Staten Island’s Senator Seeks To Clarify Cannabis Law Measuring Error Regarding Schools, Preschools: Improperly Issued Licenses Now In Jeopardy

We recently provided some information from Mr. Bauchner specifically regarding the changes in legal cannabis products, specifically those high in CBD, the non-psychoactive component that has already shown great promise in treating epilepsy, anxiety, and chronic pain, among other chronic health conditions.  These changes were made in the OBBBA, which also has had some detrimental effects on education, especially regarding student loans and eligibility for such loans, along with borrowing limits and redefining professional licenses (to NOT include Nurses, Social Workers, and many other professions normally filled by women).  This is Senator Scarcella-Spanton  at a press conference about the cannabis shop in question

To answer the following questions, we have included a post by Joshua Bauchner below that explains this issue and its ensuing lawsuits:

Does your law firm have any opinion on the error in measurement that has now caused multiple dispensary shops in New York to possibly be forced to close or move due to unintentional proximity to preschools and elementary schools?  Are lawmakers concerned that children will be served at these locations?   

Senator Scarcella-Spanton has introduced a measure in the Senate.  The law the senator has proposed states in part: “An act to amend the cannabis law, in relation to doubling the distance allowed between cannabis storefronts and premises for adult-use on-site consumption and school grounds and houses of worship; and restricting their distance with a child day care”

It should be noted, importantly, that no one has ever died from an overdose of a cannabis product, according to the DEA and other sources.  The DEA, in attempting to induce an overdose with the substance, found that there was no dose high enough to cause a person to die from smoking it, and the only way to die from eating it was from consuming the equivalent to 400 pounds in one hour.  For context, even water is more toxic.  Six 16 oz bottles of water in one hour will kill a human.  In addition, no one who has suffered from Cannabis Hyperemesis Syndrome, which sounds more similar to the effects of certain pesticides that can be used on cannabis as it grows, has ever died after experiencing the disorder.  And all of the children who were admitted to emergency rooms across the country for consuming their parents’ insufficiently hidden cannabis gummies have survived as well.  Dr. Eva Hoch, a psychologist in the psychiatry department of the University Hospital in Munich who has studied the toxicity of cannabis with relation to animal studies, said, “The lethal dose for cannabis is very, very high. It’s very unlikely that a human would ingest that much.”  For comparison, in the first six months of 2025, 45 people on Staten Island alone died from a drug overdose, primarily heroin and fentanyl, whether intentional or unintentional.  Reporting has shown that the hotspotting program implemented by the District Attorney’s Office is having a big impact as well.  

On August 15, 2025, a coalition of 12 licensed cannabis dispensaries—including Conbud, The Cannabis Place, and Housing Works Cannabis Co.—filed suit against the New York State Office of Cannabis Management (OCM). The lawsuit follows the agency’s abrupt July announcement that dispensary setbacks from schools must be measured from property lines, not front doors, putting at least 152 licensed shops at risk of relocation or license denial.

A Costly Regulatory Reversal

Plaintiffs argue that the rule change threatens to bankrupt operators who have already invested millions of dollars in compliant sites. According to court filings, eight of the 12 plaintiffs have collectively sunk more than $6.6 million into their locations. For many, forced relocation would mean financial ruin and potential closures.

Litigation and Negotiation

The dispensaries sought a temporary restraining order and injunction to block enforcement, but the court denied immediate relief. However, both sides requested a two-week delay in the preliminary hearing—now scheduled for September 12—to pursue settlement negotiations. Attorneys describe the case as potentially “a battle royale,” with wide-ranging implications for the state’s cannabis framework.

State Response and Industry Concerns

Governor Kathy Hochul’s administration has pledged a $15 million relief fund—offering up to $250,000 for license applicants impacted by the proximity rule—but the program excludes dispensaries already operational. Meanwhile, OCM has insisted no shops will be forced to move or denied renewals if paperwork is timely filed. Still, plaintiffs and industry advocates remain unconvinced, pointing to the scale of investment losses and uncertainty ahead.

Attorney Joshua Bauchner, Chair of the Cannabis, Hemp and Psychedelics Practice Group at Mandelbaum Barrett PC, put it bluntly: “Fifteen million dollars doesn’t fix a damn thing. It’s a Band-Aid on a head wound.”

What Comes Next

This lawsuit marks the first legal challenge to the school setback rule, but more may follow. With the legislature in recess until January, and hundreds of dispensary permits up for renewal in the meantime, settlement talks may be the only near-term path to relief. Attorneys caution that while courts often defer to regulatory agencies, ongoing negotiations signal that the state may be open to compromise.

The outcome of this case will shape not only the future of the 152 shops caught in the policy shift but also broader questions about regulatory stability, state accountability, and the economic survival of licensed operators in New York’s cannabis market.

This post from last year illustrates changes to the regulations that were proposed at that time.  These proposals were designed to increase community involvement in the siting and decisions around cannabis retail shops:

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New York’s Cannabis Control Board (“CCB”) amended its cannabis regulations to refine licensing criteria, adjust distance restrictions, and strengthen public convenience and advantage considerations. These amendments aim to promote economic development, ensure an orderly expansion of the market, and mitigate unintended consequences such as market oversaturation and inequitable access. The changes reflect New York’s commitment to fostering a balanced, competitive, and transparent cannabis industry while incorporating public and municipal input into the regulatory framework.

