New York marijuana stores sue state regulator after school snafu

New York marijuana retailers affected by the controversy over cannabis sellers’ proximity to schools – including the first store to open in December 2022 – sued state regulators on Friday.

The state Office of Cannabis Management’s recent decision that  more than 150 retail permits are now out of compliance  is “catastrophic and legally indefensible,” according to a complaint filed Friday in Albany County Superior Court.

OCM did not immediately comment on the litigation, which names the agency, the state Cannabis Control Board (CCB), board Chair Jessica Garcia and OCM acting Executive Director Felicia Reid as defendants.

New York’s first marijuana store, others sue state

According to the lawsuit, the plaintiffs are seven licensed and operational stores and another five permit holders that have yet to open for business.

They include prominent stores in New York City such as Housing Works, which recorded the first legal sale in New York, and ConBud.

The suit asks a judge to intervene and prevent OCM from enforcing the new rule as well as a declaration that the litigants’ applications or license renewals can’t be denied based “on newly identified reasons.”

State law requires a 500-foot buffer zone between licensed cannabis stores and schools.

It was Reid who in July reversed prior OCM policy of measuring the distance between a marijuana outlet and a school from entrance to entrance.

That was a deliberate decision made under Reid’s predecessor Chris Alexander, in part because finding compliant real estate in New York City would be too difficult without it.

Judging the distance instead from property line to property line affects 152 stores.

Uncertainty for affected cannabis stores amid fix

Gov. Kathy Hochul has said that the stores can stay open while the state Legislature amends New York law to ensure all licensed businesses can stay operational.

However, several affected stores are due to renew their permits before lawmaking resumes in Albany.

Those stores “can remain fully operational … until CCB makes a determination on the renewal,” Reid said in an Aug. 6 memo.

That’s still too much uncertainty for Osbert Orduña, CEO and founder of The Cannabis Place, which has a location in Queens affected by the proximity snafu.

“This abrupt action against 152 licensed dispensaries only adds confusion to the legal market and turns our communities back to the transnational criminal organizations that supply the illicit market in New York,” Orduña told MJBizDaily on Monday.

“It’s  a sad day for New York,” he added.

There are currently 453 stores in New York State, according to OCM data.

Annual sales are on pace to exceed $1.6 billion.