Cannabis Conundrum Heads To NY Supreme Court: Lawsuit Seeks To Overturn Impossible-To-Obey Regulation

Just when you thought it was safe to expect the launch of New York's beleaguered retail cannabis program, another lawsuit has hit the docket of the state Supreme Court.

Gracious Greens, a cannabis retail license applicant, is suing New York's Office of Cannabis Management (OCM) over a regulation mandating that retail weed shops must be at least 1,000 feet away from each other… but there's a catch.

Aah, Where Exactly Are The Other Weed Shops?

Gracious Greens (GG), owned by a service-disabled veteran, rightly contends that the OCM does not provide applicants with any way of knowing where other shops are located or planning to open, essentially making it impossible for prospective companies to know if they're following the rules or not. The basis of the lawsuit, say GG's attorneys Andrew Schriever and David C. Holland of Prince Lobel Tye LLP, is to overturn the confusing regulation.

Vicious Circle?

Schriever says the OCM is misinterpreting and overly extending the reach of its own regulation. Instead of applying it solely to licensed dispensaries that are physically open and therefore readily identifiable, the OCM is enforcing its "proximity protection" on proposed dispensaries, without disclosing their locations.

"Lacking such information and transparency prior to the [December 2023] close of the application window caused Gracious Greens and others to secure properties and utilize them in the application process without having been put on notice by the OCM that they would be invalidated by the presence of a competitor whose location the OCM is going to prioritize by using this regulation," Schriever told Benzinga. 

Impossible To Follow The Rules

David Holland explained that it gets worse in that local approvals were later invalidated due to the OCM's proximity protection afforded to two other proposed cannabis retail locations.

Schriever added that even if Gracious Greens found a suitable location that satisfied all local zoning requirements, "it could be blocked from getting a license because of a competitor’s undisclosed application."

What's To Be Done? See You In Court

In light of these issues, GG is challenging the constitutionality of the OCM regulation on both procedural and substantive grounds, Schriever and Holland explained.

"In seeking to prevent its own irreparable harm – to avoid losing a licensing opportunity in a brand-new market based on the application of what we believe is an unconstitutional regulation,” Schriever said, “Gracious Greens is also advocating for the rights of many applicants, as well as all municipalities throughout the state whose zoning authority has been and would be irreparably supplanted if injunctive relief is not granted by the court."

These and other thorny legal issues will surely be discussed at the upcoming Benzinga Cannabis Capital Conference in Florida on April 16 and 17.

The two-day event, being held at The Diplomat Beach Resort is a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world. Get your tickets now on bzcannabis.com – Prices will increase very soon!

Image generated using artificial intelligence with Midjourney.