In a major legal win for New York cannabis licensees, Mandelbaum Barrett PC has secured a precedent-setting decision that strengthens the rights of businesses facing Office of Cannabis Management (OCM) enforcement actions.
The Case
In ROC It Out Wellness, LLC (Aug. 13, 2025), the OCM argued that respondents could not raise constitutional objections—such as due process violations or unlawful searches and seizures—within its administrative hearings. Instead, the agency claimed these arguments had to be brought in a costly Article 78 proceeding in New York State Supreme Court.
We challenged that position—and won. The Administrative Law Judge ruled that certain constitutional claims can be heard in OCM administrative proceedings. This allows businesses to defend themselves on all available grounds within the initial case, rather than being forced into serial litigation while potentially sealed and unable to operate to generate revenue to prosecute their rights.
Why This Matters for Cannabis Businesses
Before this ruling, OCM’s stance meant:
- Limited ability to defend against enforcement actions in real time.
- Higher legal costs to bring separate court proceedings.
- Increased risk of losing licenses or staying closed during drawn-out appeals.
Now, cannabis businesses can:
- Challenge unlawful OCM raids and seizures during the hearing itself.
- Preserve arguments on vague OCM guidance—including ever-changing regulations—for judicial review.
- Raise selective enforcement claims in the administrative record to protect appellate rights.
Statewide Impact Beyond Cannabis
This ruling applies not just to cannabis enforcement—it affects all New York State administrative hearings. Although non-binding, it establishes that state agencies should allow certain constitutional objections to be heard directly in administrative proceedings.
A True David vs. Goliath Victory
This ruling ensures fairer, more cost-effective defenses for small businesses and safeguards constitutional protections in the face of aggressive governmental overreach. It’s a game-changer for anyone navigating New York cannabis law or other regulated industries.
Read the full court order here.
