NYC Dispensaries Seek Justice in Court Over Schools Proximity Blunder

NEW YORK – A coalition of licensed Cannabis dispensaries filed suit against New York regulators on Friday, claiming a state error in enforcing school buffer zones threatens their operations and could force closures or costly moves. The action, brought in State Supreme Court, stems from the Office of Cannabis Management’s recent admission that it misapplied distance rules, approving sites that fall short of legal requirements.

State law mandates that retail cannabis outlets maintain at least 500 feet between their entrances and school property lines. For years, however, regulators measured this buffer from door to door (school entrance to shop entrance), a method officials now concede was incorrect. This oversight allowed more than 150 dispensaries to secure licenses and, in many cases, open for business. In July, the agency corrected its approach, notifying affected owners that their locations violate the statute.

The plaintiffs, representing about a dozen businesses, argue that the state should honor the original approvals. They contend that revoking permissions now would undermine investments totaling millions, including leases, renovations and inventory. One unnamed owner, speaking through counsel, described pouring life savings into a storefront only to face abrupt relocation demands. The suit seeks a judicial order affirming the sites’ compliance under the prior interpretation and barring any penalties.

Financial stakes run high. Relocating could cost upwards of $250,000 per shop, according to agency estimates, though the state has pledged grants in that amount to assist. Yet owners say such aid falls short, especially for those already serving customers. With around 450 legal dispensaries statewide, the issue affects roughly one-third of the market, potentially disrupting supply chains and consumer access.

Regulators have offered temporary relief, permitting continued sales for shops with renewal applications pending. Spokespeople for the Office of Cannabis Management declined comment on the litigation but pointed to efforts urging lawmakers to amend the law, allowing grandfathered exceptions. The Legislature, however, won’t reconvene until January, leaving businesses in limbo.

This dispute highlights ongoing hurdles in New York’s cannabis sector, launched three years ago with aims of equity and economic growth. Persistent problems, from bureaucratic delays to rampant unlicensed competitors, have slowed progress. Sales have climbed, but so have frustrations among operators who bet on state guidance.

The case underscores a key tension: regulatory precision versus business stability. If unresolved favorably, it risks eroding trust in the system, deterring future investment and strengthening illicit markets. A swift legislative patch could preserve gains, but prolonged uncertainty may test the industry’s resilience.