News Summary
The New York Office of Cannabis Management announced that 152 cannabis retail businesses are facing closure due to non-compliance with location regulations near schools. Current regulations mandate dispensaries be at least 500 feet from schools, but oversight errors led to violations impacting both existing and pending businesses. State officials are exploring legislative solutions to help affected dispensaries while proposing a $15 million relief program for those seeking compliant locations. The situation underscores the challenges faced within New York’s cannabis market amid scrutiny of regulatory oversight.
New York – The New York Office of Cannabis Management (OCM) announced on July 28, 2025, that 152 cannabis retail businesses are at risk of closure due to their locations being too close to schools. This violation of state law has significant implications for a mix of medical cannabis and adult-use dispensaries that have established operations in the vicinity of school grounds, with some businesses having opened as recently as this year.
According to state regulations, cannabis dispensaries must be situated at least 500 feet away from school premises and 200 feet from churches or other houses of worship. This requirement is in place to minimize the exposure of children to cannabis products and maintain community standards. However, the OCM’s oversight in interpreting these regulations has resulted in 108 dispensaries already operating and 44 that have pending applications being considered non-compliant.
The OCM’s previous guidelines, instituted in 2022, mistakenly indicated that dispensaries could be deemed compliant if their entrances were more than 500 feet away from school buildings or located on separate roads from schools. This measurement approach, focusing on entrances rather than property boundaries, has been recognized as flawed, leading to the present crisis.
Felicia A. B. Reid, the Acting Executive Director of OCM, has expressed regret regarding the challenges that this oversight has created for the affected businesses and their communities. Operators of the impacted dispensaries now face the daunting task of securing new, compliant locations to sustain their operations or continue navigating the licensing process.
In response to this significant challenge, state officials are pursuing a legislative solution that may allow the 108 affected dispensaries to remain operational without needing to relocate. Governor Kathy Hochul has indicated her commitment to supporting these businesses and recognizing the difficulties they are experiencing within their respective communities.
Additionally, the OCM has proposed a relief program amounting to $15 million for the 44 pending applicants. This initiative aims to alleviate some financial burdens by providing funding of up to $250,000 per business for expenses related to finding new locations, relocation fees, or capital improvements to remain compliant.
Despite the compliance issues, dispensaries not meeting the regulations are still permitted to submit renewal applications for their licenses. However, renewals cannot proceed until a legislative fix has been put into place, leaving many dispensaries in a precarious situation.
The issue of proximity measurements came to light during an audit that followed a leadership change within OCM. The agency’s handling of cannabis regulations has faced scrutiny as industry members describe the oversight as a significant governance failure, threatening the stability of licensed cannabis operators in New York. The cannabis market in the state is already grappling with the challenges posed by high real estate costs, particularly in major urban centers such as New York City.
Advocates are calling for accountability from the state regarding OCM’s missteps that have led to detrimental impacts on numerous businesses and their investments. Previous guidance errors have been traced back to former OCM leadership under Chris Alexander, who resigned amid criticism of the adult-use program’s rollout.
Jeffrey Jensen, an industry attorney, had brought the measurement issue to the attention of OCM officials over a year ago, yet the agency did not act on the information until recently, exacerbating the problem faced by current dispensary operators.
If a legislative solution is not secured, affected dispensaries risk having to close their doors or move to new locations, posing a significant challenge to businesses that have already invested substantial resources into their current settings. OCM is dedicated to ensuring future compliance with state law while aligning its practices with the established Cannabis Law moving forward.
Deeper Dive: News & Info About This Topic
HERE Resources
Over 150 Cannabis Retailers in NYC Face Relocation
Over 100 Cannabis Dispensaries in NYC Face Closure Risk
New York Cannabis Dispensaries Face Possible Closure Due to Miscalculations
New York Dispensaries Found Operating Near Schools Illegally
New Cannabis Dispensary Opens in Aquebogue
Cannabis Retail Shops in New York Face Relocation Crisis
New York Cannabis Shops Face Closure Due to Distance Miscalculation
New York Office of Cannabis Management Corrects Proximity Guidelines
New York State Cannabis Dispensaries Face Regulatory Crisis
New York’s Cannabis Regulators Acknowledge Enforcement Error
Additional Resources
- Cannabis Business Times
- Wikipedia: Cannabis in New York
- The New York Times
- Google Search: cannabis dispensaries New York schools
- City & State NY
- Encyclopedia Britannica: Cannabis
- News 10
- Google News: cannabis dispensaries New York closure
- CBS News
- Google Scholar: cannabis regulations New York
- NY1
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