Following the landmark DNP-Z, Inc. v. New York State Cannabis Control Board decision on April 14, 2025, a second New York Supreme Court case reached the same conclusion. On April 25, 2025, in Rosedale Cannabis Dispensary, LLC v. New York State Cannabis Control Board et al. (Index No. 909951-24), the Albany County Supreme Court ruled that the New York State Cannabis Control Board (CCB) and Office of Cannabis Management (OCM) again violated the State Administrative Procedure Act (SAPA) when denying an adult-use retail dispensary license based on the May 2024 “Supplemental Policy Guidance.”
Key Points from Rosedale
In Rosedale, the Albany County Supreme Court once again determined that the “one license per true party of interest” restriction applied by OCM constitutes a “rule” under SAPA and therefore required formal rulemaking, including notice and public comment. The petitioners, Elena Eshaghpour and Rosedale Cannabis Dispensary, had submitted two license applications for separate locations during the October 2023 application window. While one application was approved, the second was denied solely based on the unpromulgated May 2024 Supplemental Policy Guidance.
The court found the guidance established a binding, across-the-board restriction without providing the agencies with any discretion to consider individual facts and circumstances. As in DNP-Z, the court held that the agencies’ failure to follow SAPA’s rulemaking requirements rendered the restriction unlawful. The denial of Rosedale’s second license was annulled, and the application was remanded to OCM for reconsideration in accordance with the statute and any validly promulgated rules.
What This Means for Licensees and Applicants
This second decision sends a clear message: courts are uniformly holding that OCM must comply with SAPA’s requirements before enforcing binding license limitations. Key takeaways include:
- Applicants previously denied under the May 2024 guidance may have a strong legal basis to challenge or reopen their applications.
- While OCM retains authority under Cannabis Law §§ 10(2), 10(16), and 64 to limit license issuance, it must do so through proper regulatory rulemaking.
- Companies with shared ownership or overlapping interests should continue to monitor regulatory developments and consult legal counsel on their licensing strategies.
We expect that CCB and OCM will consider initiating a formal rulemaking process to address ownership and licensing limitations, or they may appeal these decisions.
We are closely monitoring developments and will provide further updates as they occur.
