[PRESS RELEASE] – NEW YORK, Jan. 10, 2025— Four Conditional Adult-Use Retail Dispensary (CAURD) licensees filed a lawsuit Jan. 9 against the Cannabis Control Board (CCB) and New York State Office of Cannabis Management (OCM). The lawsuit challenges the granting—without notice, analysis, public discussion or due process—of so-called Public Convenience Waivers of proximity protection regulations that violate the state’s 1,000-foot buffer rule between licensed dispensaries. The four CAURD licensees filing the lawsuit are L.O.R.D.S., Actualize Dispensary, Astro Management and R&R Remedies.
The lawsuit is the latest in more than a dozen lawsuits brought against the CCB and OCM alleging that they have overstepped their regulatory authority, damaging the nascent industry. At issue is a series of meetings at which the CCB issued six unannounced, secretly decided waivers undermining the legally guaranteed 1,000-foot protection rule, a regulation intended to protect small operators. This decision by the CCB—supported by its board Chairwoman Tremaine Wright—appears to undermine the CCB’s and OCM’s commitment to creating an equitable cannabis industry and following their own regulations.
“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, endangering its viability as a business when we are only weeks away from launching. It’s as though the rug were pulled from under us without notice or reason,” Astro Management CEO Jillian Dragutsky said. “It seems clear to me that the CCB has chosen arbitrarily to ignore the statutory requirements it is legally bound to follow when considering whether to approve an application for a Public Convenience Waiver for a particular location. This must stop; the cannabis laws, its rules and regulations issued by the state of New York, which the OCM and CCB are charged with following and enforcing, must be followed without any latitude.”
The lawsuit alleges the waivers harm New York’s CAURD licensing program, which was developed with the intent to be the nation’s leading equity-driven cannabis program, awarding the state’s first licenses to justice-involved individuals and other historically sidelined operators. Currently, 38 other New York CAURD licensees have signed affirmations of support for the lawsuit, including Conbud, Housing Works Cannabis Co, Terp Bros, Flowery Soho, Trends, Five Boroughs Cannabis, The Travel Agency Union Square and Alta Dispensary. Prominent associations such as the New York Cannabis Retail Association and the National Hispanic Cannabis Council have also lent their voice in support of the lawsuit.
“The CCB continues to act with capriciousness and in violation of its own proximity regulations,” said Osbert Orduña, CEO of The Cannabis Place dispensary and co-chair of the Service Disabled Veterans in Cannabis Association and the National Hispanic Cannabis Council’s tri-state chapter. “By arbitrarily issuing waivers, these governmental organizations are undermining the very communities they claim to be supporting. We are asking for the CCB and OCM to be true to their originally stated intention to provide opportunities for various classes of licensees.”
Before the first legal adult-use dispensary opened in New York, the government recognized the need to avoid clustering dispensaries and over-competition. The result was the 1,000-foot distance requirement between dispensaries, which ensures some stability for new stores while safeguarding public health. Maintaining distance between dispensaries has become even more vital to the industry’s success as illegal stores continue to run rampant throughout the state and customers are slow to transition to the legal market. Waivers of the requirement issued by the CCB were originally only intended for rare exceptions.
“Decisions recently made by the CCB to violate the proximity protection of several cannabis retailers can undermine the ability of those stores to survive,” said Britni Tantalo, president of the New York CAURD Retail Association (NYCRA). “The NYCRA isn’t opposed to a waiver process, but that process must have guardrails. Our hope is that this lawsuit will compel the CCB to establish concrete rules for waivers to proximity protection. That means rules that require a public process, fact-finding and input from the licensee whose proximity will be violated—along with a standard appeal process. Such rules already exist for alcohol, an effective model for the courts and the CCB to follow.”
The CAURD program was put in place in 2022 to create a more equitable cannabis market in New York and offer social equity applicants the chance to succeed after decades of systemic discrimination and over-policing. According to the lawsuit, by approving these new dispensary locations without regard for proximity regulations, the CCB and OCM appear to undermine their own rules and the principles of fairness that the CAURD program was designed to promote. This move not only raises significant legal concerns but also makes the path to success for CAURD licensees even harder to navigate in a market already fraught with obstacles.
CAURD applicants are frustrated with this process. “The chaotic rollout of the legal cannabis market and the CAURD program in New York State has been faced with uncertainty and small business owners like me are feeling the pain. By ignoring proximity protections and granting waivers without due process, communities will be oversaturated and CAURD operators will fail,” said Vaughn ‘BuddhaChef’ Jefferson, majority owner of L.O.R.D.S. LLC.
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