July 2025 – Cannabis Industry

The New York Office of Cannabis Management (OCM) has issued a significant correction to its previous guidance on how to measure the required 500-foot distance between retail cannabis dispensaries and schools. This change has immediate and potentially wide-ranging implications for both pending applicants and currently licensed dispensaries across New York State.

Prior Guidance
OCM had long advised applicants that the 500-foot proximity restriction should be measured in a straight line from the center of the nearest school entrance to the center of the dispensary’s main entrance—only considering entrances regularly used by patrons. In addition, this rule applied only when the dispensary and school were located on the same street or road.

Updated Measurement Standard
OCM recently stated that this method was incorrect and inconsistent with Cannabis Law § 72(6) which states that “No cannabis retail licensee shall locate a storefront within five hundred feet of a school grounds as such term is defined in the New York Education Law or within two hundred feet of a house of worship.” Section § 409(2) of the Education Law defines “school grounds” as “any building, structure and surrounding outdoor grounds, including entrances or exits contained within a public or private pre-school, nursery school, elementary or secondary school’s legally defined property boundaries as registered in a county clerk’s office.”

Reading the two sections together, OCM has adopted a revised standard that requires the licensee to measure a straight line from the dispensary entrance to the nearest point on the school property line —regardless of whether they are on the same road. This new and broader interpretation significantly expands the areas considered off-limits.

Current Impact
According to the OCM, the revised guidance will affect the following applicants/licensees (subject to change upon further analysis) :
• 44 pending applicants whose proposed locations may now be noncompliant.
• 108 licensed dispensaries.

Over 80% of the affected parties are in New York City, while the remainder are spread across the rest of the State.

OCM Support for Applicants and Licensees

The applicants that don’t comply with the distance requirements must find new, compliant locations to proceed with their applicants.

To assist affected applicants, OCM and Empire State Development have created a $15 million Applicant Relief Program to help cover:

Costs of finding a new location.
Capital improvements made to the original (now non-compliant) location

Applicants may receive provisional licenses while they secure new locations.

Support for Licensees

For those affected licensed dispensaries, many of which already operating, the Governor’s Office and OCM are pursuing legislation to allow these businesses to remain at their current locations.

However, as there is the risk this legislation may not pass and OCM cannot renew licenses at locations that do not comply with the new interpretation of Cannabis Law § 72 (6), licensees will need a new compliant location before the Cannabis Control Board can finalize license renewal.

Discussions on SB 5 (Formerly SB 3) Began Today in Texas’ 89th Legislature 1st Special Session

Minutes before the June 22, 2025 deadline, Texas Governor Greg Abbott surprised many by vetoing Senate Bill 3—the proposed ban on all consumable hemp products containing THC.

The veto is a major victory for Texas’s booming hemp industry, estimated to be worth $5.5 billion. “Senate Bill 3 is well-intentioned,” Governor Abbott said, but the bill went too far, presenting “valid constitutional challenges.” He emphasized the need for legislation that can withstand legal scrutiny in his veto proclamation: “Allowing Senate Bill 3 to become law—knowing that it faces a lengthy battle that will render it dead on arrival in court—would hinder rather than help us solve the public safety issues this bill seeks to contain.” Governor Abbott acknowledged the many Texan businessowners that invest millions to responsibly grow, produce, and market safe products for adults. Noting that Texas needs to add regulations to ensure safety, Governor Abbott added SB 3 to the top of the Special Session’s agenda.

In response to the veto, Lieutenant Governor Dan Patrick, a supporter of SB 3, has not backed down from his stance against hemp products, accusing Governor Abbott of wanting to “legalize recreational marijuana” and signaling that he will push for a ban again during the Special Session. Senator Charles Perry, who authored SB 3 & SB 5, acknowledged that Governor Abbott “raised some legitimate concerns.” However, Senator Perry expressed optimism, saying he has “all the confidence in the world” that the Special Session will “alleviate and address [Abbott’s] concerns.”

Industry leaders, however, welcomed the veto. Heather Fazio, director of the Texas Cannabis Policy Center, called Abbott’s decision “a win for freedom and free markets” specifically because the hemp-derived products industry in Texas supports over 8,500 retailers and generates $3.5-8 billion annually. Jonathan Miller, general counsel for U.S. Hemp Roundtable, called the veto “a seminal moment for hemp farmers and businesses across the country.”

Texas’ Legislative Special Session started yesterdat and can last up to 30 days. During the Session, the legislators may only work on the governor’s agenda items. Fortunately for hemp businessowners and consumers, the legislators who fought against a total ban have a second bite of the apple.

Duane Morris LLP will continue to monitor and provide updates on the status of SB 5.