News Summary
A group of 12 cannabis dispensary owners has filed a lawsuit against New York state regulators, challenging new proximity rules that they claim could force their businesses to close. These rules, imposed by the Office of Cannabis Management, measure distances to schools differently than before, raising compliance concerns for many dispensaries. The plaintiffs argue the changes violate previous approvals and have negatively impacted businesses, especially those from marginalized communities. Initial court hearings for the lawsuit are scheduled to begin soon, and a legislative fix is being sought.
Albany, New York – A group of 12 cannabis dispensary owners has initiated a lawsuit against state regulators, claiming they could be compelled to close their businesses due to new regulations concerning proximity to schools. The legal action was triggered by a notification from the Office of Cannabis Management (OCM), asserting that the dispensaries’ locations breach the state’s cannabis legislation.
The lawsuit, filed in the New York Supreme Court in Albany County on August 15, centers around a recent revision by the OCM regarding the distance measurement between cannabis dispensaries and schools. Previously, the distance was calculated from entrance to entrance; however, the OCM has altered this interpretation to measure in a straight line from the cannabis store entrance to the nearest property line of a school. This revision has significant implications for 108 dispensary licensees and 44 applicants, raising serious concerns about compliance and the renewal of their licenses.
In July, nearly 200 Conditional Adult-Use Retail dispensary license holders received notices from the OCM indicating that their locations were deemed noncompliant under this revised interpretation. While OCM Acting Executive Director Felicia A.B. Reid has confirmed that the businesses affected do not need to relocate immediately, the challenge remains that they will confront obstacles when it comes to the renewal of their licenses.
The plaintiffs are aiming to halt the enforcement of this new proximity rule and seek a declaration that their businesses are compliant with the earlier interpretation that allowed their establishments. They argue that these prior approvals had led them to invest significant resources in their operations based on the state’s initial guidelines.
Seven dispensaries operating under this revised distance rule cannot renew their licenses due to expired licenses, creating financial difficulties and potential risks of collapsing under lease obligations. The plaintiffs emphasize that the reinterpretation of the law was executed without a formal rulemaking process, which they argue violates the State Administrative Procedure Act.
Many of the impacted businesses contend that the OCM’s sudden policy shift disproportionately affects them, particularly those from historically marginalized communities who have invested millions into their shops based on the earlier regulatory framework.
To address this regulatory issue, a bill aimed at grandfathering in the affected businesses was introduced in the state legislature on August 4. OCM officials have stated they are working diligently to find a legislative fix, with expectations for negotiations to occur in early 2024.
The initial court hearings concerning the lawsuit are scheduled for August 29, and discussions surrounding its implications for the cannabis industry in New York will likely be closely monitored by stakeholders. Businesses mentioned in the lawsuit include notable names such as ConBud, The Cannabis Place, and Housing Works Cannabis Co., all emphasizing their compliance with earlier OCM approvals.
As the situation unfolds, the outcome of the legal challenge could redefine compliance requirements for cannabis dispensaries in New York and set a precedent for future regulatory interpretations affecting the industry. Stakeholders and observers remain attentive to both the legal proceedings and potential legislative responses to ensure clarity and stability for licensed cannabis operators in the state.
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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
- Ganjapreneur
- Encyclopedia Britannica: Legalization of Cannabis
- Times Union
- Google News: cannabis proximity lawsuit New York
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