A new lawsuit is asking a State Supreme Court judge to invalidate another part of Riverhead’s cannabis zoning code, less than two weeks after an appeals court ruled the town’s 1,000-foot setback from schools is preempted by state law.
The new lawsuit, filed Aug. 5 by 1086 OCR LLC, Brian Stark Enterprises LLC and Brian Stark, directly challenges a Riverhead Town Code provision requiring at least 2,500 feet between cannabis retail dispensaries.
State regulations generally require 1,000 feet between retail dispensaries in municipalities the size of Riverhead.
The same plaintiffs successfully challenged the town’s school setback in litigation decided last year by Supreme Court Justice Paul Hensley and affirmed July 29 by the Appellate Division, Second Department.
Their attorney, Martha Reichert of the Riverhead law firm Twomey Latham, is again arguing that state cannabis law preempts a local restriction that interferes with rights granted under New York’s cannabis licensing system.
The new case centers on competing state-approved dispensary locations at 1086 Old Country Road and 840 Old Country Road. The two sites are about 1,845 feet apart, according to a map filed with the lawsuit.
Brian Stark Enterprises holds a state adult-use retail dispensary license for the 1086 Old Country Road location. Large Leaf 618 LLC has state approval for a dispensary at 840 Old Country Road.
The lawsuit names the Town of Riverhead, the Town Board, the town Planning Department and several town officials as defendants. It also names as defendants Large Leaf 618 LLC, Keshav 840 LLC, Peter Moutafis, Moutafis Motors Ltd., the state Office of Cannabis Management and the Cannabis Control Board.
Riverhead’s code mandating at least 2,500 feet between retail cannabis locations was at issue in another cannabis zoning lawsuit decided by the Appellate Division last month, but the appeals court did not decide whether the 2,500-foot restriction is preempted by state cannabis law.
In that case, brought by Tink & E. Co. Inc., the Supreme Court had ruled the 2,500-foot restriction preempted. The Appellate Division ultimately found Tink was not entitled to operate a dispensary at its proposed Ostrander Avenue location for other zoning reasons. As a result, the court found Tink’s challenge to the 2,500-foot rule academic and expressly declined to decide its validity.
That left the issue open.
In the separate 1086 OCR case decided the same day, the Appellate Division affirmed Hensley’s ruling that Riverhead’s 1,000-foot school setback was preempted by state law.
The appeals court said the State Legislature, through Cannabis Law Section 131, had expressly stated its intent to occupy the field of operation of licensed adult-use cannabis retail dispensaries. It concluded Riverhead’s school setback imposed additional restrictions on rights granted by state law.
The new lawsuit argues that the same preemption principles should be applied to Riverhead’s 2,500-foot rule.
The complaint also raises a separate dispute over the town’s handling of 1086 OCR’s building and use permit applications.
The plaintiffs say they submitted updated applications for the 1086 Old Country Road site in October 2025, after the trial court ruled they did not need a variance from the school setback. They allege the town failed to calculate a permit fee, identify deficiencies in the application or issue a final determination.
They contend the town should not be permitted to allow a later dispensary application within the same 2,500-foot radius to move ahead while their earlier application remains unresolved.
The plaintiffs say they are not claiming that filing first automatically gives them an exclusive right to operate. Rather, they argue the town cannot use delays associated with enforcement of a zoning restriction later found to be illegal to place their application at a disadvantage.
“We put in our building application much sooner [than the owners of the Large Leaf site]…and we were stayed,” Reichert said in an interview last month. “I don’t think that the point of the Supreme Court stay was so that Riverhead could allow another dispensary to bump out Brian Stark’s dispensary,” she said.
The lawsuit seeks a declaration that the 2,500-foot spacing requirement is preempted to the extent it interferes with state-approved cannabis locations and the state’s dispensary proximity rules.
It also seeks an order requiring Riverhead to process the applications for 1086 Old Country Road and make a final, reviewable determination.
The town and the other defendants have not yet answered the allegations.
The case is pending in State Supreme Court in Suffolk County.
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