Opinion

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

--------------------------------X

BROWN BUDDA NEW YORK, LLC,

Plaintiff, MEMORANDUM & ORDER

25-CV-5053(JS)(ARL)

-against-

TOWN OF SOUTHAMPTON; NEW YORK

STATE OFFICE OF CANNABIS

MANAGEMENT (OCM), as a “necessary

party,”

Defendants.

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APPEARANCES

For Plaintiff: Christian Killoran, Esq.

Killoran Law PC

P.O. Box 918

Remsenburg, New York 11960

For Defendant

Town of

Southampton: Brian S. Sokoloff, Esq.

Vincent Edward Ferry, Esq.

Sokoloff Stern LLP

179 Westbury Avenue

Carle Place, New York 11514

For Defendant

New York State

Office of Cannabis

Management (OCM): Tashi Topgyal Lhewa, Esq.

New York Office of the Attorney General

300 Motor Parkway, Suite 230

Hauppauge, New York 11788

SEYBERT, District Judge:

Presently before the Court is a motion to amend the

Amended Complaint pursuant to Federal Rule of Civil Procedure 15(a)

(“Motion”) filed by Plaintiff Brown Budda New York, LLC

(“Plaintiff”). (See Motion, ECF No. 28.) In relevant part,

Plaintiff’s proposed second amended complaint (“PSAC”) alleges

Defendant Town of Southampton (“Town”): (1) unlawfully violated

Plaintiff’s right to equal protection under the Fourteenth

Amendment to the Constitution and 42 U.S.C. § 1983 (“Section

1983)”; and (2) conspired with another local cannabis dispensary

to restrain economic activity in the Town to Plaintiff’s detriment

in violation of the Donnelly Act, N.Y. GEN. BUS. LAW § 340 (“Donnelly

Act”). (See generally PSAC, ECF No. 28-2.) The Town opposed

Plaintiff’s Motion. (See Opp’n, ECF No. 32.) For the reasons

stated herein, Plaintiff’s Motion is DENIED in its entirety,

without prejudice to renew.

BACKGROUND

I. The Amended Complaint1

A. New York State Cannabis Law

In or about March 2021, the New York state (“State”)

legislature enacted the Marijuana Regulation and Taxation Act

1 The following facts are drawn from Plaintiff’s Amended Complaint

(unless otherwise stated) and are accepted as true to the extent

necessary to resolve the instant Motion.

(“Cannabis Law”). (See Am. Compl., ECF No. 9, ¶ 1); N.Y. CANBS.

LAW §§ 1, et seq. The Cannabis Law was enacted to “regulate,

control and tax” the sale of marijuana2 within the State while

investing in the communities and people disproportionately

impacted by the criminalization of cannabis. (Am. Compl. ¶ 3.)

Thus, the Cannabis Law sought to remedy the “historical inequities

suffered” by marijuana users, particularly, “New York State’s

African American (Black) populace.” (Id. ¶ 4.)

To advance the intended purpose of the Cannabis Law, the

State established the Office of Cannabis Management (“OCM”) and

the Cannabis Control Board to promulgate regulations and to issue

licenses to applicants required for their sale and distribution of

marijuana within the State. (See id. ¶¶ 6-8.) Under the Cannabis

Law, only State-licensed cannabis “dispensaries” are permitted to

sell adult-use or recreational marijuana. (Id. ¶ 9.) The Cannabis

Law also precludes local municipalities from “hindering” the

lawful operation of State-licensed dispensaries. (Id. ¶¶ 10-14);

see also N.Y. CANBS. LAW § 127.

When enacted, the Cannabis Law allowed municipalities,

like the Town, to opt-out of allowing adult-use cannabis retailers

and on-site cannabis consumption sites within their jurisdictions.

(See Am. Compl. ¶¶ 12-14); see also N.Y. CANBS. LAW § 131. To

2 The Court refers to “marijuana” and “cannabis” interchangeably

throughout this Memorandum and Order.

opt-out, municipalities were required to enact laws prohibiting

such cannabis-related establishments within their jurisdiction by

no later than December 31, 2021. See id. Thus, municipalities

which did not opt-out by the December 31, 2021, deadline must

permit State-licensed dispensaries to sell and distribute cannabis

within their jurisdictions in accordance with the Cannabis Law.

(See Am. Compl. ¶¶ 12-14.) Municipalities that declined to

opt-out may only implement local laws and regulations restricting

the time, place, and manner of such cannabis dispensaries’

operations, so long as the laws do not make the dispensaries’

operation “unreasonably impracticable.” (See id. ¶ 12); N.Y.

CANBS. LAW § 131. Here, the Town did not timely opt-out in

accordance with the Cannabis Law. (See Am. Compl. ¶ 37.)