The amendments to Parts 118.1 and 119.4, introduced as part of Resolution No. 2025-09, were proposed on September 10, 2024, and published in the State Register on October 23, 2024, following Resolution No. 2024-96. After the public comment period closed on December 23, 2024, the New York Office of Cannabis Management (“OCM”) determined that further amendments were necessary, prompting the publication of a Notice of Revised Rulemaking in the State Register to allow for additional public comments before final adoption. Additional revisions include: a minimum set of distances within which a Public Convenience and Advantage (“PCA”) request is not available; prohibitions on PCA requests when more than one licensee is within restricted zone; limits on requests until existing dispensaries have had at least 9 months of operation; additional notification requirements to municipalities and affected licensees, and procedural requirements for the PCA request application.

Changes to Distance Requirements for Cannabis Dispensaries

A major focus of the amendments is the modification of distance restrictions between cannabis retail dispensaries, microbusinesses, and registered organizations. Previously, in municipalities with a population of 20,000 or more, dispensaries were required to be at least 1,000 feet apart, while in municipalities with fewer than 20,000 residents, the required distance was 2,000 feet. The amendments reduce these distances, making it easier for businesses to open dispensaries in high-demand areas. The new rules require a 500-foot minimum distance in municipalities with 20,000 or more residents and a 1,000-foot minimum distance in municipalities with fewer than 20,000 residents.

Dispensaries that fall within the 500 to 1,000-foot range in larger municipalities or the 1,000 to 2,000-foot range in smaller municipalities may still be approved under specific conditions. To qualify, applicants must demonstrate that the existing licensee in the area has been operational for at least nine months and that the new dispensary would promote public convenience and advantage. The goal of these distance modifications is to allow greater flexibility for cannabis businesses while ensuring controlled market growth that prevents excessive clustering of dispensaries in specific locations.

Stronger Criteria for Public Convenience and Advantage Waivers

The amendments introduce a more structured approach to evaluating waiver requests for distance restrictions under the PCA framework. Previously, PCA waivers were assessed on broad factors such as traffic impact and community need. The CCB now evaluates specific criteria to determine whether granting a waiver is justified.

Applications must demonstrate proximity to other dispensaries and whether there is a demonstrated economic demand for additional locations. The Board also considers geographic, infrastructural, or topographic barriers that could justify a waiver, such as highways, rivers, or other physical separations between locations. Other factors include consumer demand for more retail options, the presence of illicit cannabis dispensaries in the area, and whether granting a waiver would support economic and social equity goals. By focusing on these specific elements, the Board aims to ensure that new dispensary locations contribute positively to the local economy, consumer accessibility, and fair market competition.

Enhanced Notification and Public Input Requirements

To increase transparency and community involvement, the amendments establish a clearer notification and review process for PCA waiver requests. Before submitting an application, applicants must notify their local municipality or community board, which has 45 days to respond before the CCB considers the request. Additionally, applicants must inform existing licensees within the affected radius, allowing them to provide feedback on the proposed new location. Municipalities and affected licensees may submit responses directly to the CCB and have the opportunity to voice their concerns at public board meetings when PCA requests are reviewed.

This enhanced process ensures that local governments and current cannabis businesses have a stronger role in shaping the cannabis market. By requiring advance notification and a formal review period, the amendments help create a more balanced approach to dispensary approvals, giving municipalities and community boards a say in the development of the local cannabis industry.

Implications for Cannabis Businesses and Local Governments

For cannabis entrepreneurs, these regulatory changes create both new opportunities and additional challenges. The reduction of distance restrictions allows for greater flexibility in choosing locations, making it easier to enter competitive markets. However, the stricter PCA waiver requirements mean that applicants must provide comprehensive justifications for why a waiver should be granted. Businesses must present strong economic arguments, demonstrate community benefits, and account for potential objections from municipalities and other license holders.

For local governments, these amendments provide greater oversight and involvement in cannabis market expansion. By requiring advance notification and a 45-day response window, municipalities now have a stronger voice in deciding where dispensaries can be established. This increased regulatory involvement is expected to lead to a more strategic and thoughtful approach to cannabis business placement, avoiding oversaturation in some areas while ensuring that underserved regions receive adequate dispensary access.

Final Steps Before Implementation

These regulatory amendments take effect upon publication of a Notice of Adoption in the New York State Register, finalizing the changes and making them legally enforceable. Until then, cannabis businesses and stakeholders should closely monitor updates from the CCB and the OCM.

Prospective dispensary owners should review the updated regulations carefully to ensure compliance with new location and waiver rules. Engaging with local municipalities and community boards early in the application process can help assess potential concerns and build support for new dispensary locations. Additionally, preparing detailed justifications for PCA requests, including economic impact assessments and community benefit arguments, will be essential for navigating the new regulatory landscape.

Conclusion

The latest amendments to New York’s Public Convenience and Advantage regulations mark a significant shift in the state’s approach to cannabis licensing. By reducing distance restrictions, introducing stronger waiver criteria, and increasing municipal involvement, the CCB aims to create a more balanced and sustainable cannabis industry. These changes promote accessibility, economic growth, and fair competition while ensuring that local communities have a voice in the development of the cannabis market.

As the final adoption of these amendments approaches, business owners, municipalities, and community stakeholders should remain proactive in understanding how these new rules will shape the future of cannabis licensing in New York.

Mandelbaum Barrett PC’s Cannabis, Hemp & Psychedelics attorneys stand at the forefront of a dynamic and ever-evolving legal landscape. We possess a detailed understanding of laws associated with the production, sale, use, and regulation of a broad range of controlled substances — from cannabis and hemp to psychedelics.

Disclaimer:

The information provided in this post is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations frequently change, and the information may not reflect the most recent developments. If you require legal advice or assistance, please contact Joshua Bauchner or Natalie Diaz.

Banner Image: Cannabis dispensary. Image Credit – Cova Software