In New York, a major controversy has enveloped the state's recreational marijuana market, with state officials seeking solutions to avoid relocating 152 licensed dispensaries as reported by Crain's New York. The conflict arose after the Office of Cannabis Management (OCM) disclosed that many dispensary sites were approved too close to schools, breaching the 500-foot setback required by the 2021 Marijuana Regulation and Taxation Act (MRTA).
Former OCM leaders, including Chris Alexander, who left the agency in 2024, oppose the current administration's characterization of this issue as a mistake. They argue the decision to measure distance to school doors, rather than property lines, was a strategic and deliberate enforcement to ensure adequate dispensary locations within New York City, where numerous illegal cannabis sellers outnumber legal sites.
This policy shift was reportedly backed by Governor Kathy Hochul's office and other state bodies. Alexander stated that the door-to-door measurement model mirrored regulations from the liquor industry and was legally defensible. However, the governor has criticized the application of these rules as contrary to their original legislative intent. Alexander claims the recent change to measure from property lines is politically driven by the governor's office, rather than a genuine correction by new OCM leadership.
Resolving the issue remains complex, involving legislative changes unlikely before lawmakers reconvene in January. In the meantime, the state has allocated $15 million to aid affected businesses as they seek new locations. Cannabis entrepreneurs express anxiety over potential losses if forced to relocate. The proposed legislative solution would allow dispensaries approved prior to July 28 to operate despite the setback requirements. However, tensions are high, with anticipated legal challenges against the state due to previous awareness of the measurement dilemma highlighted by attorney Jeffrey Jensen.
