BILL NUMBER: S8278
SPONSOR: COONEY
 
TITLE OF BILL:
An act to amend the cannabis law, in relation to proximity protection
and where licensed adult use dispensing facilities may be located
 
PURPOSE:
The purpose of this legislation is to establish a statutory framework
for considering requests to waive proximity protection for adult-use
cannabis retail dispensaries licensed pursuant to the Marijuana Regu-
lation and Taxation Act.
 
SUMMARY OF PROVISIONS:
Section 1: Amends section 85 of the Marijuana Regulation and Taxation
Act to establish guidelines for requests to the Office of Cannabis
Management and the Cannabis Control Board to waive the proximity
protection of an existing adult use retail licensee.
Section 2: Establishes the effective date.
 
JUSTIFICATION:
Under current Office of Cannabis Management (OCM) regulation, adult use
retail dispensary licensees are provided certain distance (proximity)
protections that shield them from the siting of new cannabis retail
dispensaries too close to their businesses. The reason for these regula-
tory protections is to help small businesses gain a foothold in the
cannabis marketplace. These protections also reflect the fact that New
York State remains far away from approaching saturation in the adult use
dispensary market, which means there is little need to establish dispen-
saries in close physical proximity to each other when so much of the
state remains unserved.
However, the protections provided in regulation can be-and have been-
waived by the OCM and the Cannabis Control Board (CCB) for almost any
reason. Indeed, recent actions by the OCM and the CCB have waived the
regulatory safeguards, allowing new dispensaries to open 70-80% closer
to an existing dispensary than the regulations provide. In doing so,
the OCM and the CCB provided no substantive rationale for their deci-
sions, leading to the filing of a lawsuit in early 2025 challenging
their actions.
In addition to being unsupported by facts, these decisions place canna-
bis adult use dispensary owners at significant economic peril. Approxi-
mately 80% of adult use dispensary owners are social equity licensees-
individuals who are largely under-capitalized and as such, in need of
outside investors to develop and operate their businesses. Actions by
the OCM and the CCB to grant proximity waivers without justification has
had the effect of drying up the capital investor market for these social
equity licensees, as investors question the profitability of such
investments when the state makes seemingly arbitrary decisions to allow
a competing store to be placed so close to an existing dispensary.
To provide social equity licensees with a fighting chance to open and
operate a profitable adult use cannabis dispensary, this legislation
would establish a legal framework for the OCM and the CCB to follow in
making decisions to waive a dispensary's proximity protection, includ-
ing:
*requiring notice to a licensee that is the subject of a waiver request,
and an opportunity to comment on it;
*requiring notice to the municipality involved in such waiver requests,
and an opportunity to comment on it;
*requiring the compiling and release of a quantitative analysis of the
request by the CCB, and that such analysis be made available to the
public;
*requiring a public hearing on the waiver request;
*requiring that the existing licensee and the municipality have an
opportunity to speak at the CCB meeting where a waiver decision will be
rendered;
*requiring an appeal process in cases where a waiver is granted;
*prohibiting the approval of proximity waivers when: an existing store
has illegal adult use dispensaries within the legal proximity distance;
the waiver would reduce the distance between dispensaries by more than
five percent; an existing dispensary has been operational for less than
three years; the proposed dispensary is larger than the existing dispen-
sary; and when a proximity waiver involving the existing licensee has
already been issued.
This legislation would also establish in law the proximity protection
distances that are currently in statute.
Collectively, these protections would allow the OCM and the CCB to
consider and act on requests for proximity protection waivers, but in a
manner that is based on quantifiable facts, provides for public input,
and utilizes a balanced process that assures that both applicants and
licenses may be heard before a decision is rendered. The provisions of
this legislation largely mirror the current process used by the Alcohol
Beverage and Control Board for certain proximity licensing decisions
under their jurisdiction.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S8278: 85 cannabis law, 85(12) cannabis law