New York’s cannabis market has grown rapidly since adult-use retail licenses were first issued. Yet, in many parts of the state, local zoning rules are creating roadblocks that go beyond what state law allows. On Long Island especially, municipalities have adopted restrictive measures that some licensees say make it nearly impossible to open a dispensary.
Recent guidance from the New York Office of Cannabis Management (OCM) is changing that landscape. In June 2025, OCM clarified what counts as “unreasonably impracticable” under the Cannabis Control Board’s regulations and established a process for licensees to obtain opinion letters challenging local rules. Those opinion letters, carrying the weight of the state’s interpretation, may become central evidence in lawsuits challenging municipal codes.
At Seligson Law, our team of legal advocates represent cannabis businesses across New York navigating the state’s fast-changing legal landscape. Led by attorney Kenneth Seligson, we have seen firsthand how local zoning ordinances can make or break a licensed operator’s ability to open their doors.
The Long Island Test Case
With more than 450 retail storefronts now open across New York, just seven operate on Long Island. That disparity is partly due to the fact that most Long Island towns opted out of allowing dispensaries. But even in the four towns that opted in—Babylon, Brookhaven, Riverhead, and Southampton—local codes imposed stricter rules than state law. These include:
- Distance requirements greater than the state’s 500-foot limit.
- Additional restrictions near places of worship and residences.
- Narrow zoning that relegates dispensaries to fringe business districts.
Licensees in Southampton have already filed claims, alleging the town’s zoning scheme unlawfully discriminates against cannabis businesses by confining them to areas off main commercial corridors. Others are challenging Brookhaven’s one-mile buffer between dispensaries, which is significantly greater than the state’s limit for towns of its size.
Licensees Take a Stand
Two Southampton business owners, Joe Lustberg, co-owner of Mottz Green Grocer, and Marq Hayes, co-owner of Brown Buddha, are among the first to formally challenge their town’s rules. Both say Southampton’s zoning codes unfairly push dispensaries to the outskirts, where few other retailers are required to operate.
Here are the main reasons they argue the rules are “unreasonably impracticable”:
- Rezoning After Investment – Lustberg signed a lease in a permitted zone, invested hundreds of thousands of dollars in rent, application fees, and construction, only to see the town rezone his property out of compliance. “It’s clear as day,” he said. “They’re discriminating against us.”
- Financial Strain from Delays – Hayes has paid rent since August of last year and invested more than $1.8 million while waiting for local approval of his site plan and special use permit. He believes officials are deliberately slow-walking the process: “They’ve been trying to bleed me out.”
- Unequal Treatment Compared to Other Retailers – Both business owners point out that dispensaries are excluded from prime commercial districts where other retail businesses, including liquor stores, are allowed. This exclusion, they argue, unfairly targets cannabis businesses.
Despite these hurdles, both Lustberg and Hayes plan to continue their challenges in court. Hayes put it bluntly: “At the end of the day, I’m suing the town.”
Courts are already weighing in. In July, a New York court ruled that state law preempted certain cannabis regulations in Riverhead. That case, still on appeal, underscores the tension between state authority and local control, a tension that lawsuits on Long Island and beyond will soon test further.
Why These Cases Matter
The outcome of these lawsuits will shape the future of New York’s cannabis industry. If local governments are allowed to enforce rules stricter than state law, licensees starting their cannabis businesses in New York may continue facing costly delays, zoning roadblocks, and uncertainty about whether their businesses will ever open.
On the other hand, successful challenges could force municipalities to align their codes with state regulations, opening the door for more dispensaries across the state.
For licensees, the risks are significant:
- Lost investment from paying rent or construction costs on locations that later become unusable.
- Delays in opening that drain resources and create competitive disadvantages.
- Legal uncertainty that makes it difficult to attract investors or secure financing.
How Cannabis Attorneys in New York Can Help
This is where experienced cannabis attorneys become critical. Our seasoned cannabis attorneys at Seligson Law can help licensees:
- Evaluate Local Rules: Determine whether a municipality’s zoning or distance requirements may qualify as “unreasonably impracticable” under state law.
- Request OCM Opinion Letters: Guide clients through the formal process of obtaining an opinion letter that can serve as strong evidence in a legal challenge.
- Pursue Litigation When Necessary: Represent licensees in lawsuits against municipalities that overstep their authority, leveraging both state law and OCM guidance.
- Protect Investments: Help clients avoid costly missteps, safeguard their leases, and develop proactive strategies to keep projects on track.
Navigating New York’s Cannabis Landscape
At Seligson Law, we are closely following these developments and advising licensees on how to navigate this uncertain environment. The interplay between state cannabis law and municipal zoning is rapidly evolving, and staying proactive is essential.
If you are a licensee struggling with restrictive local codes, or considering legal action to protect your investment, our team has extensive experience to help you evaluate your options and chart a path forward.Contact us today at 213-293-6692 to schedule a consultation with attorney Kenneth Seligson.
