Key Takeaways
- The Second Department confirmed that Cannabis Law § 131(2) has significant preemptive effect over local cannabis regulation.
- The Court recognized the Legislature’s intent to occupy the field of operation of licensed adult-use retail dispensaries.
- Municipalities may not impose cannabis-specific school setback requirements that conflict with state law.
- The decision gives licensees and property owners a stronger basis to challenge local restrictions that interfere with state-approved dispensary locations.
- The ruling is likely to shape future litigation involving residential setbacks, dispensary-spacing requirements, corridor restrictions, moratoria and other cannabis-specific local laws.
The New York State Appellate Division, Second Department, has issued a significant decision addressing the scope of municipal authority to regulate adult-use cannabis dispensaries under New York’s Marijuana Regulation and Taxation Act and Cannabis Law. In Matter of 1086 OCR, LLC v. Town of Riverhead Zoning Board of Appeals, the Court held that a Riverhead zoning provision requiring cannabis dispensaries to be located at least 1,000 feet from a school was preempted by state law because New York’s Cannabis Law already establishes the applicable school-distance requirement and measurement methodology.
Most importantly, the Court stated that “the Legislature has expressly stated its intent to occupy the field of the operation of licensed adult-use cannabis retail dispensaries.” That language is expected to have significance well beyond Riverhead and will likely become an important reference point in future disputes involving cannabis-specific municipal zoning and siting restrictions.
Background
Riverhead adopted cannabis-specific zoning provisions governing where licensed adult-use retail dispensaries may be located within the Town. Among other restrictions, the Town required dispensaries to be located at least 1,000 feet from any school, measured from property line to property line. New York’s Cannabis Law, however, sets the minimum required distance between a licensed retail dispensary and school grounds at 500 feet and provides a statewide framework for licensure and siting determinations.
Harris Beach Murtha has represented Brian Stark Enterprises, LLC, and related parties in connection with the proposed Riverhead dispensary location since the inception of the matter. Working with co-counsel, the firm challenged the Town’s denial of local approvals and argued that Riverhead’s cannabis-specific school setback was preempted by state law.
The Supreme Court, Suffolk County, ruled in favor of the dispensary applicant and property owner. Riverhead appealed, and the Second Department has now affirmed the core preemption ruling as to the school setback.
The Second Department’s Decision
The Second Department held that Riverhead’s 1,000-foot school setback imposed additional restrictions on rights granted by state law and was therefore preempted. The Court reasoned the Cannabis Law expressly preempts municipalities from adopting local laws pertaining to the operation or licensure of adult-use cannabis businesses, subject only to a limited carve-out for local laws governing the time, place and manner of operation that do not make operations unreasonably impracticable.
The Court further held that the Legislature expressly intended to occupy the field of operation of licensed adult-use retail dispensaries. Because state law specifically establishes the school-distance requirement and how that distance is measured, Riverhead could not impose a different, more restrictive cannabis-specific setback requirement.
The Court did not reach every issue raised in the appeal. In particular, it declined to address broader disputes concerning the validity or effect of regulations adopted by the Cannabis Control Board and Office of Cannabis Management because the statutory preemption analysis was sufficient to resolve the school-setback issue.
Why the Decision Matters
The decision is one of the most important appellate rulings to date concerning the relationship between New York’s statewide cannabis regulatory framework and municipal land-use authority. While municipalities retain limited authority to regulate certain time, place and manner issues, the Second Department’s decision confirms local governments may not use cannabis-specific zoning provisions to impose additional restrictions that conflict with rights granted by state law.
For licensees, property owners, landlords, investors and lenders, the ruling provides important support for challenging local cannabis restrictions that go beyond the state’s licensing and siting framework. It also signals that courts may scrutinize municipal efforts to regulate licensed dispensaries through cannabis-specific land-use rules, particularly where those rules conflict with state law or interfere with state-approved locations.
For municipalities, the decision underscores the need to carefully evaluate cannabis-related zoning provisions against the express preemption language in Cannabis Law § 131(2) and the State’s comprehensive regulatory structure. Local governments that attempt to impose cannabis-specific restrictions beyond the limited authority preserved by statute may face legal challenges from licensees and property owners.
Harris Beach Murtha’s Cannabis Practice
Harris Beach Murtha’s Cannabis Industry Team advises licensees, applicants, investors, landlords, lenders and ancillary businesses on regulatory compliance, municipal approvals, transactions, financing, tax issues, litigation strategy and enforcement matters. The firm has been deeply involved in New York’s adult-use cannabis market and regularly counsels clients on the intersection of state cannabis regulation, local zoning and preemption.
Jason W. Klimek, a partner at Harris Beach Murtha and a co-leader of the firm’s Cannabis Industry Team, has represented Brian Stark Enterprises, LLC in this matter since its inception. Jason regularly advises clients on New York cannabis regulatory issues, corporate and tax structuring, licensing, municipal approvals and disputes involving the limits of local authority over state-licensed cannabis businesses. If you have questions or need assistance, please reach out to Jason at (585) 419-8646 and jklimek@harrisbeachmurtha.com, or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.