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NY Cannabis Dispensaries Sue State Regulators Over Rule Change

Dispensaries Fight to Save New York’s Legal Cannabis Industry

A group of licensed cannabis dispensaries in New York is taking legal action against state regulators over a recent rule change that could have devastating consequences for the industry. The coalition, known as “Save New York Legal Cannabis for All,” announced their lawsuit in a joint statement on Aug. 21, just three days after the rule change was first implemented.

The dispensaries argue that the reinterpretation of a law requiring cannabis shops to be at least 500 feet from schools disproportionately affects equity licensees and could result in the closure or relocation of 152 dispensaries statewide. A preliminary hearing for the case is scheduled for Aug. 29 in Albany.

The Twelve Petitioners

The lawsuit was filed on Aug. 15 in State Supreme Court in Albany and includes twelve petitioners, seven of which are currently open or fully approved dispensaries (ConBud, The Cannabis Place, Summit Canna, Hush, High Fade, Housing Works Cannabis Co., and Common Courtesy Dispensary) and five provisionally licensed applicants (Rezidue, Elise Pelka, Toastree, Monarch NYC, and Luxe Leaf Boutique). These businesses are located in Manhattan, Queens, and the Bronx, as reported by Cannabis Business Times.

The Arguments

According to the complaint, the dispensaries “poured their life savings into launching their businesses” after receiving approvals from the state, only to be told that their locations are now in violation of the law. The petitioners argue that the Office of Cannabis Management (OCM) changed its interpretation of the law without following the proper rulemaking process, which is a violation of the State Administrative Procedure Act. They also claim that the sudden change deprives them of due process and equal protection.

Attorney Jorge Luis Vasquez Jr., who represents the plaintiffs, emphasized that the harm goes beyond just financial losses. He told Gothamist, “This is way more than just financial harm to small businesses. This goes beyond money. This is time. This is resources. This is energy. This is building relationships with communities.”

The Stakes

State officials have acknowledged that the rule change affects 108 licensed businesses and 44 provisional applicants. While licensed businesses have been told they can continue operating for now, they will not be able to renew their licenses until lawmakers take action. Provisional applicants will need to relocate, with access to a $15 million fund that offers up to $250,000 each, according to Gothamist and the Associated Press. The future of New York’s legal cannabis industry hangs in the balance as the lawsuit moves forward. 

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