NewsIn March 2021, the New York State Legislature passed the Marihuana Regulation and Taxation Act (MRTA). MRTA created the state’s Cannabis Law and established administrative entities, including the Office of Cannabis Management (OCM) and the Cannabis Control Board (CCB), to regulate, control, and tax adult-use, medical, and hemp cannabis. MRTA allows adults 21 and older to cultivate, use, and possess marijuana in moderate amounts and created a scheme for businesses to apply for retail dispensary and on-site consumption licenses to sell marijuana products for consumption.
In deference to municipalities that were not as supportive of legalized marijuana as the New York State Legislature was, MRTA gave municipalities that did not wish to have dispensaries or on-site consumption businesses within their jurisdictions a nine-month window following its enactment to adopt a local law prohibiting such businesses within the municipality. Those cities and towns that did so could repeal their prohibition in the future, but those that did not opt out within the statutory window could not later prohibit such businesses.
Some municipalities that did not opt out seem to regret their decision. Recognizing the window within which they could do so has long since passed, these municipalities have adopted zoning regulations and ordinances that place tight controls on the development and operation of cannabis businesses within their jurisdictions.
But two recent advisory opinions from the OCM and a recent Suffolk County Supreme Court decision show that municipalities have limited options when restricting retail cannabis dispensaries through zoning. When read together, the opinions and decision require laws that regulate retail cannabis dispensaries to survive three levels of scrutiny in order to be valid.
A primer on key New York Cannabis Law provisions
Several key sections of New York’s Cannabis Law concern how municipalities regulate retail cannabis businesses’ operations.
Cannabis Law § 72 authorizes and governs the issuance of adult-use retail dispensary licenses, including limiting the number of licenses a person may hold and restricting license holders from also holding permits for cannabis cultivation, processing, or distribution. Additionally, Section 72 requires license holders to operate from physical premises that are accessible from street level on a public thoroughfare. It also restricts the licensing of cannabis businesses to those over 500 feet away from schools or over 200 feet away from houses of worship.
Cannabis Law § 131(2) preempts municipalities “from adopting any law, rule, ordinance, regulation or prohibition pertaining to the operation or licensure of registered organizations, adult-use cannabis licenses or cannabinoid hemp licenses” unless a municipality passed, before December 31, 2021, an opt-out law that complied with Cannabis Law § 131(1). However, Section 131(2) provides an exception to this preemption if local laws “governing the time, place and manner of the operation of licensed adult-use cannabis retail dispensaries and/or on-site consumption site” do not “make the operation of such licensed retail dispensaries or on-site consumption sites unreasonably impracticable as determined by the [(CCB)].”
The CCB provided in 9 NYCRR § 119.2(a) guidance about the permissible time, place, and manner restrictions municipalities can impose on licensed adult-use retail cannabis dispensaries. Those restrictions include:
- Retail hours of operation;
- Visual or architectural integrity of the building, if it is located within a historical district;
Parking; - Traffic control, such as pedestrian and vehicular traffic;
- Odor;
- Noise; and
- Distance requirements between a retail dispensary and a “public youth facility,” so long as the distance requirement is no greater than 500 feet from the retail dispensary.
The CCB tackled in 9 NYCRR § 119.5(a) the standard for which time, place, and manner restrictions will be deemed to be unreasonably impracticable. A municipality’s law, rule, or actions “shall [not] be effective [n]or enforceable if [it] otherwise impedes on duties and obligations of the [CCB],” violates New York’s Cannabis Law, “or discriminates against orfrustrates the registrant, licensee, or permittee’s ability to carry out the operation of such registration, license, or permit as issued by the [CCB].”
Finally, NYCRR § 119.1(b)(1) provides examples of laws, rules, or prohibitions that Cannabis Law § 131 preempts municipalities from adopting regarding the “operation, registration, licensure, or permitting of [an] adult-use cannabis license,” such as those imposing fees, giving additional benefits to a municipality, or “denying any right, privilege, permit, variance, or approval” to licensed businesses.
The three levels of scrutiny that local cannabis-related zoning ordinances must survive to be lawful
Two recent advisory opinions from the CCB and a decision from the Suffolk County Supreme Court demonstrate the limitations municipalities face in governing or restricting the operation of cannabis businesses when they did not opt out of allowing retail cannabis operators upon the enactment of MRTA.
Together, these limitations articulate three levels of scrutiny that municipalities’ zoning ordinances must survive to be valid.
First, there is the inquiry into preemption, which would invalidate a law or regulation preempted by MRTA. An example of such a law is a blanket prohibition on opening retail cannabis businesses within a municipality when the jurisdiction did not opt out of allowing cannabis businesses.
