News Summary
Over 150 cannabis retail operators and applicants in New York may need to relocate due to revised proximity rules enforced by the Office of Cannabis Management. The new regulations, which measure distances differently from schools, have jeopardized the licenses of 108 operators and 44 applicants, impacting the cannabis market valued at $1.5 billion. These changes have drawn scrutiny amid concerns about market saturation and the sustainability of cannabis retail in New York City, prompting calls for legislative revisions and state assistance for those affected.
New York City – Over 150 cannabis retail operators and applicants in New York are facing potential relocation due to a misapplication of proximity rules by the Office of Cannabis Management (OCM). This situation affects 108 licensed operators and 44 applicants still waiting for their licenses, including 38 licensees based in New York City.
The compliance issues arose when the OCM changed its method for measuring proximity to schools. Initially, the office measured distance from the nearest property line but has since revised the calculation to measure in a straight line from the center of the cannabis store entrance to the center of the nearest school entrance. This new measure, included in regulations released in 2023, was deemed in violation of state law by OCM Director Felicia Reid on July 28, 2025.
New York state law prohibits cannabis retail outlets from being located on the same road as schools or within 500 feet of a school’s property line. As a result, existing licensees found to be non-compliant with these proximity laws will not be able to renew their licenses. The current cannabis market in New York is valued at $1.5 billion, with 436 cannabis stores operating statewide.
The proximity restrictions have come under intense scrutiny, particularly given the density of locations in New York City where suitable spaces are scarce. As a result, cannabis operators have pushed for revisions to these restrictions. Concurrently, Governor Kathy Hochul and the OCM are collaborating on proposed legislation that would legitimize the locations of current licensees impacted by these problematic zoning rules.
Affected applicants may be eligible to receive up to $250,000 through a state assistance program, which aims to help cover costs associated with seeking new locations or renovating existing ones. Industry experts caution that New York’s cannabis market may only be sustainable for approximately 1,700 stores, raising concerns about market saturation and potential business closures.
The OCM has expressed awareness of public concerns regarding market saturation. However, the review of new applications is significantly backlogged, with more than 3,000 applications still pending. Lawmakers have voiced frustration regarding the delayed acknowledgment of compliance issues, suggesting that the OCM has been aware of potential conflicts for an extended period. An attorney had previously raised concerns as early as March 2024 about the proximity of certain licensed locations to schools, leading to further examination of OCM’s practices.
The decision to alter the proximity rules was partly influenced by feedback from prospective cannabis operators, who argued that the original requirements were excessively stringent. This change in regulations has led the OCM to issue directives to affected operators, detailing the legal discrepancies between the revised measurement methods and existing statutes.
Concerns about public trust and adherence to regulations have been raised, particularly by former OCM officials. They argue that misapplication of zoning laws undermines confidence in the regulatory system. The marketplace is expected to experience broader repercussions from this miscalculation, potentially driving consumers back to the illicit market as operators face relocation challenges and compliance issues.
The situation continues to evolve as state officials and industry stakeholders navigate the complexities of New York’s cannabis regulations. With an ongoing legislative response in development and financial assistance on the table, the future remains uncertain for those affected by these zoning misapplications.
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Additional Resources
- Long Island Business News: New York Court Strikes Down Riverhead Cannabis Zoning Rules
- Wikipedia: Cannabis in New York
- Riverhead Local: Judge Strikes Down Riverhead Cannabis Zoning Limits
- Google Search: New York cannabis zoning rules
- Newsday: Cannabis Riverhead Zoning Judge Invalid
- Encyclopedia Britannica: Cannabis
- RC Biz Journal: Real Estate Roundup on Cannabis Zoning
- Google News: New York cannabis zoning 2025
Author: STAFF HERE NEW YORK WRITER
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