Four licensed cannabis retailers filed a lawsuit Thursday against New York state regulators, challenging recent approvals that allow some dispensaries to operate within 1,000 feet of existing stores — a move they say undermines recent state rules designed to prevent market saturation.
The Article 78 lawsuit, filed in New York Supreme Court by dispensary operators L.O.R.D.S., Actualize Dispensary, Astro Management and R&R Remedies, targets the Cannabis Control Board and Office of Cannabis Management over waivers granted to at least six dispensaries, according to court documents.
Two CCB resolutions from late 2024 approved new dispensary locations within protected buffer zones, including one just 522.9 feet from an existing store. The licensees argue these “Public Convenience and Advantage” (PCA) waivers were granted “without notice, analysis or due process.”
“It’s as though the rug were pulled from under us without notice or reason,” Jillian Dragutsky, CEO of Astro Management, said in an emailed statement. Her company was weeks from launching when a waiver was granted for a nearby competitor.
“The Public Convenience Waiver recently issued by the CCB to an applicant seeking to open a dispensary in a location less than 1,000 feet from Astro Management’s already proximity protected location has put our company in an untenable position,” Dragutsky said.
The state’s buffer rule was established to prevent clustering of dispensaries and provide market stability for new businesses. But the lawsuit claims the CCB improperly waived these protections by citing “public convenience” without proper analysis or evidence.
During Thursday’s CCB meeting, several dispensary owners voiced strong opposition to the waivers.
“If a certain store was completely sold out of all our products, I could understand the need for additional locations, but we’re nowhere near that point,” said Vanessa Yee-Chan, owner of Alta Dispensary, during public comments.
Another licensee, Berkay Sebat, co-owner of Flowery Soho, criticized the lack of transparency around the waiver process. He cited particular concern about a waiver granted to multistate operator Curaleaf near his location.
“We don’t know how they’re being given out, what data and what decisions are being made,” he told the board.
Sebat, who operates his CAURD-licensed dispensary adjacent to Alta Dispensary, warned that the board’s approach to waivers would only trigger more legal challenges.
“The CCB, in particular, and OCM go through so many lawsuits and just lose every single time because they keep making decisions like this,” he said during public comments yesterday. “I guarantee you with the amount of PCAs that are being given out to these multibillion dollar companies, you’re going to get Article 78, you’re going to go to court, there’s going to be another injunction.”
He urged regulators to establish clear standards through regular legislative channels rather than what he characterized as arbitrary decisions.
“I really don’t think you need a Curaleaf between me and Vanessa’s store — they’re a billion-dollar company,” Sebat said. “If it was another small business, that could be kind of understood. But that is not a small business. They’re just here to wipe us out.”
Leading up
The buffer rule has been contentious since its implementation, with the argument that location protection has led to other nearby applicants getting disqualified in the process.
Gracious Greens LLC, a service-disabled veteran-owned business, sued regulators in March after one of its proposed locations was disqualified when proximity protection was granted to a competitor within 600 feet of their site.
Thirty-eight other CAURD licensees have signed affirmations supporting the legal challenge, including Yee-Chan and Sebat’s stores, as well as prominent retailers like Housing Works Cannabis Co. Industry groups, such as the New York Cannabis Retail Association and National Hispanic Cannabis Council, have also backed the lawsuit.
“The CCB continues to act with capriciousness and in violation of its own proximity regulations,” Osbert Orduña, CEO of The Cannabis Place dispensary and co-chair of the National Hispanic Cannabis Council’s Tri-State Chapter, said in a statement.
Britni Tantalo, president of the New York CAURD Retail Association, said that the group isn’t opposed to waivers but wants “concrete rules” requiring public input and appeal processes, similar to alcohol licensing.
Adding to the in-fighting tension is the most recent push by established operators to prevent review of thousands of applications and “slam the doors behind themselves,” according to Beck Hickey, owner of Zen + Leaf, a Hudson Valley cannabis-friendly boutique hotel with an onsite retail store. The board approved just 31 new licenses across various categories on Thursday, citing an existing court injunction and holiday scheduling for the reduced volume.
The latest lawsuit seeks to overturn the waiver approvals and restore proximity protections for the affected dispensaries.
“By ignoring proximity protections and granting waivers without due process, communities will be oversaturated and CAURD operators will fail,” Vaughn Jefferson, the majority owner of L.O.R.D.S. LLC, one of the plaintiffs, said in a statement.
This article originally appeared in Green Market Report.
