Harlem Business Group Sues NY Over Planned Cannabis Dispensary

The group had already voiced concerns last year as regulators were teeing the rollout.

The 125th Street Business District Management Association, a prominent Harlem business coalition, filed a lawsuit on Wednesday against New York’s cannabis regulators, contesting the state’s plan to establish a recreational marijuana dispensary along the main artery of the neighborhood.

The legal action, filed in the State Supreme Court of Manhattan, asserts that the shop would intensify existing public health issues that the block already struggles with. The proposed dispensary site, also known as Martin Luther King Jr. Boulevard, is near the Apollo Theater, a facility for homeless youth, and an office dealing with suspended students.

The suit, which seeks to block the dispensary, additionally divulged that the property’s landlord is also leasing space to an illicit dispensary nearby on Lenox Avenue that has been associated with recent instances of homicide, shootings, and unlawful drug deals.

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The business association, which represents 154 businesses, insists it does not oppose cannabis legalization but believes the planned dispensary would create a public health hazard due to the “well-documented spillover effects of cannabis dispensaries that include violent crime, property crimes, pedestrian congestion, and cannabis marketing.”

Barbara Askins, the head of the group, criticized the state’s strategy, telling New York Times this week that the community is already burdened with various challenges and scant resources. The lawsuit identifies the Dormitory Authority of the State of New York, the New York Office of Cannabis Management, its executive director, and 246 West LLC as defendants in the case.

In response to the lawsuit, Jeffrey Gordon, a representative for DASNY, stated that the agency solely assesses the proposed location, not the other tenants of the property owner. Yet, industry experts have labeled the situation a major issue and a potential conflict of interest.

The lawsuit filed by the 125th Street group implies that the state could have circumvented the problem by better explaining its decisions and addressing local apprehensions. It also accuses state officials of contravening their own regulations, since the proposed site is less than 500 feet from schools and community centers.

It is the latest issue facing New York’s efforts to establish a licensed, legal marijuana market, which has been plagued by the emergence of hundreds of unlicensed shops selling local and counterfeit cannabis en masse.

Pleas to the Governor

The move to sue underlines the growing discontent among communities who feel sidelined from the program’s planning stages. Several local officials, including a state assembly member and the district manager of the community board, expressed shock this week at the plans for the site, but the same 125th Street group had already voiced concerns as regulators were preparing the rollout.

In 2022, officials announced that a location in Harlem would become the state’s first licensed retail dispensary. However, the approval process was delayed due to local protests, resulting in the first dispensary opening in Greenwich Village instead.

A December letter addressed to Governor Kathy Hochul saw the association argue against the proposed shop. They cited fears that the dispensary could contribute to increased crime rates in the neighborhood. The group urged Hochul to reconsider the site’s approval after state officials disclosed plans for the shop in the week leading up to the memo, revealing that the lease for the one-story storefront across from the famed theater had already been signed.

The December complaint maintained that the presence of a marijuana retail store would undermine the efforts of a multi-agency task force, established by NYC Mayor Eric Adams, to improve public safety in the neighborhood. Additionally, it suggested that the dispensary could attract drug dealers currently selling illegal drugs in the area and potentially increase low-level crime and sanitation issues.

“This dispensary will not only derail the progress that we have made, it will also set us back in several areas,” Askins wrote in the letter to the governor at that time.”

Askins further stated that she was unaware of any studies linking the presence of marijuana shops to a rise in crime in the other states where the drug has been legalized for recreational use, though she believed that dealers who are already selling illegal drugs along the 125th Street corridor could potentially gather outside the dispensary and solicit to customers as potential buyers.

Daniel Blumenstein, the attorney representing the association, told NYT that the group had a meeting with Stacy Lynch, the governor’s top aide, in March. However, authorities provided neither an explanation for their choice nor any details about future plans.

“We were stonewalled,” he said.

According to the NYPD statistics, crime rates have slightly increased in 2022 in the Central Harlem precinct, which includes the site of the proposed dispensary, and much of the 125th Street corridor, with burglaries and larcenies leading the categories.

While the effect of legal marijuana on crime rates is still being studied in other states, a 2019 study from CUNY’s John Jay College showed that streets near cannabis dispensaries in Denver did see “significantly higher” levels of property crime.

Still, advocates of legalizing marijuana argue that such businesses can benefit neighborhoods by creating job opportunities and generating tax revenue.

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Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

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