B. Plaintiff Sought to Open a Cannabis Dispensary

in the Town

According to public record, Plaintiff, “Brown Budda New

York LLC,” (originally formed as “Keep it 100 LLC” (“Plaintiff’s

Predecessor”) (see id. ¶ 15)) is a limited liability company

organized under the laws of New York state.3 In September 2022,

Plaintiff applied to the State to operate as a “marijuana

distributor,” and sought to offer retail, delivery, and on-site

3 Plaintiff failed to provide this information in the Amended

Complaint or PSAC. (See id., in toto; see also PSAC, in toto.) The

Court also notes that neither the Amended Complaint nor PSAC

alleges the citizenship of Plaintiff’s LLC member(s).

cannabis consumption services. (Id. ¶¶ 16, 22.) On November 17,

2022, Plaintiff’s Predecessor was issued a provisional,

Conditional Adult-Use Retail Dispensary (“CAURD”) license which

was later transferred to Plaintiff in September 2023. (See

id. ¶ 17.) The CAURD license was designed to expedite Plaintiff’s

market entry and insulate it from “burdensome and/or redundant

local municipal approvals and requirements.” (Id. ¶ 18.) But on

April 11, 2023, after Plaintiff applied for a license to operate

within the Town, the Town legislated local Town Code (“Town Code”)

Section 330-162.26, which mandated that any non-medical cannabis

dispensary receive a “special use permit” prior to operating.

(Id. ¶¶ 20, 44.) Section 330-162.26 details various requirements

necessary to obtain a special use permit, including but not limited

to, additional discretionary requirements which may be imposed by

the Town’s Planning Board. See SOUTHAMPTON, N.Y., CODE § 330-162.26

(2023).

On June 14, 2024, the State fully licensed Plaintiff to

operate as a cannabis dispensary, and Plaintiff sought to offer

both retail and delivery services. (Id. ¶¶ 21, 35—38.) At the

time, Plaintiff was only the fourth dispensary on Long Island to

obtain this license, and there were no dispensaries operating in

the Town. (See id. ¶¶ 39—40.) Thus, Plaintiff sought to

capitalize on being a “first to market” business. (Id. ¶ 41.)

But Plaintiff could not do so because the Town required Plaintiff

to first obtain a special use permit. (See id. ¶ 42.)

The Town’s imposition of a special use permit

requirement on Plaintiff constituted a “deliberate and unlawful”

application of local zoning law, and thus, precluded Plaintiff

from operating, despite Plaintiff being fully authorized to do so

under State law. (Id. ¶¶ 26-28.) The Town’s conduct not only

violated State law but also “discriminat[ed] against a

minority-owned/equity-priority business.”4 (Id. ¶ 30.) Even if

the Town’s special use permit requirement was a permissible time,

place, or manner restriction, it still violated the Cannabis Law

because it hindered Plaintiff’s delivery service which is

unrelated to “retail sales” or “on-site consumption.” (Id. ¶¶ 32,

49 (internal quotation marks omitted).)

On October 6, 2025, OCM issued an advisory opinion

finding certain Town zoning requirements applicable to adult-use

cannabis dispensaries unreasonably impracticable and preempted by

the Cannabis Law (“October 6 Advisory”). (See id. ¶¶ 71-75.)

Despite this, the Town insisted Plaintiff obtain both “site-plan”

approval pursuant to Town Code Section 330-182 and “special

exception” approval pursuant to Section 330-162.26. (Id. ¶ 47.)

4 Neither the Complaint nor the PSAC includes information about

Plaintiff’s owners or members, apart from noting Marquis Hayes is

an African American man and Plaintiff’s “managing member”,

“largest shareholder”, and “CEO.” (Id. ¶¶ 15 n.2, 118.)

When Plaintiff failed to secure these approvals, the Town informed

Plaintiff “no commercial activity may be conducted at the subject

premises . . . until [] site-plan approval is obtained.”

(Id. ¶ 48.)

Plaintiff maintains the conditions required by the Town

to secure a special use permit either directly conflict with, or

are made redundant by, the conditions required by the State. (See

id. ¶ 52.) Moreover, the Town’s requirements are not supported by

“substantial evidence” and are instead motivated by “unspoken

animus” and “nimbyism” against the cannabis industry and

Plaintiff’s business. (Id. ¶¶ 53, 56.) Indeed, as of the filing

of this action, five “license applicants[5] have applied to

operate” within the Town, but the Town had not approved any such

applications. (Id. ¶ 58.)

As a result of the Town’s conduct, Plaintiff has been

“unable to operate” since receiving its license from the State.

(Id. ¶ 61.) Because Plaintiff could not lawfully operate, it lost

inventory, profits, and access to private investment funding, as

well as incurred legal, “engineering”, rent, “building”, and other

administrative fees and costs to comply with the Town’s demands.

(Id. ¶¶ 62-69.) Plaintiff also lost the benefit of being a “‘first

to market’ business on Long Island.” (Id.) Thus, Plaintiff

5 The Amended Complaint is unclear as to the “license” for which

these five entities or individuals “appl[ied].” (Id. ¶ 58.)

allegedly suffered financial harm to its business amounting to

more than 20 million dollars in damages. (See id. ¶¶ 62-68.)

II. Procedural History

Plaintiff commenced this action against the Town in New

York State Supreme Court, County of Suffolk, on August 26, 2025.

(See id. ¶ 162.) The Town removed this action to federal court on

September 9, 2025. (See generally Notice of Removal, ECF No. 1.)

