On November 21, 2022, the New York State Cannabis Control Board (the “Board”) approved draft regulations under the Marihuana Regulation and Taxation Act (“MRTA”) that address, among other subjects, the scope of “municipal rulemaking,” or the authority retained by cities, counties, towns, and villages to enact “time, place, and manner” restrictions on the operation of adult-use retail dispensaries and on-site consumption sites within their jurisdiction.
Short of opting out from the marijuana retail market altogether, the MRTA permits municipalities to exercise control over the market by passing “local laws and regulations governing the time, place and manner of the operation of licensed adult-use cannabis retail dispensaries and/or on-site consumption site,” so long as the law does not make the operation of such facilities “unreasonably impracticable” as determined by the Board. But while “time, place, and manner” restrictions have a long history in First Amendment jurisprudence, see City of Renton v. Playtime Theatres, 475 U.S. 41, 46 (1986), what do they mean in the context of regulating the marijuana retail market?
New York’s Office of Cannabis Management (“OCM”) began to answer the question on July 20, 2022, when it issued a directive to municipalities concerning local laws relating to the cannabis industry and sought additional input from municipalities through a survey. A few months later, the Board approved draft rules regarding municipal rulemaking, summarized below.
Preempted Regulations. The draft regulations begin by reaffirming that the MRTA preempts any local law pertaining to the operation or registration, licensure, or permitting of a registered organization, adult-use cannabis license or cannabinoid hemp license. The draft regulations further clarify that municipalities cannot impose fees on adult-use retail dispensaries or on-site consumption sites operating within their jurisdiction.
Traditional Zoning Regulations. The draft regulations carve out from the MRTA’s preemption provision local laws regulating the retail marijuana business in historical districts, as well those relating to parking, traffic control, odor, and noise. Of course, all such zoning regulations must not make the operation of retail marijuana businesses unreasonably impracticable.
Hours of operation. Municipalities are permitted to regulate the hours of operation for retail dispensaries and on-site consumption sites, so long as the municipality does not restrict operations to less than 70 hours per week. Municipalities also retain authority to permit these establishments to operate in the early morning hours.
Notice and Comment Opportunity. The MRTA obligates applicants for licensure as a retail dispensary or on-site consumption site to notify the municipality in which it intends to operate. The draft regulations clarify that the municipality is given 30 days from the receipt of this notification to express an opinion for or against the granting of the application, which opinion becomes part of the applicant’s record.
Distancing Requirements. The draft regulations also set baseline distancing requirements between retail dispensaries and on-site consumption sites and houses of worship (no less than 200 feet), or schools (no less than 500 feet). Municipalities may regulate the distance between retail dispensary or on-site consumption sites and community facilities, such as public parks, libraries, etc., provided they do not require a distance greater than 500 feet. Last, the draft regulations provide that no license will be granted to a marijuana retail establishment located within a 1,000-foot radius of another such establishment for larger municipalities with a population of more than 20,000, and within a 2,000-foot radius for smaller municipalities with a population of 20,000 or less. That said, any local law imposing greater distancing requirements between retail establishments is preempted. And significantly, the Board reserves the right to issue a license to an establishment located within a 2,000-foot radius of an existing licensed establishment if it finds doing so is in the public interest.
Unreasonably Impracticable Determinations. As noted above, time, place, manner restrictions cannot make the operation of retail marijuana businesses unreasonably impracticable as determined by the Board. The draft rules offer guidance as to how that determination will be made. First, upon receipt of a claim that a local law or regulation renders the operation of a retail marijuana business unreasonably impracticable, the Board may conduct a review and issue an advisory opinion. It appears that any determination from the Board shall be addressed in a license application where such application will be affected by the local law. In the event the Board concludes that the local law is unreasonably impracticable: (1) where the law has been adopted, the claimant can use the advisory opinion as prima facie evidence of the Board’s opinion that the local law violates the MRTA section 131(2), or (2) where the law has not been adopted, the advisory opinion purports to preempt the local law.
Before formal adoption, the draft regulations are subject to a 60-day public comment period upon publication in the State Register, which occurred on December 14, 2022. It has been reported that many municipalities opted out from the retail cannabis market because of lack of guidance from the OCM and the tight deadline they had to make a decision.[1] With additional guidance regarding the scope of their rulemaking authority, among other important details, municipalities may begin to re-evaluate their decisions in earnest.
Read the full draft regulations here.
[1] Conall Smith, Why some municipalities are opting out of marijuana sales and on-site consumption, ABC News 10 (Dec. 8, 2021), https://www.news10.com/top-stories/why-some-municipalities-are-opting-out-of-marijuana-sales-and-on-site-consumption/. According to the Rockefeller Institute of Government, as of December 3, 2022, of the 1,518 municipalities in New York State, 655 opted out of retail establishments and 751 opted out of on-site consumption.