State Regulators Allow 152 Dispensaries to Continue Operating After Major Distance Measurement Error

New York cannabis dispensaries located too close to schools can remain open despite violating state law, regulators announced this summer. The decision affects 152 licensed dispensaries across the state after officials discovered they had been measuring required distances incorrectly for months.

This regulatory misstep has created a complex situation that pits child safety concerns against business interests and social equity goals. We’re witnessing how even well-intentioned laws can stumble during implementation, leaving communities to navigate the aftermath.

The Heart of the Problem

New York’s Office of Cannabis Management (OCM) made a critical error that has far-reaching consequences. State law requires cannabis dispensaries to stay at least 500 feet from school property lines and 200 feet from churches. However, OCM staff measured these distances from school entrances rather than property boundaries.

This mistake wasn’t small. It affected 152 dispensaries statewide, with 89 located in New York City alone. Of these, 60 dispensaries are already serving customers, while the rest are in various stages of development.

“I am incredibly sorry,” said Acting Executive Director Felicia Reid, acknowledging the agency’s error during a recent public meeting. The miscalculation was discovered during an internal review ordered by Governor Kathy Hochul.

Real People, Real Consequences

Behind these numbers are real business owners facing potential financial ruin. Many invested their life savings into these ventures, often after receiving licenses through social equity programs designed to help communities harmed by past marijuana criminalization.

Coss Marte, who owns a Manhattan dispensary, captured the emotional toll perfectly: “I just feel like I was heading toward generational wealth and now I’m heading toward generational debt.” His story reflects that of dozens of entrepreneurs who followed state guidance, only to learn they might need to relocate.

The financial stakes are enormous. Some dispensary owners pay $40,000 monthly in rent and have signed long-term leases. Relocation costs could easily exceed hundreds of thousands of dollars per business, especially in New York’s competitive real estate market.

Community Voices Ring Out

Parents and school officials haven’t stayed silent. They argue that the 500-foot buffer exists for good reason: to protect children from exposure to cannabis marketing and normalize the idea that marijuana use is just another retail option.

“Five hundred feet was supposed to protect students. And they didn’t take it seriously,” said Jennifer Desena, North Hempstead Town Supervisor. Her frustration reflects broader community concerns about implementing cannabis legalization responsibly.

School administrators worry about sending mixed messages to students. They’ve spent years educating young people about the risks of underage cannabis use. Having dispensaries visible from school grounds, they argue, undermines these prevention efforts.

However, dispensary owners counter that their businesses operate professionally and don’t target minors. They point to strict regulations governing advertising, security, and age verification that already exist in the industry.

The State Scrambles for Solutions

Governor Hochul has thrown her support behind affected businesses. She’s advocating for legislative fixes that would “grandfather in” dispensaries approved under the previous interpretation of the distance rule.

The proposed solution comes in two parts. First, the state established a $15 million relief fund offering up to $250,000 per business for those that must relocate. Second, lawmakers introduced Senate Bill S8469, which would allow noncompliant dispensaries to remain at their current locations if they were approved before July 28, 2025.

State Senator Luis Sepúlveda, who sponsored the bill, argues that penalizing businesses for the government’s mistake would be fundamentally unfair. “These entrepreneurs followed the rules as they understood them,” he said. “We can’t punish them for our errors.”

Lessons from Other States

New York isn’t the first state to grapple with cannabis dispensary proximity issues. Colorado, one of the early legalization pioneers, required 1,000-foot buffers from schools but enforced them strictly from the beginning. Their proactive approach avoided New York’s current predicament.

California takes a decentralized approach, letting local governments set their own rules. Some cities require 600 to 1,000-foot buffers, while others have reduced distances based on community input and available real estate.

Oregon has shown flexibility, allowing communities to adjust buffer zones based on local needs. Portland, for example, reduced buffer zones in certain areas to accommodate high demand for retail spaces while maintaining public safety goals.

These examples suggest that clear, consistent enforcement from day one prevents the chaos New York now faces. They also show that communities can adapt regulations based on real-world experience and local conditions.

The Social Equity Stakes

The proximity issue carries special significance for social equity. Many affected dispensaries received licenses through programs prioritizing people from communities disproportionately harmed by marijuana prohibition. These entrepreneurs, often people of color with past cannabis convictions, were supposed to benefit from legalization.

Forcing them to relocate could undermine these social justice goals. State Senator Liz Krueger, who sponsored New York’s legalization bill, called the situation a “government-invented crisis” that threatens to derail equity efforts.

The irony is painful. Programs designed to repair historical injustices could end up creating new ones if affected business owners lose their investments due to regulatory mistakes.

Looking Ahead: What Comes Next

The legislative solution faces an uncertain path. While Governor Hochul supports grandfathering in existing dispensaries, some lawmakers worry about setting precedents that weaken zoning protections around schools.

The proposed $15 million relief fund, while substantial, may not cover all relocation costs. Real estate prices in New York City and other high-demand areas could quickly exhaust available funds, leaving some businesses without adequate support.

Community input will likely shape the final outcome. Public hearings and local government meetings will provide forums for parents, business owners, and other stakeholders to voice their concerns and preferences.

Finding Common Ground

This situation demands balanced solutions that respect both child safety and business investment. We need approaches that acknowledge the government’s error while maintaining reasonable protections for schools.

One path forward involves strengthening oversight of existing dispensaries near schools. Enhanced compliance monitoring, stricter advertising restrictions, and community engagement could address safety concerns without forcing costly relocations.

Another option includes phased transitions. Dispensaries could continue operating while working toward compliance over reasonable timeframes, supported by state assistance and flexible regulations.

The Bigger Picture

New York’s cannabis proximity crisis reflects broader challenges in implementing complex policy changes. Even well-intentioned regulations can stumble during rollout, creating unintended consequences for communities and businesses.

The situation also highlights the importance of precision in regulatory language and measurement. Small differences in interpretation can have massive real-world impacts, as we’ve seen with the school distance requirements.

Moving forward, we need better systems for catching errors early and more flexible mechanisms for addressing them when they occur. Rigid enforcement of flawed initial implementations helps no one.

Your Voice Matters

This issue affects more than just dispensary owners and school communities. It touches on fundamental questions about how we implement new policies, support small businesses, and balance competing community interests.

We encourage you to engage with this process. Attend local government meetings, contact your state representatives, and participate in public hearings about cannabis regulations. Your input can help shape solutions that work for everyone.

The decisions made in coming months will set precedents for how New York handles similar regulatory challenges in the future. Let’s make sure those precedents reflect our values of fairness, community input, and practical problem-solving.

What do you think about allowing these dispensaries to remain near schools? How should we balance child safety concerns with business interests and social equity goals? Share your thoughts in the comments below and help shape this important conversation.