Plaintiff amended its Complaint on October 23, 2025, to add

Defendant OCM as a necessary party to the action. (See generally

Am. Compl.) In addition to certain State law claims, the Amended

Complaint alleges the Town unlawfully violated Plaintiff’s

Fourteenth Amendment rights to procedural and substantive due

process and equal protection in violation of Section 1983. (See

id. ¶¶ 89, 93-96, 103, 106-107.) Specifically, Plaintiff alleges

the Town treated Plaintiff “unequally” because it is a marijuana

distributor. (Id. ¶ 110.) On December 17, 2025, Plaintiff filed

the instant Motion, seeking to add factual allegations in support

of its equal protection and Donnelly Act claims. (See generally

Motion.) On January 12, 2026, the Town submitted its opposition

(“Opposition”) to the Motion. (See generally Opp’n.)

III. Plaintiff’s Proposed Second Amended Complaint

A. Plaintiff Seeks to Bolster its Equal Protection Claim

The PSAC proffers additional factual allegations to

bolster Plaintiff’s equal protection claim. (Id. ¶¶ 123-96.)

Plaintiff alleges the Town has discriminated against the cannabis

industry “at-large.” (Id. ¶ 130.) Despite the Town’s alleged

widespread discrimination against cannabis dispensaries, Plaintiff

discusses at length the opening of Charlie Fox, another cannabis

dispensary in the Town. (See generally id. ¶¶ 131-96.) Plaintiff

and Charlie Fox are State-licensed to distribute cannabis. (See

id. ¶ 150.) Both Plaintiff and Charlie Fox sought to establish

dispensaries in the Town, applied to operate their businesses

within the Town’s “Highway Business District [] along County Road

39,” and were subject to the Town’s special use exception approval

process. (Id. ¶¶ 151-55.) However, Plaintiff secured a State

CAURD license and applied to the Town for a special use exception

before Charlie Fox. (See id. ¶¶ 180-82.)

Shortly after Plaintiff filed its original Complaint

against the Town, Charlie Fox publicly announced it would open for

business in the Town, despite failing to obtain “special exception

approval.” (Id. ¶ 131.) Charlie Fox opened on September 16,

2025,6 and the Town pursued injunctive relief to cease Charlie

Fox’s operations. (See id. ¶¶ 133-34.) On October 3, 2025, a

State court granted the Town’s request for injunctive relief and

precluded Charlie Fox from opening. (See id. ¶ 136.) Following

the court’s grant of injunctive relief, OCM issued its October 6

6 Absent from the Amended Complaint and PSAC is any mention of when

Plaintiff first opened for business in the Town.

Advisory. (See id. ¶ 138.) After OCM issued this Advisory, the

Town and Charlie Fox entered an “informal agreement” in which

Charlie Fox voluntarily discontinued its business to obtain

“necessary Town approvals,” and in turn, the Town sought to lift

its temporary restraining order against Charlie Fox.

(Id. ¶¶ 140-43, 174.) On November 20, 2025, the Town approved

Charlie Fox’s “special permit application” despite Charlie Fox’s

failure to comply with all building safety conditions previously

required by the Town. (Id.) Charlie Fox reopened for business on

November 22, 2025. (See id. ¶ 145.) Plaintiff, however, has

remained unable to secure special exception approval from the Town,

and the Town continues to issue “citations” against Plaintiff and

its landlord. (-Se-e- -id-.- ¶¶ 148-49.)

Plaintiff maintains Charlie Fox agreed not to sue the

Town in exchange for the Town’s “expedited approval” of Charlie

Fox’s “special use permit application.” (Id. ¶ 146.) Although

Plaintiff and Charlie Fox are “materially [] similar” candidates

for a special use exception, the Town has required only Plaintiff

to adhere to more onerous pre-conditions to operating its business.

(Id. ¶¶ 155-56.) This has resulted in additional financial losses

for Plaintiff because it cannot market itself as the first

“legalized” dispensary within the Town. (Id. ¶ 189.) This also

frustrates the purpose of the Cannabis Law’s CAURD licensing

program (of which Charlie Fox is not a licensee), because the

program intended to give CAURD licensees, like Plaintiff, “first

to market status,” a competitive advantage which is now lost.

(Id. ¶ 191.)

The PSAC further alleges the Town strategically approved

Charlie Fox’s special exception application to avoid further

lawsuits from cannabis dispensaries while bolstering its defense

against the instant action by showing it does not harbor

discriminatory animus towards businesses in the cannabis industry.

(See id. ¶¶ 193, 195.)

B. Plaintiff Also Seeks to Add a Donnelly Act Claim

The PSAC also sets forth a cause of action against the

Town for violation of the Donnelly Act. (See id. ¶¶ 198-99.)

Plaintiff contends the Town’s disparate enforcement of Town Code

Section 330-162.26 has resulted in “an unfair and unequal restraint

of free trade suffered by” Plaintiff. (Id. ¶ 200.) That is the

extent of Plaintiff’s proffered allegations specific to its

Donnelly Act claim. (See generally id. ¶¶ 197-201).

IV. Material Factual Developments Since Plaintiff Filed This

Motion

Although not at issue for purposes of resolving the

instant Motion, there have been several material factual

developments since Plaintiff filed this Motion. On February 27,

2026, the Court held an in-person status conference with the

parties regarding this action. (See Feb. 27, 2026, Minute Entry.)

