New York social equity license winner denied store location for being too close to an MSO

One of the 463 social equity marijuana shop applicants in New York selected last year for a license has been turned down by cannabis regulators because the site she chose was within a 1,000 feet of a pre-existing medical dispensary in Manhattan. She now may become the first to formally appeal such a ruling to the state.

The license winner, Candice LoPizzo, won a conditional adult-use retail dispensary license last year and submitted a site application to the Office of Cannabis Management on Aug. 6. Her cannabis shop, dubbed Bud & Honey, was to be set up at 241 5th Ave. in New York City, according to an appeals notice letter sent by her lawyer to the Cannabis Control Board this week.

A lawsuit and court order froze all of the CAURD license processing from mid-August until the end of November, after which LoPizzo’s post-selection application was submitted to the OCM on Dec. 14.

A little over a month later, on Jan. 24, LoPizzo found out that the OCM had denied her chosen site because it was too close to a longstanding medical marijuana dispensary operated by Fiorello Pharmaceuticals, which in turn is owned by Chicago-based multistate operator Green Thumb Industries (CSE: GTII) (OTC: GTBIF).

Every legal cannabis shop in New York is required to be at least 1,000 feet from another such shop, the OCM told LoPizzo, but hers was only 650 feet from the GTI shop, which is located at 2 E. 30th Ave. in Manhattan.

LoPizzo filed the formal appeal and is now awaiting a decision by the CCB, hoping that the board will exercise some discretion and grant her a waiver on the required 1,000-foot buffer.

LoPizzo’s attorney, Duncan Delano, argued in the appeal filing that the Fiorello Pharmaceuticals shop, which does business under the retail brand RISE, is technically ineligible for the buffer protection because that specifically expired in December last year, just prior to when the RISE site was approved for recreational sales in January.

Bud and Honey complaint

Delano requested that the CCB either revoke recreational sales permission for the RISE location in favor of LoPizzo or grant her an exception so that both shops will be allowed to operate.

Delano also noted that the two locations are within 1,000 feet of each other only by drawing a straight line, but that any given customer traveling by foot would have to “traverse over 1,000 feet from one entrance to arrive at the next.”

LoPizzo and her husband already signed a lease for the Manhattan location and put down a nonrefundable deposit. Delano wrote in the appeal letter that “hefty rental payments” will start for the couple in February. He painted the situation as one of regulators favoring an MSO over a small social equity business and called it a “grave miscarriage of justice” that “runs antithetical” to OCM’s stated mission of prioritizing social equity in New York’s cannabis market.

“The OCM chose an MSO over a CAURD licensee despite the CAURD licensee being ahead of the MSO in the application process,” Delano wrote to Green Market Report in an email.

“I find it exasperating that the OCM will proudly boast about its social equity bona fides and achievements any chance it gets, and then they turn around and hurt the social equity applicants when the rubber meets the road like this. It’s disingenuous and nauseating for those of us fighting in the trenches,” Delano wrote. “We are not taking this lying down and intend to fight back.”

A spokesperson for the OCM declined to comment for this story.

A spokesperson for Green Thumb Industries did not immediately respond to a request for comment Wednesday.

It’s unclear how long the appeals process may take.

Even so, the CCB could still exercise discretion and let both shops open, Delano noted in his appeal letter.

“There are currently no other licensed adult-use dispensaries in the vicinity of (LoPizzo’s) location. The nearest open adult-use dispensary is Culture House, half a mile away. Clearly, the market is not saturated with regulated adult-use dispensaries,” Delano argued. “Instead, it is saturated with illegal ones, including at least five in the same neighborhood.”

Delano further argued that the RISE shop was not sufficient to meet market demand in its Manhattan neighborhood, and alleged that the “only logical explanation for such a deviation in the OCM’s mission must be that Applicant paid $2,000 in application fees, while RISE paid $175,000 in application fees and will pay a total of $20 million in licensing fees.”

“Let us also be crystal clear about the consequences of upholding the Denial: the OCM is choosing an MSO over a justice involved individual, and (LoPizzo) will lose (her) investment in the … location and be pushed to the back of the license review line,” Delano wrote.

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