A visual representation of cannabis dispensaries operating in New York City facing legal action over competitive waivers.
A coalition of cannabis dispensaries in New York City, led by Actualize Dispensary, is suing the New York Office of Cannabis Management over waivers permitting the opening of new shops too close to existing ones. They argue this undermines state laws aimed at maintaining market viability and fairness. The lawsuit has gained backing from other dispensaries concerned about competition as the number of licensed shops in the state is expected to double by 2025. The ongoing legal battles raise significant questions about the OCM’s regulatory practices.
New York City – A coalition of cannabis dispensaries is taking legal action against the New York Office of Cannabis Management (OCM), challenging the issuance of waivers that allow pot shops to open near existing establishments. The lead plaintiff, Actualize Dispensary, also known as Chelsea Cannabis Co., filed the lawsuit in January 2025, claiming that the OCM’s actions violate state cannabis laws designed to limit market saturation.
The lawsuit raises concerns that the recent waivers, which permit dispensaries to operate within 1,000 feet of one another, were granted without adequate notification, analysis, or due process. This distance is crucial to ensuring that the cannabis market remains viable and that competition does not reach unsustainable levels. Compounding concerns, the lawsuit notes that four dispensaries—Actualize Dispensary, Astro Management, L.O.R.D.S., and R&R Remedies—are now facing increased competitive threats due to new approvals for nearby dispensaries.
Among the notable approvals is a cannabis shop that was permitted to operate within 956 feet of Astro Management, a decision that the latter claims breaches legal stipulations. In addition to Actualize Dispensary and Astro Management, the lawsuit includes other plaintiffs from New York City, including L.O.R.D.S. and R&R Remedies.
The plaintiffs assert that the waivers undermine the objectives of the Conditional Adult-Use Retail Dispensary (CAURD) program. The program was created to support equity within the cannabis industry and protect existing businesses from overwhelming competition. This legal challenge has garnered attention from other CAURD licensees, with 38 additional dispensaries voicing their support for the plaintiffs, stressing the detrimental impacts that the waivers could have on their operations.
According to reports, there are currently 283 licensed cannabis shops in New York State, and forecasts predict this number could more than double by the end of 2025. Those in the industry are increasingly concerned that the issuance of excessive waivers by the OCM could lead to an oversaturated market, severely harming established businesses and stifling their financial viability.
In a related development, a state judge recently sided with a group of plaintiffs in another case against the OCM, ruling that the agency had improperly disqualified their dispensary license applications based on flawed regulatory criteria. This ruling has raised further questions regarding the OCM’s licensing process and its overall regulatory practices.
The cannabis industry in New York has been fraught with challenges since its legalization, as the rollout of the market faces scrutiny, especially regarding the regulation of illegal shops. The industry has seen widespread dissatisfaction with how the OCM handles its responsibilities, leading to over a dozen lawsuits concerning its licensing practices.
Prominent industry associations, including the New York Cannabis Retail Association and the National Hispanic Cannabis Council, have expressed their backing of the plaintiffs involved in the lawsuit. Their support underscores the larger concern among licensed dispensaries that competition resulting from waivers could irreversibly impact their survival.
The OCM and the Cannabis Control Board (CCB)—the entities responsible for overseeing cannabis operations in the state—are under the purview of Governor Kathy Hochul. The current lawsuit adds to the growing list of legal challenges confronting these organizations, raising significant questions about their regulatory actions and their future impact on New York’s cannabis market.
As the situation develops, the impact of this legal battle on the cannabis industry’s landscape in New York remains to be seen. Stakeholders are keenly awaiting a resolution that could shape the competitive dynamics of the market in the years to come.
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