At that conference, on the record, the parties asserted Plaintiff

was fully operating as a cannabis dispensary in the Town. Thus,

Plaintiff is currently open for business and has been for at least

five months. According to a public records search, Plaintiff’s

State license to operate as a cannabis dispensary is also current

and remains effective until June 14, 2028. See Current OCM

Licenses, DATA.NY.GOV, https://data.ny.gov/Economic-

Development/Current-OCM-Licenses/jskf-tt3q/data_preview (last

viewed Aug. 12, 2026). These facts are not included in the PSAC.

At the February 27, 2026, conference, the parties also

maintained the Town’s alleged insistence Plaintiff construct a

sidewalk abutting its property remained a point of contention.

Plaintiff contends the Town is unreasonably requiring Plaintiff to

install a sidewalk and issuing citations for Plaintiff’s refusal

to do so, but the Town counters the requirement is that of Suffolk

County, which is not a party to this action, but should be.

DISCUSSION

I. Legal Standard for Motion to Amend

A. Rule 15(a), Generally

Pursuant to Rule 15(a) of the Federal Rules of Civil

Procedure, courts have discretion to allow parties to amend their

pleadings “when justice so requires.” FED. R. CIV. P. 15(a)(2);

see also TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d

Cir. 2014); Amaya v. Roadhouse Brick Oven Pizza, Inc., 285 F.R.D.

251, 253 (E.D.N.Y. 2012) (“A court should freely give leave when

justice so requires, and such leave is in the court’s discretion.”

(citation modified)). The amendment standard is liberal,

permitting plaintiffs “to assert matters that were overlooked or

were unknown at the time of the original complaint or answer.”

RCX I, LLC v. Pitter-Nelson, No. 11-CV-3513, 2014 WL 5809514, at

*5 (S.D.N.Y. Nov. 6, 2014) (citation modified).

But where there is “undue delay, bad faith, or dilatory

motive on the part of the movant, repeated failure to cure

deficiencies by amendments previously allowed, undue prejudice to

the opposing party by virtue of allowance of the amendment, [or]

futility of the amendment,” a Rule 15 motion should be denied.

Amaya, 285 F.R.D. at 253; see also Francisco v. Abengoa, S.A., 559

F. Supp. 3d 286, 310 (S.D.N.Y. 2021) (“[A] motion to amend should

be denied only if the moving party has unduly delayed or acted in

bad faith, the opposing party will be unfairly prejudiced if leave

is granted, or the proposed amendment is futile.” (quoting

Agerbrink v. Model Serv. LLC, 155 F. Supp. 3d 448, 452 (S.D.N.Y.

2016))). “The party opposing a motion to amend bears the burden

of establishing that the amendment should be denied.” Baptiste v.

Suffolk County, No. 19-CV-0042, 2022 WL 1224570, at *4 (E.D.N.Y.

Apr. 26, 2022).

B. Futility of Amendment

Futility warrants denial of leave to amend when it is

“beyond doubt that the plaintiff can prove no set of facts in

support of [its] amended claims.” Franciso, 559 F. Supp. 3d at

315. The nonmovant bears the burden of establishing amendment is

futile. See id.; see also Joinnides v. Floral Park-Bellerose Union

Sch. Dist., No. 12-CV-5682, 2015 WL 1476422, at *9 (E.D.N.Y. Mar.

31, 2015). “To determine whether a proposed pleading is futile,

courts analyze whether it would withstand a motion to dismiss

pursuant to Rule 12(b)(6)” for failure to state a claim upon which

relief can be granted. Franciso, 559 F. Supp. 3d at 315. Thus,

a court must accept all facts alleged by a plaintiff as true and

construe such facts in the light most favorable to the plaintiff.

See Oneida Indian Nation of N.Y. State v. County of Oneida, N.Y.,

199 F.R.D. 61, 88 (N.D.N.Y. 2000). “If the proposed amended

complaint would be subject to ‘immediate dismissal’ for failure to

state a claim or on some other ground, [a] [c]ourt will not permit

amendment.” Id. (emphasis in original) (internal quotation marks

and citation omitted).

To survive a motion to dismiss under Rule 12(b)(6), a

complaint must allege “enough facts to state a claim to relief

that is plausible on its face.” Basile v. Levittown United Tchrs.,

17 F. Supp. 3d 195, 200 (E.D.N.Y. 2014) (quoting Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007)); see also Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009). Although a complaint facing dismissal

need not include detailed factual allegations, a plaintiff must

articulate the grounds of its entitlement to relief beyond mere

“labels and conclusions.” Twombly, 550 U.S. at 555. “[A]

formulaic recitation of the elements of a cause of action” is

insufficient. Id. Thus, a pleading supported only by legal

conclusions disguised as facts cannot survive a motion to dismiss.

See Garcia v. Paylock, No. 13-CV-2868, 2014 WL 298593, at *4

(E.D.N.Y. Jan. 28, 2014) (citation omitted); Iqbal, 556 U.S. at

678 (“[T]he tenet that a court must accept as true all of the

allegations contained in a complaint is inapplicable to legal

conclusions.”).

