The Office of Cannabis Management (OCM) has informed 105 licensed dispensaries—and 47 pending applicants—that they must relocate or risk losing their license due to a miscalculation in measuring distance from schools.
OCM, after an internal review found it was measuring compliance incorrectly, based on the Marijuana Regulation and Taxation Act, by comparing school entrances to property boundaries. This oversight has affected approximately 60 dispensaries that are open and almost 90 others in New York City. Kathy Hochul, the Governor of New York State has called this error unacceptable.
Law requires that dispensaries be placed at least 500 ft from school properties and 200 ft from places for worship. OCM has urged the Legislature to adopt corrective legislation which would allow locations that were approved under incorrect guidelines in the past, such as the ones OCM had previously approved.
The government is also working on a fund of $15 million to help affected companies, with relocation grants between $250,000 and $250,000. The government is also preparing a $15 million fund to assist affected businesses, offering relocation grants up to $250,000.
The error was criticized by retailers, and some called it an extension of the regulatory chaos. A growing number of retailers fear market instability, closures and relocation costs.
This incident is a reminder of the proximity issues that continue to plague New York’s marijuana market. Operators had previously sued over the granting of permits to dispensaries too near each other or schools. These changes were made due to confusion regarding buffer zones, waiver policies and other issues.