New York Governor Kathy Hochul has assured that 89 licensed cannabis dispensaries in New York City, along with many others statewide, will not be forced to shut down despite a recent announcement from the state’s Office of Cannabis Management (OCM) indicating non-compliance with proximity rules.
OCM notified 152 cannabis businesses and license applicants statewide on Monday that they had not properly enforced the law regarding the operation of cannabis retail storefronts relative to school grounds and houses of worship.
The law, established in the 2021 Marijuana Regulation and Taxation Act, prohibits cannabis retail locations within 500 feet of school property lines and 200 feet of areas of worship.
The OCM’s previous method for measuring compliance involved assessing distance from entrance to entrance. However, following an internal review, they have now adopted a stricter measurement using a straight line from the dispensary’s main entrance to the nearest property line of a school.
This change has resulted in 44 retail applicants and 108 licensed businesses statewide being deemed out of compliance, placing many in a state of uncertainty as they await resolution or search for alternative locations.
Among those affected is Alto, a family-run dispensary located in Tribeca.
The Savocchi family, who opened Alto last Labor Day weekend, has been left blindsided due to a miscalculation of fewer than 20 feet that has put them out of compliance.
André Savocchi expressed disbelief upon receiving the notification during the late afternoon on a recent Monday, stating, “I couldn’t even believe what I was reading.”
His family had meticulously followed regulations, enduring the complexities of New York’s cannabis laws to transform a vacant bar into a sleek dispensary. Extensive renovations costing over $100,000 were undertaken, particularly with air conditioning due to a gas leak that necessitated conversion to electric.
Despite assurances from the OCM that their location was viable, the family now finds themselves in a painful waiting game regarding their business’s future.
Sandra Savocchi, the family matriarch, described how her family’s emotional turmoil continues, even in light of the state’s assurances.
The dispensary operates under a 12-year lease with a five-year extension option, and they have recently hired six non-family members to accommodate a growing customer base.
The notion of relocating appears daunting for the Savocchi family, given that many landlords remain hesitant to lease space to cannabis businesses due to federal mortgage restrictions.
Governor Hochul has remained firm in her commitment to support those impacted by the OCM’s miscalculation.
Her office issued a statement declaring that cannabis business owners will not be penalized for the OCM’s previous errors.
A spokesperson described the situation as one that has drawn Hochul’s fury and emphasized she is focused on mitigating harm to the small business owners who “have poured their heart and soul” into their dispensaries.
After being briefed on the issue, Hochul immediately directed her staff and the OCM to devise a resolution that minimizes the adverse effects on affected license holders.
In response to OCM’s oversight, the agency has assured that no renewal decisions will be made until the state legislature can consider potential fixes, which may only occur when the legislature reconvenes early next year.
The Savocchi family holds onto hope, having received positive feedback from OCM staff, indicating that the agency seeks to rectify the situation.
However, the uncertainty of the waiting period weighs heavily on them, with Sandra commenting, “Now, it’s torturous. A waiting game. You don’t know which way to go.”
OCM has stated that for license holders awaiting renewal during this limbo, they may operate using an expired license if they submit their renewal application on time and without significant deficiencies.
A relief program amounting to $15 million has also been created for applicants yet to open, providing up to $250,000 in financial assistance.
Though existing license holders will not benefit from the relief program, Hochul is resolute in ensuring they are not adversely affected by past OCM leadership blunders.
On a recent platform, when asked about the possibility of existing dispensaries being grandfathered into the law, Hochul expressed her inclination to support such an initiative.
“I’d like to do that. I don’t want them hurt. They’re part of our community already, they’re working hard,” she noted.
The OCM has not disclosed the names or locations of the impacted businesses but has stated that they will pursue legislative amendments to allow affected licensees to continue operating at their current locations.
However, the potential passage of such legislation ultimately rests with the state legislature, meaning that no guarantees can be made.
According to an advisory released by OCM, if the legislature fails to amend the law sufficiently, renewal applications for impacted businesses will have to be denied.
The significant uncertainty surrounding the situation has led Jeffrey Hoffman, a cannabis attorney with clients affected by the compliance crisis, to predict that the OCM and Cannabis Control Board are likely to face numerous lawsuits due to the miscalculation.
Hoffman explained that the OCM’s rapid response and admission of error indicate an effort to mitigate backlash from those affected.
As he pointed out, many cannabis entrepreneurs who have invested heavily in their businesses may find themselves facing dire consequences if the compliance issues aren’t resolved.
“Imagine being locked into a 10-year lease or worse, having bought a building at a location you can no longer use,” he added, highlighting the precarious situation many entrepreneurs find themselves amidst the uncertainties.
In summary, New York’s cannabis dispensaries are navigating an unexpected crisis brought on by misinterpretations of compliance law.
With the future of many businesses hanging in the balance, Governor Hochul and the OCM’s efforts to remedy the situation remain crucial in determining the viability of these establishments moving forward.
image source from：amny
