Major Legal Win For NY Cannabis Licensees (Shops, Delivery Services) Regarding Preserving Their Rights During Administrative Proceedings

A major legal win for NY cannabis licensees – an update from Joshua Bauchner at Mandelbaum Barrett

Joshua Bauchner offers the following for our readers in response to our question (Would one of the attorneys like to provide a layperson’s description of what this means, maybe providing a real life example of what this would look like for a store owner in the midst of this administrative process? ):  “The case represents simplified and expedited legal recourse for cannabis business owners to better push back on unlawful searches and seizures and due process violations (which has sadly been part of their reality in the current environment), saving them unnecessary expense. This in turn, reduces the chances that they will lose their licenses, as well as eliminates or reduces the need to close down their business during drawn-out appeals, which would only add insult to injury from a financial perspective.”

Editor’s note: Joshua Bauchner has previously provided us with an op-ed piece on the topic of cannabis businesses and the Constitutional case they were involved in with the City and State of New York, where an accusation (without actual proof or due process) of illegal activity was sufficient to close down their stores, seize their product, and destroy it before it could be presented as evidence to prove that they were selling substances that were legally permitted under federal and state law. This was causing undue financial hardship to these businesses, many of whom were operating within the law and had already invested substantial funds into their businesses. 

I wanted to share news about a major legal win for New York cannabis licensees that Joshua S. Bauchner, James V. Mazewski, and Alexa La Barbiera of Mandelbaum Barrett PC secured in a precedent-setting decision that strengthens the rights of businesses facing Office of Cannabis Management (OCM) enforcement actions.

The Case

In ROC It Out Wellness, LLC (Aug. 13, 2025), the OCM argued that respondents could not raise constitutional objections—such as due process violations or unlawful searches and seizures—within its administrative hearings. Instead, the agency claimed these arguments had to be brought in a costly Article 78 proceeding in New York State Supreme Court.

We challenged that position—and won. The Administrative Law Judge ruled that certain constitutional claims can be heard in OCM administrative proceedings. This allows businesses to defend themselves on all available grounds within the initial case, rather than being forced into serial litigation while potentially sealed and unable to operate to generate revenue to prosecute their rights.

Why This Matters for Cannabis Businesses

Before this ruling, OCM’s stance meant:

• Limited ability to defend against enforcement actions in real time.
• Higher legal costs to bring separate court proceedings.
• Increased risk of losing licenses or staying closed during drawn-out appeals.

Now, cannabis businesses can:

• Challenge unlawful OCM raids and seizures during the hearing itself.
• Preserve arguments on vague OCM guidance—including ever-changing regulations—for judicial review.
• Raise selective enforcement claims in the administrative record to protect appellate rights.

 

Statewide Impact Beyond Cannabis

This ruling applies not just to cannabis enforcement—it affects all New York State administrative hearings. Although non-binding, it establishes that state agencies should allow certain constitutional objections to be heard directly in administrative proceedings.

A True David vs. Goliath Victory

This ruling ensures fairer, more cost-effective defenses for small businesses and safeguards constitutional protections in the face of aggressive governmental overreach. It’s a game-changer for anyone navigating New York cannabis law or other regulated industries.

Read the full court order here.

Banner Image:  Cannabis business. Image Credit – Damian Barczak