A court’s evaluation of a motion to dismiss under Rule

12(b)(6) is limited to the following: (1) factual allegations in

the complaint; (2) documents attached as an exhibit or incorporated

by reference into the complaint; (3) matters of which judicial

notice may be taken; and (4) documents “upon whose terms and effect

the complaint relies heavily, i.e., documents that are ‘integral’

to the complaint.” D.C. v. Copiague Union Free Sch. Dist.,

No. 16-CV-4546, 2017 WL 3017189, at *3 (E.D.N.Y. July 11, 2017).

II. Analysis

Plaintiff moves to amend the Amended Complaint under

Rule 15(a). The Town opposes the Motion, contending, inter alia,

the proposed amendments would be futile because Plaintiff lacks

standing to bring claims pursuant to Section 1983 and the

Fourteenth Amendment to the United States Constitution because the

possession, distribution, and sale of marijuana is not a federally

protected right. (See generally Opp’n.) Before reaching the

merits of Plaintiff’s Motion (and the Town’s attendant

Opposition), the Court must first address Plaintiff’s standing to

bring this action.

A. Standing

Standing challenges are properly addressed pursuant to

Rule 12(b)(1) of the Federal Rules of Civil Procedure. See

Evolution Fast Food One, LP v. HVFG, LLC, 720 F. Supp. 3d 251, 259

(S.D.N.Y. 2024). “A case is properly dismissed for lack of subject

matter jurisdiction under Rule 12(b)(1) when the district court

lacks the statutory or constitutional power to adjudicate it.”

Id. at 260 (internal quotation marks and citation omitted).

Article III standing and statutory standing are distinct. See id.

[Article III standing] is a constitutionally

imposed limit on a federal court’s power to

hear a case. Statutory standing, by contrast,

is a somewhat misleading term because it

refers to a nonjurisdictional inquiry that

does not implicate the court’s statutory or

constitutional power to adjudicate the case.

Instead, it concerns whether a plaintiff has

a cause of action under the statute.

Therefore, a lack of statutory standing

requires dismissal for failure to state a

claim, while lack of Article III standing

requires dismissal for lack of subject matter

jurisdiction. This distinction matters not

only because of a court’s independent

obligation to examine its own jurisdiction,

but also because the distinction bears on the

preclusive effect of the court’s decision.

Id. (emphasis in original) (quotation marks and citations

omitted); see also All for Env’t Renewal, Inc. v. Pyramid

Crossgates Co., 436 F.3d 82, 88 n.6 (2d Cir. 2006) (noting unlike

dismissal for lack of subject matter jurisdiction under Rule

12(b)(1), a dismissal under Rule 12(b)(6) for failure to state a

claim is “an adjudication on the merits with preclusive effect”).

Thus, as a threshold matter, a court must evaluate a

plaintiff’s Article III standing “even though not raised earlier

in the litigation[;] indeed, this Court would have to raise [the

issue] sua sponte.” Steel Co. v. Citizens for a Better

Environment, 523 U.S. 83, 93 (1998). But in its Opposition, the

Town fails to specify whether it contends Plaintiff lacks Article

III standing or statutory standing. The Court thus considers the

question of Plaintiff’s standing as follows.

i. Article III Standing

To establish Article III standing, a plaintiff must

show: (1) “he suffered an injury in fact that is concrete,

particularized, and actual or imminent”; (2) “the injury was likely

caused by the defendant”; and (3) "the injury would likely be

redressed by judicial relief.” Evolution Fast Food One, LP, 720

F. Supp. 3d at 261. An injury in fact is “an invasion of a legally

protected interest,” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560

(1992), such as property rights, rights arising out of contract,

rights protected against tortious invasion, or rights arising from

a statute conferring a privilege. See Tenn. Elec. Power Co. v.

Tenn. Val. Auth., 306 U.S. 118, 137 (1939), overruled on other

grounds by Bond v. United States, 564 U.S. 211 (2011). A plaintiff

may not rely solely upon past injury but must also plausibly allege

“a real and immediate threat of future injury.” Gannon v. Hua Da,

Inc., No. 22-CV-1650, 2023 WL 2664012, at *2 (S.D.N.Y. Mar. 28,

2023); see also Calcano v. Swarovski N. Am. Ltd., 36 F.4th 68, 74

(2d Cir. 2022).

If a plaintiff is an entity, it may establish either

“associational” or “representational” standing to sue “on behalf

of its members, or by establishing [] it was directly injured as

an organization.” Evolution Fast Food One, LP, 720 F. Supp. 3d at

261. To establish direct injury, the organization must satisfy

the same standing test applicable to individuals. See id. An

Article III injury may arise from a defendant’s conduct that

“frustrates an organization’s mission” and the organization

dedicates resources to “combatting the conduct.” Id. (internal

quotation marks and citation omitted). An organization can also

establish injury if it asserts it needed to “divert resources from

other activities to address the harm caused by a defendant’s

conduct.” Id. (internal quotation marks and citation omitted).

