New York’s Cannabis Dispensary Rules Shift Leaves Business Owners in Limbo

New York’s Cannabis Dispensary Rules Shift Leaves Business Owners in Limbo

Nubia Ashley had spent three years navigating permits, regulations, and real estate to open her cannabis dispensary in New York. She was finally ready—until she received a sudden email from state regulators earlier this week. Despite previously approving her location in March, the state’s Office of Cannabis Management (OCM) informed her it had made a critical mistake: her dispensary is now deemed too close to a nearby school, based on a newly adopted measurement standard.

“I was this close to opening,” said Ashley, 37. “And then I get hit with this letter.”

Ashley is not alone. More than 150 dispensaries—many of them minority-owned and supported by New York’s social equity initiatives—have been affected by the abrupt rule change. The new interpretation requires measuring the legally mandated 500-foot distance from a school’s property line, not from the entrance, as had been the standard up to now.

Sudden Change, Widespread Fallout

The Office of Cannabis Management says the revision came after an internal legal review determined the agency had incorrectly applied the law. Felicia A.B. Reid, acting executive director of the agency, explained the change was “necessary to bring the office’s practices into full alignment with cannabis law.”

But for license holders, the timing couldn’t be worse. Many, like Ashley, have invested heavily in locations that were previously greenlit under the earlier rule. Some had already started construction, secured financing, or were days from opening. Now, they are being told they must relocate—or wait for the state legislature to possibly intervene.

“This wasn’t a minor technicality. It’s a massive policy shift,” said cannabis attorney Jason Klimek. “And it happened without adequate warning.”

Equity Promises in Jeopardy

The dispensary owners most affected are those prioritized under New York’s Cannabis Law for having past marijuana convictions—people the law was specifically designed to help. Many have already faced long delays, shifting policies, and limited access to funding.

Several of the impacted dispensaries, including Housing Works Cannabis (the state’s first licensed shop) and Budega NYC in Brooklyn, are already open. Others, like Nubia Ashley’s, were supported by a state-backed fund promoted by Governor Kathy Hochul but may now need to find entirely new storefronts—an increasingly difficult and costly task in cities like New York.

Landlords charge premium rates for compliant retail spaces, and fierce competition, combined with other zoning restrictions—like proximity to churches or other dispensaries—makes finding a new location a daunting challenge.

“We don’t have the upper hand in real estate,” said Britni Tantalo, president of the New York Cannabis Retail Association and owner of Flower City Dispensary. “To say, ‘just move’—it’s not that easy.”

Political Confusion and Calls for Action

Governor Hochul acknowledged the mistake stemmed from her predecessor’s administration and expressed support for changing the law to allow current locations to remain. But she stopped short of offering a clear timeline, while lawsuits are already brewing from affected owners.

Legislators like State Senator Liz Krueger, a key author of the original legalization bill, were blindsided. “I wrote the law,” she said, “and I’m not sure a mistake was made.” Assembly Leader Crystal Peoples-Stokes echoed the sentiment, emphasizing that regulators were given broad discretion to implement the law as needed.

While regulators have assured that open dispensaries can continue operations for now, and unopened ones may qualify for up to $250,000 in relocation grants, owners say it’s not enough.

Entrepreneurs Left in the Dark

Fernando Peña and Suzanne Furboter, who opened Late Bloomers NYC in Queens with state-backed support, said the sudden change has left them uncertain about their future. “It’s very, very uncertain,” said Furboter. “And I’m tired of living this way.”

Backed into a corner, many affected dispensary owners are now forced to choose between waiting for legislative clarity or uprooting their entire business plan.

“This isn’t just about a rule change,” Ashley said. “It’s about trust, livelihoods, and the promises this state made to people like me.”