Second, the local zoning regulation must be a valid “time, place, or manner” regulation, as set forth in 9 NYCRR § 119.2(a). An ordinance that is not preempted by MRTA may not regulate the operations of a retail cannabis business beyond its time, place, or manner.
Finally, there is the “unreasonably impracticable” standard, which will invalidate any time, place, and manner restrictions that, per 9 NYCRR § 119.5(a), “impede[] on duties and obligations of the [CCB],” violate New York Cannabis Law, “or discriminate[] against or frustrate[]” an operator’s “ability to carry out the operation” of their business.
In Advisory Opinion 2025-01, two organizations sought advisory opinions as to whether the Town of Riverhead’s proposed and enacted zoning code provisions and its one-year moratorium on processing any building or land use permits for cannabis businesses were “unreasonably impracticable” under, and preempted by, the Cannabis Law. The zoning ordinances limited the zoning districts in which cannabis businesses could operate, restricted the number of businesses that could operate in certain approved districts, and established distance requirements from specific properties, such as schools, libraries, playgrounds, community centers, and houses of worship. Riverhead’s ordinances also required applicants to obtain an opinion letter from it stating whether the business’s proposed location complied with its Town Code.
The CCB concluded that Riverhead’s new provisions were unreasonably impracticable because they were not proper time, place, and manner restrictions. For example, one provision forbade the location of a dispensary within 1,000 feet of any school, library, or daycare facility—double the minimum distance requirement in the Cannabis Law of 500 feet between any school and any cannabis retail business, and with a broader scope of protected locations.
The CCB also found that Riverhead’s ordinances improperly overrode the CCB’s authority to set the terms of licensure by requiring cannabis applicants to receive a positive municipal opinion to apply for building and use permits, as Cannabis Law § 76 expressly treats municipal opinions as advisory and not determinative of an applicant’s ability to open their business. Finally, the CCB noted that the one-year moratorium on accepting permit applications was an unreasonably impracticable restriction.
Then, in Advisory Opinion 2025-02, two different organizations sought advisory opinions regarding the local zoning provisions of the Town of Southampton. Southampton had amended its zoning code to add “non-medical cannabis dispensary” as a category of a special exception use. Under Southampton’s zoning code, businesses deemed special exception uses were subject to additional conditions, including a special review process, before the town would issue a building permit. Southampton also limited the zoning district where cannabis dispensaries could operate.
The CCB found that Southampton had improperly applied its special use exception requirements to regulate cannabis businesses. The CCB ruled that those requirements were unreasonably impracticable because they limited cannabis businesses to two of Southampton’s eight business districts, which was not an enumerated time, place, or manner restriction under the Cannabis Law. The CCB found that many of the other restrictions for special use exceptions were unreasonably impracticable time, place, and manner restrictions, such as distance requirements from “community facilit[ies]”—a term that included organizations beyond those that the CCB’s regulations addressed—the prohibition of drive-thru windows at dispensaries, and signage and security requirements.
Finally, in 1086 OCR LLC v. Town of Riverhead Zoning Board of Appeals, one of the parties who sought Advisory Opinion 2025-01 from the CCB filed a hybrid Article 78 and declaratory judgment action in the Suffolk County Supreme Court regarding Riverhead’s ordinance requiring a 1000-foot distance between any cannabis retail business and any school, which was in excess of the 500-foot distance required by Cannabis Law § 72. The petitioners had a license to operate a dispensary at their location, which was in a zoning district that permitted retail cannabis dispensaries.
The court found that because state law and regulations had already addressed the distance requirement for cannabis businesses from schools, Riverhead’s zoning ordinances that increased this minimum distance were preempted. The court also found that Riverhead’s zoning code violated New York Town Law § 262 by applying zoning ordinances differently to cannabis businesses than to other businesses in the commercial district.
A legislative and regulatory restraint on local zoning of cannabis businesses
New York State’s cannabis regulatory scheme is still in its infancy. But the Cannabis Law and the CCB’s regulations make clear that municipalities that failed to opt out of MRTA cannot bar licensed cannabis businesses through zoning ordinances and regulations that are preempted by the Cannabis Law, that are not permitted time, place, and manner regulations, or that make operation of a retail cannabis business “unreasonably impracticable.”
Retail cannabis business operators who want to do business in a New York municipality that appears to be unduly restricting their operations through zoning ordinances should be aware that such regulations must survive three levels of scrutiny or they will be deemed invalid. They should also be mindful of the various administrative and judicial processes that are available to them to trigger a review of local zoning regulations to determine if they pass muster under New York State’s Cannabis Law and its implementing regulations.
Anthony S. Guardino is a partner with Farrell Fritz, P.C., practicing in the areas of land use, zoning and environmental law. He can be reached at aguardino@farrellfritz.com.
Reprinted with permission from the November 25, 2025 edition of The New York Law Journal © 2025 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.
