OCM informs cannabis dispensaries they must relocate further away from schools

New York’s cannabis industry may be stabilizing, but the state’s work to right the ship is far from over. Nearly 200 Conditional Use Adult Retail Dispensaries license holders and applicants were given the go-ahead for dispensary locations that violate school proximity regulations. Affected storefronts will need to move before renewing their licenses, and those still going through the application process will need to alter their plans, per a letter sent today by the state Office of Cannabis Management.

“The current location of your business is in violation of the Cannabis Law … I am keenly aware that this information will have repercussions for you, your business, and your community. You have poured your energy, time, savings, dedication, and heart into the promise of New York’s cannabis industry. To give you this news, and for the weight of it, I am incredibly sorry,” reads the letter sent to licensees signed by OCM Acting Executive Director Felicia Reid. A similar letter was sent to applicants for licenses.

State law prohibits dispensaries within 500 feet of a school’s property line and 200 feet of a church’s property line, but an internal review of OCM’s practices found that some cases slipped through the cracks during the agency's early days. A misapplication of local zoning codes saw regulators misjudge distances by measuring from a school’s entrance rather than from its property line. A source familiar with the situation told City & State that the governor was furious when briefed on the issue before assembling her staff.

OCM ultimately determined that 105 retail dispensary license holders would be affected, 53 of which are located in New York City; however, 43 of those 105 licensees aren’t operational yet. An additional 47 applicants for licenses are also expected to be affected. OCM and the Hochul administration are hoping that new legislation could grandfather in dispensaries that were inadvertently given the licenses.

The early years of OCM were characterized by lawsuits and a slow-moving regulatory process that hindered the legal cannabis industry’s growth. Farmers complained of a ruinous tax system, and retail operators were worried about the proliferation of illegal pot shops. Things are hardly perfect anywhere within the cannabis supply chain, but an audit of OCM ordered by Gov. Kathy Hochul, as well as a change in its leadership, have given some hope that the future of legal cannabis in New York will go more smoothly. Despite the recent progress, Reid acknowledged that problems from OCM’s past are still being dealt with.

“This was a difficult but necessary decision to bring the Office’s practices into full alignment

with Cannabis Law. I recognize the impact this correction may have on licensees and

communities, and I want to be clear: our success as a regulatory body is tied directly to the

success of our licensees,” Reid said in a statement. “We are actively pursuing legislative solutions to protect impacted businesses, and we remain committed to learning from past missteps to ensure a more stable, transparent, and legally sound cannabis industry moving forward.” 

The Cannabis Association of New York did not respond to requests for comment. 

Read the full letters from OCM here: