New York’s three-year-old recreational marijuana licensing system has been thrown into disarray after officials admitted a fundamental error in how they measure the legally mandated distance between cannabis dispensaries and schools.
For years, the state had been using a simple door-to-door measurement, but it has now emerged that they misread the law, which requires the 500-foot (152-metre) buffer to be measured from the edge of a school’s property line.
This startling admission, made by the Office of Cannabis Management last month, has plunged approximately 100 cannabis shops into uncertainty, leaving them to await a legislative fix or face potential relocation.
Osbert Orduña, who owns The Cannabis Place in New York City, now deemed too close to a nearby preschool, described the news as like dropping "a grenade in the laps" of business owners.
He added: "The way that they executed this was a complete and utter failure in leadership."
The blunder represents the latest setback for New York’s struggling legal marijuana programme.
The initiative has been consistently hampered by legal challenges, a sluggish rollout, and significant regulatory gaps that have inadvertently allowed an illicit market to flourish across the state.
Businesses now face an anxious wait as authorities grapple with the implications of their misinterpretation.
“To give you this news, and for the weight of it, I am incredibly sorry,” said Felicia A.B. Reid, acting executive director of the cannabis agency, said in notices to the businesses.
The error impacts a sizable share of the state’s roughly 450 cannabis dispensaries.
About 60 of those were licensed using the erroneous measurement system, mostly in New York City, plus around another 40 that have licenses but are yet to open their doors.
On top of that, there are almost 50 other businesses that have applied for licenses under the incorrect measurement system and are awaiting final approval from the agency.
The state has set aside a pot of money where applicants can get up to $250,000 to help relocate.
The existing shops have been told they can remain open for now, and even continue to operate with their expired licenses as long as the businesses file an application for a renewal.
Regulators say they are urging state lawmakers to create a permanent fix that will allow the shops to stay put. But they have also noted that is not guaranteed.
The state Legislature isn’t scheduled to sit again until January.
Meanwhile, business owners say they're being forced to operate in a gray area.
Jillian Dragutsky, who opened a dispensary called Yerba Buena in Brooklyn a few months ago, worries the issue still jeopardises a dispensary’s ability to bank, get insurance and purchase inventory since they are supposed to have valid licenses in place.
“How do you grow your business not knowing where you’re going to be a few months from now?” Dragutsky said.
In a statement, the cannabis office said businesses can obtain “proof of a valid license or a letter of good standing to operate” by contacting the agency.
An internal review of the cannabis office released last year detailed numerous problems at the agency, including inexperienced management and shifting licensure rules, while state leaders promised an administrative overhaul.
Gov. Kathy Hochul, who has previously said the program has been a “disaster,” called the school proximity problem “a major screw up” and vowed to find a legislative fix.
“These people have worked hard. They’ve waited a long time. They put their life savings into something that they thought was going to help them support their families,” she said.
“So what I’m been doing is first of all reassuring them that you’re going to be OK. Secondly, we need to get the law changed to have a fix.”
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