On November 21, 2022, the New York State Cannabis Control Board (the \u201cBoard\u201d) approved draft regulations under the Marihuana Regulation and Taxation Act (\u201cMRTA\u201d) that address, among other subjects, the scope of \u201cmunicipal rulemaking,\u201d or the authority retained by cities, counties, towns, and villages to enact \u201ctime, place, and manner\u201d restrictions on the operation of adult-use retail dispensaries and on-site consumption sites within their jurisdiction.<\/p>\n
Short of opting out from the marijuana retail market altogether, the MRTA permits municipalities to exercise control over the market by passing \u201clocal 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,\u201d so long as the law does not make the operation of such facilities \u201cunreasonably impracticable\u201d as determined by the Board.\u00a0 But while \u201ctime, place, and manner\u201d restrictions have a long history in First Amendment jurisprudence, see<\/em> City of Renton v. Playtime Theatres<\/em>, 475 U.S. 41, 46 (1986), what do they mean in the context of regulating the marijuana retail market? <\/p>\n New York\u2019s Office of Cannabis Management (\u201cOCM\u201d) 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.\u00a0 A few months later, the Board approved draft rules regarding municipal rulemaking, summarized below.<\/p>\n Preempted Regulations.<\/em><\/strong>\u00a0 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.\u00a0 The draft regulations further clarify that municipalities cannot impose fees on adult-use retail dispensaries or on-site consumption sites operating within their jurisdiction.<\/p>\n Traditional Zoning Regulations.<\/em><\/strong>\u00a0 The draft regulations carve out from the MRTA\u2019s preemption provision local laws regulating the retail marijuana business in historical districts, as well those relating to parking, traffic control, odor, and noise.\u00a0 Of course, all such zoning regulations must not make the operation of retail marijuana businesses unreasonably impracticable.<\/p>\n Hours of operation.<\/em><\/strong>\u00a0 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.\u00a0 Municipalities also retain authority to permit these establishments to operate in the early morning hours.<\/p>\n Notice and Comment Opportunity.<\/em><\/strong>\u00a0 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.\u00a0 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\u2019s record.<\/p>\n Distancing Requirements.<\/em><\/strong>\u00a0 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).\u00a0 Municipalities may regulate the distance between retail dispensary or on-site consumption sites and community facilities, such as public parks, libraries, etc.<\/em>, provided they do not require a distance greater than 500 feet.\u00a0 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.\u00a0 That said, any local law imposing greater distancing requirements between retail establishments is preempted.\u00a0 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.<\/p>\n Unreasonably Impracticable Determinations.<\/em><\/strong>\u00a0 As noted above, time, place, manner restrictions cannot make the operation of retail marijuana businesses unreasonably impracticable as determined by the Board.\u00a0 The draft rules offer guidance as to how that determination will be made.\u00a0 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.\u00a0 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.\u00a0 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\u2019s 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.<\/p>\n 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.\u00a0 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]<\/a>\u00a0 With additional guidance regarding the scope of their rulemaking authority, among other important details, municipalities may begin to re-evaluate their decisions in earnest.<\/p>\n Read the full draft regulations here.<\/a><\/p>\n