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When New York State passed the Marijuana Regulation and Taxation Act (MRTA) in 2021, entrepreneurs in the cannabis industry seized on the long-awaited opportunity to open retail cannabis shops on Long Island.
But even after the approval of hundreds of adult-use cannabis licenses across the state so far, only two dispensaries have opened on Long Island, and new dispensaries continue to face regulatory hurdles that can seem insurmountable, as the law comes with draconian restrictions on where and how cannabis can be sold.
MARCO SILVA: ‘It’s very difficult to find sites for retail dispensaries on Long Island; regulatory constraints are most often to blame.’
“It’s very difficult to find sites for retail dispensaries on Long Island,” says Marco Silva, a cannabis industry attorney at Harris Beach, PLLC. He says regulatory constraints are most often to blame.
New York State’s Office of Cannabis Management oversees the regulation of cannabis businesses on Long Island, and the restrictions they impose can be challenging to navigate.
“In addition to the dearth of available sites,” Silva explains, “there are several regulations impacting cannabis businesses on Long Island including the required Special Use Permit zoning process, the limited size of the allowable ‘green zone,’ and the setback requirements from other dispensaries.”
According to the MRTA, a retail dispensary cannot be within 1,000 feet of another cannabis retailer, or within 500 feet of a school grounds, or within 200 feet of a house of worship.
The law also permits local municipalities to opt-out of allowing cannabis retail businesses to operate altogether.
JASON A. LITTLE: ‘A good number of Long Island municipalities have opted-out, prohibiting the legal sale of cannabis from a licensed retail dispensary within those munic-ipalities.’
“A good number of Long Island municipalities have in fact opted-out, prohibiting the legal sale of cannabis from a licensed retail dispensary within those municipalities,” says Jason A. Little, cannabis practice group leader at Farrell Fritz in Hauppauge.
In fact, out of 13 Long Island towns, only four have opted-in for cannabis retail.
The fact that so few towns have decided to allow dispensaries has slowed their overall growth on Long Island, suggests Little. “Absent successful and timely appeals, Long Islanders within those opt-out municipalities cannot open a retail dispensary,” he says.
However, towns that have opted in often impose their own sets of restrictions, creating a more prohibitive environment for dispensaries.
“Even the municipalities who have opted-in have created yet unchallenged zoning and use ordinances meant to further restrict where retail cannabis dispensaries can operate,” says Little.
The validity of the stricter municipal ordinances could be challenged, suggests Kathleen Deegan Dickson, co-chair of the Cannabis Practice Group at Forchelli Deegan Terrana.
“Many of the opt-in municipalities have adopted regulations that further restrict locations within certain distances to residential neighborhoods, playgrounds, libraries and other uses,” Deegan Dickson says. “It remains to be seen whether these additional restrictions can withstand judicial scrutiny, as the MRTA specifically prohibits local municipalities from adopting anything other than ‘regulations governing the time, place and manner’ of retail sites, and only to the degree that it does not make it ‘unreasonably impracticable’ for the operation of licensed retail dispensaries.”
NICHOLAS TERZULLI: ‘Obtaining an adult use cannabis retail license from the Office of Cannabis Management is akin to winning the lottery.’
Burdensome restrictions from municipalities can often mean lengthy turnaround times on approvals for cannabis businesses as well. Nicholas Terzulli, senior counsel attorney in the Cannabis Law Group at Davidoff Hutcher & Citron, LLP, estimates the timeline from application to opening to be between 18 and 24 months for a typical dispensary.
“Some towns also require full or departmental site plan reviews of the proposed locations, adding months to the approval process,” says Terzulli. “This arduous local approval process is only part of the regulatory and legal gauntlet cannabis entrepreneurs must endure and navigate.”
Only the Cannabis Control Board is able to award nonprovisional retail licenses, explains Terzulli. But even for those who complete the meticulous application process, securing a license can feel impossible.
“Obtaining an adult use cannabis retail license from the Office of Cannabis Management is akin to winning the lottery,” Terzulli says. “Applications are reviewed in the order of the queue, and any deficiencies in the application have to be cured within 30 days.”
Addressing the myriad obstacles of opening a dispensary on Long Island, Deegan Dickson underscores the importance of comprehensive legal services to weed out problems for those that want to open a cannabis business.
KATHLEEN DEEGAN DICKSON: ‘Many of the opt-in municipalities have adopted regulations that further restrict locations within certain distances to residential neighbor-hoods, playgrounds, libraries and other uses.’
“Our cannabis practice group consists of attorneys with concentrations in real estate, zoning law, corporate law, tax law and employment law, all with a knowledge of the provisions of the MRTA and New York State regulations governing cannabis,” Deegan Dickson says. “This allows us to advise landlords, potential retail operators, growers, processors and investors in these businesses, to ensure they understand the risks involved, and the processes required, in applying for and operating a cannabis business.”
Silva says that partnering with a well-known and highly regarded law firm may benefit clients when interfacing with regulatory officials. “Our firm is a respected and recognized provider of quality legal services,” he says, “and when a cannabis operator arrives at a hearing or meeting with a Harris Beach lawyer, it helps eradicate some of the stigma associated with the industry.”
That stigma will likely diminish in the future, predicts Deegan Dickson, and broader acceptance of cannabis-related businesses into communities will follow.
“I expect that, as cannabis becomes more mainstream and normalized, many municipalities which have watched their neighboring communities reap the tax and employment benefits of permitting retail cannabis sales without any of the feared negative impacts, will choose to opt back in and permit these uses in their towns and villages,” she says.
“}]] When New York State passed the Marijuana Regulation and Taxation Act (MRTA) in 2021, entrepreneurs in the cannabis industry seized on the long-awaited opportunity to open retail cannabis shops on Long Island. Read More