NYC Near-School Cannabis Dispensaries Avoid Shutdown or Relocation

NEW YORK – A significant number of New York’s licensed Cannabis dispensaries, previously at risk of closure for being too close to schools, have received a lifeline from state regulators. The Office of Cannabis Management (OCM) announced that these businesses will not be forced to shut down or relocate, as Governor Kathy Hochul and state legislators plan to amend the law to address a critical measurement error.

The issue stems from a misinterpretation of a state regulation that requires dispensaries to be at least 500 feet away not only from a school’s entrance but also from its property line. Initially, the OCM measured this distance from a school’s front door, leading to the approval of 152 dispensaries (108 already operational and 44 pending applicants) that violate the correct standard. Most of these businesses, particularly 89 in New York City, were found to be too close to schools when measured from the property line, as mandated by the 2021 Marijuana Regulation and Taxation Act.

Felicia A.B. Reid, acting executive director of the OCM, acknowledged the error in a letter to affected businesses, emphasizing the agency’s commitment to a legislative solution. “We are actively pursuing legislative solutions to protect impacted businesses,” Reid stated, noting that Governor Hochul supports amending the law to allow these dispensaries to remain at their current locations. The state has also allocated $15 million to assist pending applicants with relocation costs, offering up to $250,000 per business to secure compliant sites.

The correction has sparked concern among NYC dispensary owners, where dense school populations make compliant real estate scarce. Many of these businesses were licensed under social equity programs, amplifying fears that closures could undermine the state’s commitment to restorative justice. State Senator Liz Krueger called the situation a “government-invented crisis,” while City Council Member Gale Brewer advocated for grandfathering existing shops into compliance to avoid economic disruption.

Legislation to address the issue is not expected until January 2026, when the state legislature reconvenes, leaving some businesses caught in uncertainty as their licenses approach renewal. The OCM has assured that no immediate closures are required, and affected dispensaries can continue operations pending the legislative fix.

This development highlights ongoing challenges in New York’s Cannabis industry, which has faced delays, lawsuits, and competition from unlicensed shops. For now, dispensary owners and their communities await clarity as the state works to rectify its error and stabilize the market. With 444 licensed dispensaries now operational, the proposed law change aims to balance regulatory compliance with the economic realities.