To the extent the Town argues Plaintiff lacks Article

III standing, the Court disagrees. Article III standing requires

only that a “plaintiff [] allege[] an injury-in-fact that is

traceable to the defendant’s conduct and redressable by the

requested relief.” Noel v. Pepsico, Inc., No. 24-CV-7516, 2026 WL

558118, at *8 (S.D.N.Y. Feb. 27, 2026) (citations omitted) (citing

Duke v. Luxottica U.S. Holdings Corp., 167 F.4th 16, 27-28 (2d

Cir. 2026) (rejecting argument that plaintiff did not have

standing where her requested remedy was “categorically unavailable

under [the statute]” because “this argument target[ed] the merits

of [plaintiff]’s claims, not her standing to pursue them” (citation

modified)). “In addition to satisfying the core Article III

requirements,” a plaintiff need not demonstrate the statute “under

which [it] sue[s] can provide [its] requested relief.” Noel, 2026

WL 558118, at *8.

Here, the PSAC contends the Town’s refusal to grant

Plaintiff a special use permit or “special exception” is onerous,

arbitrary, and discriminatory, thereby violating Plaintiff’s

Fourteenth Amendment rights by hindering and harming Plaintiff’s

cannabis business and related property. (See PSAC ¶¶ 155-56, 191,

193, 195.) Plaintiff has allegedly incurred substantial costs and

fees in trying to placate the Town’s unlawful demands, amounting

to more than 20 million dollars in damages. (See id. ¶¶ 62-68.)

And such injury is likely to continue because the Town continues

to issue Plaintiff “citations” related to the operation of its

cannabis business. (See id. ¶¶ 148-49.) Plaintiff thus seeks

economic and injunctive relief. (See id. ¶¶ 62-69.)

In opposition, the Town contends Plaintiff cannot have

a constitutionally protected ownership or property interest in the

possession or distribution of marijuana. (See Opp’n at 2-5.)

However, in the context of Article III standing, a plaintiff’s

“[o]wnership interest is determined under the law of the state in

which the interest arose.” Shulman v. Kaplan, 58 F.4th 404, 408

(9th Cir. 2023) (internal quotation marks and citation omitted).

New York state’s recognition of cannabis-related property

interests is undisputed, see, e.g., N.Y. CANBS. LAW §§ 1, et seq.,

and the Second Circuit has held that plaintiffs pursuing actions

in federal court related to the sale or distribution of marijuana

have Article III standing. See Variscite NY Four, LLC v. N.Y.

State Cannabis Control Bd., 152 F.4th 47, 58-59 (2d Cir. 2025)

(holding plaintiffs established Article III standing to sue the

State for certain claims related to CAURD licensing). As the Ninth

Circuit has instructed, “the fact that [Plaintiff] seek[s] damages

for economic harms related to cannabis is not relevant to whether

a court could, theoretically, fashion a remedy to redress their

injuries. Therefore, the alleged harm in this case is redressable

by the federal court.” Shulman, 58 F.4th at 409.

Accordingly, both the Amended Complaint and PSAC

establish Plaintiff’s Article III standing.

ii. Statutory Standing

Unlike Article III standing, “statutory standing” is not

a threshold jurisdictional inquiry that must be resolved before

considering the merits of a claim. See Sundown by Farkas v. Aetna

Life Ins. Co., No. 23-CV-1905, 2024 WL 1051165, at *4 (E.D.N.Y.

Jan. 16, 2024) (“Challenges to a plaintiff’s statutory

authorization are properly understood as Rule 12(b)(6) motions to

dismiss for failure to state a claim.”). Instead, statutory

standing evaluates whether a plaintiff “falls within the class of

plaintiffs whom Congress has authorized to sue” under the statute

or, more simply, whether a plaintiff “has a cause of action under

the statute.” Id. (internal quotation marks and citations

omitted). Thus, challenges to a plaintiff’s statutory standing

have preclusive effect and are evaluated as motions to dismiss for

failure to state a claim pursuant to Rule 12(b)(6). See id. at

*5.

However, in this instance and in its discretion, the

Court declines to convert the instant Motion into a motion to

dismiss the Amended Complaint with prejudice at this juncture.

Instead, it evaluates only whether the claims proffered in the

PSAC warrant leave to amend.

B. Plaintiff’s Proposed Amendments are Futile

i. Equal Protection Claim

The PSAC asserts an equal protection claim arising under

Section 1983 to “enforce rights guaranteed by the Constitution.”

Billeris v. Inc. Village of Bayville, N.Y., 694 F. Supp. 3d 214,

225 (E.D.N.Y. 2023). Under Section 1983, violations of the

Constitution are evaluated according to a two-step inquiry. See

Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103,

106 (1989). “First, the plaintiff must assert a violation of a

federal right.” Id. (emphasis added). To determine if a federal

right has been violated, a court considers whether the provision

at issue “creates obligations binding on the governmental unit or

[] ‘does no more than express a congressional preference for

certain kinds of treatment.” Id. (internal quotation marks and

citation omitted). Courts also ask whether the provision at issue

was intended to benefit the plaintiff. See id. And the asserted

interest must not be so vague and amorphous the court is unable to

enforce it. See id. Second, even if a plaintiff asserts a federal

right, the defendant may show Congress “specifically foreclosed a

remedy under [Section] 1983” by instead providing an

administrative or other enforcement mechanism to protect that

right. Id.

