Cannabis applicant sues Riverhead again, challenging town code’s minimum distance between dispensaries

A new lawsuit over Riverhead’s cannabis zoning code is now pending in Suffolk Supreme Court, this one taking aim at the town’s 2,500-foot separation requirement between retail cannabis dispensaries and alleging town officials have delayed one state-licensed applicant while advancing another nearby proposal.

The case was filed last month by 1086 OCR LLC and related petitioners, who are seeking approvals for a retail cannabis dispensary at 1086 Old Country Road. The petitioners contend Riverhead has improperly relied on the town’s local cannabis zoning rules to hold up their application, even after a prior court ruling invalidated the town’s 1,000-foot setback from school property.

That earlier ruling, later reviewed by the Appellate Division, concerned Riverhead’s attempt to impose a 1,000-foot school setback, where state cannabis regulations require 500 feet. The courts ruled the town could not impose a more restrictive local school-distance rule. But the courts did not decide the separate question of whether Riverhead may require cannabis dispensaries to be at least 2,500 feet from one another.

The new lawsuit squarely raises that issue.

The petitioners argue the 2,500-foot separation requirement conflicts with state cannabis law and regulations and has been applied in a way that disadvantages their Old Country Road location. They also allege the town has treated their application differently from a nearby proposal involving Large Leaf at 840 Old Country Road, a site associated in court filings with Peter Moutafis.

Riverhead, in answering papers filed last week, denies the petitioners’ central claims and argues the case is not ripe for court review. The town says neither the 1086 Old Country Road proposal nor the 840 Old Country Road proposal has received all required municipal approvals. The town also argues the petitioners should have sought relief from the zoning board before going to court.

While Riverhead argues in court that the dispute is premature because neither proposal has all required town approvals, town boards have continued taking action on the 840 Old Country Road site. The Planning Board granted final site plan approval for the Large Leaf/Moutafis proposal on Aug. 20, and the Town Board held a Sept. 1 public hearing on a proposed sewer district extension to serve the property.

The town maintains its 2,500-foot separation rule is a valid exercise of local zoning authority. Its attorneys argue the rule addresses local land-use concerns and does not conflict with state cannabis regulations.

The litigation took on added urgency last week after the petitioners’ attorney, Martha Reichert, filed an emergency letter with the court advising Justice George Nolan that Riverhead had asked the Appellate Division to reconsider its July 29 decision in the earlier 1086 OCR case. In a motion filed Aug. 28, the town seeks reargument and, if reargument is granted, reversal of the trial court order in its entirety. Alternatively, the town seeks permission to appeal to the Court of Appeals and asks for a stay while the motion and any further appeal are pending. The motion is returnable Sept. 21.

Reichert argued the town’s appellate motion reinforces the need for a preliminary injunction in the new case, saying the town should not be allowed to delay the 1086 Old Country Road application while allowing the 840 Old Country Road proposal to move forward.

Attorneys for both Riverhead and Large Leaf responded by asking the court to disregard Reichert’s emergency letter. Riverhead’s attorney argued the letter was procedurally improper, while Large Leaf’s attorney said the town’s appellate filing had no bearing on Large Leaf’s business.

The case was reassigned to Justice Nolan after Justice James Hudson Hensley recused himself. A court appearance is scheduled for Sept. 10.