In a dramatic correction to its licensing protocols, New York’s Office of Cannabis Management (OCM) has identified 152 cannabis retail licensees and applicants whose dispensary locations violate Cannabis Law § 72(6)—a statute barring storefronts from operating within 500 feet of school grounds or 200 feet of houses of worship. Allegedly 200 letters have been sent out. The question btw is "how quickly will the NYS legislature pick this up and push an amendment to the MRTA through to prevent a catastrophic outcome?" Jeffery Schultz, Partner @ Foley Hoag LLP 

🔍 What Happened?

After conducting an internal policy audit, the OCM announced that its previous methods for measuring distance were legally inaccurate, dating back to practices adopted in 2022. The law requires a straight-line measurement from the entrance of the dispensary to the property line of the nearest school, and many locations were previously evaluated using less precise or inconsistent standards.

Now, with the agency aiming to align fully with the Marijuana Regulation and Taxation Act (MRTA), this "practice correction" has placed dozens of businesses in jeopardy—despite initially receiving state approval.

đź“Ť Who's Affected?

So far:

  • 105 licensed dispensaries are at risk of non-renewal unless they relocate.
  • 47 retail applicants must secure new compliant locations to proceed with licensure.
  • Most impacted businesses are based in New York City, with others spread across regions including Long Island, Mid-Hudson, the Finger Lakes, and Western New York.

OCM also notes that six additional entities are under active visual review, and more may emerge as the assessment continues.

Despite the severity of the issue, the agency has not released the names of affected businesses, stating only that impacted parties have been directly contacted via phone, email, and formal letters.

“We understand the burden this creates for entrepreneurs who followed previous guidance in good faith,” said a spokesperson from OCM. “That’s why we’re launching targeted support to ease this transition.”

🛠️ Relief, But No Guarantees

To mitigate the fallout, the Governor’s Office, OCM, and Empire State Development have launched a $15 million Applicant Relief Program, offering up to $250,000 in reimbursements per applicant for:

  • Finding a new location
  • Capital improvements or lost costs from the now-disqualified site

For licensees, the path forward is murkier. The state plans to introduce emergency legislation that would allow existing dispensaries to remain at their locations despite proximity violations. But the bill’s passage is not guaranteed, and if it fails, affected licensees will need to move before their next license renewal.

⚖️ A Regulatory Reckoning

This policy shift comes amid broader frustration with New York’s cannabis rollout. With thousands still waiting in the December 2023 licensing queue and a growing perception that regulators favor large multi-state operators, this error has only intensified criticism.

“How can we build equity in this market if small operators get punished for the state’s own missteps?” one anonymous applicant told Honeysuckle.

🧭 What’s Next?

  • Impacted applicants must relocate before advancing in the licensing process.
  • Licensees in violation must secure new compliant addresses ahead of renewal, unless new legislation offers relief.
  • OCM says it will continue to conduct outreach and provide resources, including access to the LOCAL Map tool to help applicants evaluate property proximity to schools.

🗣️ Concerned you may be affected?
Contact Locations@ocm.ny.gov for direct inquiries.

đź’¬ Stay tuned for more updates as this story develops—and as the New York cannabis community continues to navigate one of the nation’s most complex legal rollouts.

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