Two newly opened legal cannabis dispensaries in Chelsea are raising concerns about the enforcement of New York’s proximity regulations, which are meant to prevent shops from opening too close to one another.

What we know:

Legal cannabis shops in New York are supposed to be at least 1,000 feet apart, according to the state’s Office of Cannabis Management. However, the owner of Chelsea Cannabis Co., which opened Friday, says a competitor, New Amsterdam Cannabis Dispensary, opened just 700 feet away—a possible violation of state rules.

Dan Morena, founder of Chelsea Cannabis Co., says he spent over a year assuring investors that his store would be protected from nearby competition. Now, he and other dispensary owners, including Housing Works, are suing the OCM, demanding that the agency enforce its own rules.

The other side:

Some argue that allowing dispensaries to operate closer together promotes healthy competition, which benefits consumers by encouraging better pricing and customer service. Others worry that too many shops in one area could oversaturate the market, making it harder for small businesses to survive.

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Tom Hayden, general manager of New Amsterdam Cannabis Dispensary, says he welcomes competition and believes customer experience will be key.

“We don’t want to push any product, we want people to come in and shop comfortably,” Hayden said.

The backstory:

The legal cannabis market in New York has been slow to roll out, with many businesses facing significant bureaucratic delays. At the same time, illegal weed shops have flourished, openly operating without proper licenses. Now, as more legal dispensaries finally open, business owners are demanding that the state follow its own licensing and zoning regulations.