New York pot shop-to-school distance mistake may force dozens to relocate

Dozens of New York recreational marijuana stores are in limbo after officials admitted a mistake. Regulators said they improperly measured the legally designated distance between some shops and schools.

Now, more than 100 cannabis shops may have to move if lawmakers don’t come up with a quick solution.

‘Utter failure of leadership’

One owner of a dispensary in the Big Apple told The Associated Press that they just recently received the news that their shop was too close to a nearby preschool.

“The way they executed this was a complete and utter failure of leadership,” dispensary owner Osbert Orduña told the AP.

Notices sent out

Shop owners were notified of the issue in a letter from the New York Office of Cannabis Management in July. In the letter, officials acknowledged they should have been measuring from the edge of the schools’ property line. Instead, they were measuring from the entrance of the schools to ensure they were in compliance with legal requirements that state pot shops must be at least 500 feet away from a school.

“To give you this news, and for the weight of it, I am incredibly sorry,” the notification from Felicia A.B. Reid, the acting executive director of the cannabis agency, reads.

A sizable portion of the state’s 450 cannabis dispensaries are now affected as a result of the error.

Impacted shops

Around 60 of the shops were reportedly issued licenses using the mistaken measurements, with most being in New York City. Forty more have licenses, but have yet to open. Fifty other businesses have also applied for permits under the erroneous measurements.

New York has created a fund for pot shops where applicants can be awarded up to $250,000 for relocation costs. However, dispensaries that are already open do not qualify for money for the fund, which totals $15 million, according to the Office of Cannabis Management.

The shops that were already open and impacted by the measurements were advised that they can remain in operation even with expired permits, so long as they submit an application for renewal.

Officials noted in a statement that businesses can receive “proof of a valid license or a letter of good standing to operate” by getting in touch with the cannabis office.

Hochul calls on lawmakers for a fix

Gov. Kathy Hochul, D-NY, has urged state legislators to come up with a permanent solution that will allow shops to remain at their current locations, but lawmakers are not scheduled to meet again until January. 

“These people have worked hard,” Hochul said. “They’ve waited a long time. They put their life savings into something that they thought was going to help them support their families. So, what I’ve 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.”

In the meantime, shop owners have to navigate through an uncertain future.

“How do you grow your business not knowing where you’re going to be a few months from now?” shop owner Jillian Dragutsky said to the AP. 

Issues before the measuring error

The improper measurements are just the latest snafu from New York’s legal marijuana program, which has been hampered by lawsuits, a rocky rollout and inefficiencies in the law that allowed illegal drug markets to grow. 

An internal audit of the agency last year revealed multiple issues, ranging from improperly trained management to changes in licensing rules. 

Even before this latest issue, state lawmakers had vowed to revamp the agency.

Recreational marijuana in New York was legalized for use in 2021, and licensed sales of weed were authorized in 2022. The state reported more than $1 billion in retail sales in 2024, which generated $80 million in state tax revenue.