News Summary
A group of twelve cannabis dispensaries, including Conbud and Housing Works, have filed a lawsuit against the New York Office of Cannabis Management (OCM) over new regulations that require dispensaries to be situated at least 500 feet from school property lines. Previously, the measurement was taken from the front doors of schools. The dispensaries argue that the new guidelines, which could threaten their financial stability, lack formal rulemaking and violate the State Administrative Procedure Act. The lawsuit challenges the OCM’s revised interpretation of the law, seeking to annul it and prevent enforcement actions.
Albany, New York – A group of a dozen cannabis dispensaries, including notable names like Conbud and Housing Works, has taken legal action against the New York Office of Cannabis Management (OCM) in response to a change in the regulatory framework governing their proximity to schools. The lawsuit, filed on August 15 in the New York Supreme Court in Albany County, challenges the OCM’s new measurement guidelines that require cannabis dispensaries to be located at least 500 feet from a school’s property line.
Previously, the OCM measured distance from the front door of schools to dispensaries. The recent adjustment, made public through a school proximity correction on July 28, affects 108 licensed dispensaries and 44 provisional applicants. Following the announcement, OCM Acting Executive Director Felicia A.B. Reid assured that the 108 existing licensees could continue operation while a legislative fix is sought. However, the 44 applicants will be required to relocate; these businesses are eligible for $250,000 in relief from a $15 million fund set aside for affected entities.
The dispensaries involved in the lawsuit assert that the OCM’s new interpretation of the law lacks formal rulemaking, therefore violating the State Administrative Procedure Act. Their legal action seeks to annul the OCM’s revised interpretation and to prevent any enforcement actions that could disrupt their operations. Petitioners argue that the OCM’s regulatory changes pose a significant threat to their financial stability, as they have invested substantial personal resources—often their life savings—into establishing their businesses based on prior guidance from the OCM.
Out of the twelve businesses taking part in the legal challenge, seven are currently operational, while five are in the process of finalizing their provisional licenses. The vast financial investments for some dispensaries have resulted in construction costs ranging between $500,000 and $1,000,000, significantly exceeding the relief funding available for their relocation. Consequently, petitioners highlight the risk of irreparable harm, financial ruin, and potential breaches of lease agreements stemming from the OCM’s revised regulatory stance.
Notably, eleven of the twelve plaintiffs hold conditional adult-use retail dispensary (CAURD) licenses, which prioritizes them for licensure due to ownership by individuals with justice involvement. The lawsuit emphasizes that the OCM’s actions are likely to disproportionately affect stakeholders who do not have access to generational wealth, jeopardizing the financial stability and equity outcomes that the Marijuana Regulation and Taxation Act (MRTA) aimed to achieve.
As the situation develops, the New York State Legislature has yet to propose a definitive legislative fix, with ongoing discussions anticipated to extend into January of next year. Assemblyman Alber A. Stirpe Jr. has put forth a proposal that would align cannabis store distance regulations with those governing liquor stores. Meanwhile, State Senator Luis Sepulveda has suggested the idea of grandfathering existing stores under earlier rules to clarify compliance issues.
Currently, Governor Kathy Hochul has not publicly endorsed any proposed changes to the legislation affecting cannabis dispensaries. As the legal proceedings move forward, the dispensaries involved in the lawsuit seek a court ruling that clarifies their locations as consistent with previous interpretations of the law, thereby potentially preserving their operational status and mitigating the risk of enforced closures.
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Additional Resources
- The New York Times
- Wikipedia: Cannabis in New York
- Cannabis Business Times
- Google Search: cannabis dispensaries lawsuit New York
- Times Union
- Google Scholar: New York cannabis lawsuit
- ABC News
- Encyclopedia Britannica: Cannabis
- Ganjapreneur
- Google News: cannabis New York lawsuit
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