Lippman submitted petitioner's application in November 2023, wherein she identified only two true parties of interest â​​ herself and Shah â​​ with her having 51% ownership of the company. In submitting the application, Lippman completed and signed an electronic attestation, verifying and affirming, under penalty of perjury, that all information included therein was "true and accurate." The following July, OCM sent petitioner written, electronic notice that the application had been received, but that additional documentation was required. Specifically, each true party of interest was required to submit an unspecified electronic disclosure available on the virtual application portal. The notice advised that petitioner had 30 days to cure [*3]this deficiency.

Shah timely responded to OCM's request but Lippman's response was delayed 80 days beyond the expiration of the 30- day period. In explanation, Lippman averred that she had suffered a "personal hardship" involving her child during the relevant time period, and that the delay in responding to OCM's request was inadvertent. Notwithstanding her delayed response, Lippman maintained that the request for information from OCM "was a form letter with several 'check the box' symbols," all requesting confirmation that the information in petitioner's application was "true and correct." Shah likewise asserted in an affidavit that OCM's request for information was merely a " 'check the box' " form to confirm the accuracy of the information contained in the application and that no new information was requested. Although the form itself is not in the record for our review, respondents do not dispute the alleged contents of the requested disclosure form. Accordingly, respondents have shown no prejudice from Lippman's 2½-month delay in responding to OCM's request, inasmuch as no new information was requested and Lippman had already attested to the accuracy of the information in the application upon its submission.

Under these peculiar circumstances, and in view of the dramatic prejudice to petitioner, the lack of prejudice to respondents and the merely redundant nature of the disclosure requested from Lippman, we conclude that OCM's voiding of petitioner's application without considering Lippman's explanation for the delay was arbitrary, capricious, irrational and an abuse of discretion (see Matter of Winkler v New York State Educ. Dept., 245 AD3d at 1046-1047; Matter of Hudson Health Extracts, LLC v Zucker, 206 AD3d at 1517, 1519; see generally Matter of Richmond Children's Ctr., Inc. v Delaney, 233 AD3d 1328, 1331 [3d Dept 2024]). To hold the contrary would serve only to needlessly exalt form over substance. We are unpersuaded by respondents' contention that the applicable regulations required that the application be deemed void. The regulatory scheme clearly provides that, although applications that are "still deficient"

after an opportunity to cure same "will not be considered" (9 NYCRR 120.20 [c]; see also 9 NYCRR 120.6 [a]), the mere failure to timely respond to a request for information or documentation does not necessitate such a result, providing only that an application "may be deemed void" under such circumstances (9 NYCRR 120.14 [a]; see 9 NYCRR 120.12 [a] [4]; see generally Matter of Mestecky v City of New York, 30 NY3d at 243). We accordingly reverse the determination, reinstate petitioner's application and remit to OCM for further proceedings.

The parties' remaining arguments have been considered and found to be unavailing. Garry, P.J., Aarons, Pritzker and McShan, JJ., concur.