NY Proximity Dispute Litigation Delayed | Cannabis Law Report | Where to order Skittles Moonrock online

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Date: September 2, 2025Attorney: Joshua S. Bauchner

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 thefuture 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.

NY Proximity Dispute Litigation Delayed