New York Lawmaker Introduces Legislative Fix to Grandfather in Dispensary Locations

A New York lawmaker introduced legislation on Aug. 4 to remedy dozens of noncompliant dispensaries that the Office of Cannabis Management (OCM) allowed to open too close to schools.

State Sen. Luis R. Sepúlveda, D-Bronx, filed Senate Bill S8469 in an attempt to amend New York’s cannabis law to exempt any adult-use dispensary that opened before July 28, 2025, from having to change locations based on a 500-foot school buffer zone.

In essence, the bill would grandfather in locations for 106 adult-use dispensaries—including 87 in New York City—that were approved in error by the OCM and are now impacted by the office’s proximity correction released on July 28.

Editor’s note: There are also two medical dispensaries, including PharmaCann and Etain, that are impacted by the OCM’s proximity correction, but the legislation is explicit to “adult-use” retail establishments. Cannabis Business Times reached out to Sepúlveda, asking if this was intentional.

The S8469 amendment states that:

“Any licensee for an adult-use retail dispensary whose initial license was approved by the office prior to July twenty-eighth, two thousand twenty-five, and whose business location was found at the time of such approval to be in compliance with standards used by the office at such time, regardless of such business location’s actual proximity to a school property line, shall be deemed compliant for the purposes of license renewal and continued operation at such location.”

The legislation stipulates that a licensee must be otherwise compliant and in good standing with the state to receive the special discretion.

The proposal comes after state cannabis regulators indicated they had misguided retail licensees based on erroneous entrance-to-entrance measurements they published in 2022 that conflicted with the Marijuana Regulation and Taxation Act (MRTA). Under the proximity correction released last week, the OCM is now measuring the 500-foot buffer zone from a dispensary entrance in a straight line to the nearest property line boundary of a school’s grounds.

State officials also announced on July 28 that the OCM is working with Gov. Kathy Hochul’s office and the Empire State Development to establish a $15 million relief fund for 44 pending applicants who now must change locations before receiving licensure. These applicants could access up to $250,000 each in coverage for the OCM’s miscue.

Despite the location fiasco unfolding on July 28, Cannabis Business Times subsequently learned that a lawyer had attempted to put the issue on OCM’s radar 16 months earlier.

RELATED: Lawyer Alerted New York Regulators of Noncompliant Dispensary Location in March 2024

Sepúlveda’s legislative fix was referred to the Senate Rules Committee. While New York lawmakers adjourned from their regular legislative session in June, the state’s full-time legislators can meet during a special session in the latter half of the year.

Both the OCM and Hochul indicated before Sepúlveda introduced S8469 that they supported allowing the open cannabis dispensaries to remain operational in their current locations.

“I don’t think it should be born on the backs of these people—so many of them, their life savings, they’re going to these businesses,” Hochul said during an interview with NY1’s Spectrum News. “They’ve worked hard to go through the lengthy process to be licensed and then to have a location.

“So, I have said we are going to stand up for them. These are entrepreneurs, they’re small business owners—many from communities of color—and this is their shot to have a chance to be successful. So, we’re not going to let anything happen to them. We’ll make them whole, and I have got to go back to the Legislature and get them persuaded to change the law.”

Hochul holds the keys to calling a special session. Some state lawmakers have urged the governor to do so to address the impacts of the federal tax and spending legislation signed by President Donald Trump last month.