The PSAC seeks to bolster Plaintiff’s claim the Town

violated Plaintiff’s federal right to equal protection. The Equal

Protection Clause of the Fourteenth Amendment “guarantees the

right to be free from invidious discrimination in statutory

classifications and other governmental activity.” D.C. v.

Copiague Union Free Sch. Dist., No. 16-CV-4546, 2017 WL 3017189,

at *6 (E.D.N.Y. July 11, 2017). While an equal protection claim

may be based on a plaintiff’s allegations it was a victim of

discrimination stemming from its membership in a protected class,

equal protection rights also extend to individuals who allege

disparate treatment based on “ill will or without rational basis.”

Buonanotte v. Noonan, 534 F. Supp. 2d 385, 393 (E.D.N.Y. 2008).

A plaintiff that does not allege to be a member of a

constitutionally protected class may state an equal protection

claim pursuant to one of two theories: “(1) selective enforcement,

or (2) class of one.” Kirton v. Doe, No. 20-CV-10860, 2024 WL

809904, at *5 (S.D.N.Y. Feb. 27, 2024) (internal quotation marks

and citation omitted). Under either theory, a plaintiff must

identify a similarly situated comparator that received

differential treatment. See Hu v. City of N.Y., 927 F.3d 81, 93

(2d Cir. 2019). Whether two comparators are similarly situated is

generally a question of fact. See Harper v. Vill. of Hillburn,

No. 25-CV-0342, 2025 WL 2653673, at *6 (S.D.N.Y. Sept. 16, 2025).

But under Rule 12(b)(6), a court must determine whether a jury

could plausibly find the comparators similarly situated based on

the allegations in the complaint. See id.

Pursuant to the Controlled Substances Act (“CSA”),

marijuana is a Schedule I controlled substance, and its sale and

distribution are prohibited by federal law. See 21 U.S.C. §§ 812,

841(a)(1); see also Cannabis Impact Prevention Coalition, LLC v.

Hochul, 222 N.Y.S.3d 891, 905 (Sup. Ct. Sept. 20, 2024) (“Marijuana

is classified as a Schedule I substance . . . based on its high

potential for abuse, no accepted medical use, and no accepted

safety for use in medically supervised treatment”). As courts

outside this Circuit have aptly found, there is no federal

Constitutional right protecting a plaintiff’s possession, sale, or

distribution of marijuana. See Hoover v. Michigan Dep’t of

Licensing and Regul. Affs., No. 19-CV-11656, 2020 WL 230136, at *9

(E.D. Mich. Jan. 15, 2020) (“although [] [Michigan law] provides

narrow exceptions for marihuana use . . . under the federal [CSA]

. . . it is illegal for any private person to possess marihuana

for any purpose.” (citation modified)); Salazar v. City of

Adelanto, No. ED CV 19-2333, 2020 WL 5778122, at *7 (C.D. Cal.

Aug. 31, 2020), report and recommendation adopted by

No. ED CV 19-2333, 2020 WL 5764404 (C.D. Cal. Sept. 24, 2020)

(“[C]ourts . . . have uniformly found that no private person can

have a cognizable property interest in marijuana, even where the

state has decriminalized its possession, cultivation, and/or

sale.”); Georgia Atlas, Inc. v. Turnage, 594 F. Supp. 3d 1339,

1346 (N.D. Ga. 2022) (“Since Plaintiffs do not have a federal

constitutional or statutory right to manufacture, distribute, or

possess marijuana, having been denied a license to do so by the

State of Georgia is not an injury-in-fact sufficient to confer

standing for their Section 1983 claims.”).

Although the sale and distribution of adult-use

marijuana is legal under New York state law, this practice is

plainly prohibited for any purpose under federal law. Thus,

Plaintiff does not have a Constitutional right to equal protection

in connection with Plaintiff’s sale of marijuana. -Cf-.- -id-.- (“Even

assuming the process to which Plaintiffs were subjected was plagued

with unfairness and rife with error, marijuana is still

contraband.”). No possible amendment to Plaintiff’s Complaint

would change this fact. As such, Plaintiff’s request for leave to

amend its equal protection claim is futile.

Even if Plaintiff had a federally protected,

Constitutional right to sell or distribute marijuana, the PSAC

would still fail to state an equal protection claim under either

a “class of one” or “selective enforcement” theory. The PSAC fails

to allege, beyond mere conclusory assertions, that a similarly

situated comparator received more favorable treatment than

Plaintiff. The PSAC alleges Plaintiff and Charlie Fox are both

State-licensed to distribute cannabis and sought to establish

dispensaries in the Town’s “Highway Business District [] along

County Road 39.” (See PSAC ¶¶ 151-55.) Plaintiff and Charlie Fox

both were also subject to the Town’s special use exception approval

process. (See id.) But that is where Plaintiff and Charlie Fox’s

alleged similarities end. The PSAC fails to specify where in the

Highway Business District Charlie Fox is located or its proximity

to Plaintiff. The PSAC also does not comprehensively allege the

ethnic or racial composition of Plaintiff’s or Charlie Fox’s

ownership, apart from noting Plaintiff’s “largest shareholder” is

an African American man. (Id. ¶ 118.)

