(The Center Square) — A group of New York pot retailers is suing the state over a misinterpretation in calculating the allowable distance between cannabis businesses and local schools that has put more than 150 shops at risk of closure.
The lawsuit, filed Friday in state Supreme Court in Albany, alleges that the New York Office of Cannabis Management’s policy change violates the State Administrative Procedure Act by bypassing the required public comment period.
Lawyers for the plaintiffs, who represent about a dozen cannabis shops, said they have spent millions of dollars on their businesses and the “catastrophic” rule change will deprive them of state rights to due process and equal protection.
They’ve asked the court to prevent the state agency from enforcing the distancing requirements.
In June, state regulators notified 152 pot dispensaries that they are in violation of a state law requiring at least 500 feet from the property lines of schools or houses of worship. That’s different from the distance measurements regulators took when they first approved retail pot licenses to open for business, which measured the distance from the entrances of the buildings.
State regulators said the mistake means pot businesses likely won’t have their licenses renewed unless the state Legislature makes changes to the law or approves a waiver from the regulations for operators who were previously approved.
Gov. Kathy Hochul’s office has set up a $15 million fund allowing impacted pot businesses to file claims up to $250,000 to help them relocate and restart their business.
New York legalized recreational cannabis in 2021 under legislation signed by then-Gov. Andrew Cuomo, allowing cultivation and retail sales and setting up a system of taxation and regulation for the new industry. To date, about 436 retail pot shops have opened, state regulators say.
The rollout was slowed by legal challenges, including a ruling by a New York judge that halted new licenses under a program that favors people with previous drug conviction charges.
Other lawsuits have focused on the allowable distances between each pot shop, which is strictly regulated by the state.
Amid the delays in licensing legal pot shops, illegal storefront operations have proliferated in New York City and cities, prompting state and local authorities to crack down on unlicensed sales.
To date, at least 24 states, the District of Columbia and the U.S. territory of Guam have legalized recreational marijuana, to the National Conference of State Legislatures. Thirty-eight states have medical marijuana programs