More importantly, the PSAC does not allege what, if

anything, was wrong with Charlie Fox’s property to prompt the Town

to enjoin its operation. The PSAC baldly alleges Charlie Fox and

the Town entered into an agreement to settle ongoing litigation in

exchange for special exception approval, allowing Charlie Fox to

lawfully open its dispensary. But Plaintiff fails to offer

anything more than conclusory allegations to establish what

motivated this agreement or the Town’s approval of Charlie Fox’s

special exception. Put simply, the operational issues standing in

the way of Plaintiff receiving the Town’s approval for the same

special exception may vastly differ from the issues faced (and

resolved) by Charlie Fox. Because the PSAC wholly fails to proffer

any factual allegations clarifying this point, neither the Court

nor a jury can determine if Charlie Fox (or any other retail

business in the Town) is similarly situated to Plaintiff for

purposes of evaluating its equal protection claim. See Harper,

2025 WL 2653673, at *6 (“Conclusory allegations of selective

treatment are insufficient to state an equal protection claim.”

(internal quotation marks omitted)). Because Plaintiff has failed

to allege the existence of a similarly situated comparator,

Plaintiff “cannot maintain an equal protection claim under either

a selective enforcement or class of one theory.” Viteritti v.

Inc. Vill. of Bayville, 918 F. Supp. 2d 126, 136 (E.D.N.Y. 2013);

cf. also Ruston v. Town Bd. for Town of Skaneateles, 610 F.3d 55,

60 (2d Cir. 2010) (affirming dismissal of “class of one” equal

protection claim because plaintiffs failed to allege the purported

comparator properties were so similar “no rational person could

see them as different”).

Accordingly, Plaintiff’s proposed amendments to its

equal protection claim are futile, and the motion to amend is

DENIED, without prejudice, with respect to this claim.

ii. Donnelly Act Claim

The PSAC also proffers an additional cause of action

under the Donnelly Act. See N.Y. GEN. BUS. LAW § 340. The Donnelly

Act is modeled after the Sherman Anti-Trust Act, 15 U.S.C. §§ 1,

et seq., and thus, is generally construed in light of federal

precedent. See Great Atl. & Pac. Tea Co., Inc. v. Town of East

Hampton, 997 F. Supp. 340, 352 (E.D.N.Y. 1998). “The Donnelly Act

makes illegal and void any contract, arrangement or agreement that

restrains competition in any business, or unlawfully interferes

with the free exercise of any activity in the conduct of any

business.” Id. (citing N.Y. GEN. BUS. LAW § 340).

To state a claim pursuant to the Donnelly Act, a

complaint must “1) identify the relevant product market;

2) describe the nature and effects of the purported conspiracy;

3) allege how the economic impact of that conspiracy is to restrain

trade in the market in question; and 4) show a conspiracy or

reciprocal relationship between two or more entities.” Id.;

Benjamin of Forest Hills Realty, Inc. v. Austin Sheppard Realty,

Inc., 823 N.Y.S.2d 79, 81-82 (App. Div. 2d Dep’t 2006).

“Conclusory allegations of conspiracy are legally insufficient to

make out a violation of the Donnelly Act.” Great Atl. & Pac. Tea

Co., Inc., 997 F. Supp. at 352. To survive a motion to dismiss,

a Donnelly Act claim must “include specific, factual allegations

[about] [] the identities of the co-conspirators, the nature of

their conspiracy, how the participants attempted to accomplish

their objectives, and what overt acts they performed.” Nat’l Gear

& Piston, Inc. v. Cummins Power Sys., LLC, 861 F. Supp. 2d 344,

371 (S.D.N.Y. 2012) (internal quotation marks and citation

omitted).

Here, the PSAC fails to identify the “relevant product

market,” apart from stating both Plaintiff and Charlie Fox sought

to operate within the Town’s Highway Business District. This is

insufficient to state a Donnelly Act claim. See Benjamin of Forest

Hills Realty, Inc., 823 N.Y.S.2d at 82 (“The plaintiff must explain

why the market it alleges is in fact the relevant, economically

significant product market.” (internal quotation marks and

citations omitted)); Shepard Indus., Inc. v. 135 E. 57th St., LLC,

No. 97-CV-8447, 1999 WL 728641, at *4 (S.D.N.Y. Sept. 17, 1999)

(“Plaintiff’s failure to allege a geographic market and a product

market is [] fatal to its Donnelly Act claim.”). Nor does the

PSAC allege the agreement between the Town and Charlie Fox

restrained trade within the relevant market. Instead of

identifying any alleged restraint on the market (whatever that

market may be), Plaintiff simply alleges the “conspiracy” injured

Plaintiff because it could not market itself as the Town’s first

legal dispensary. That is insufficient. See Dibble v. Schroedel,

239 N.Y.S. 3d 574, 574 (App. Div. 2d Dep’t 2025) (at a minimum, a

complaint must allege “both concerted action by two or more

entities and a consequent restraint of trade within an identified

relevant product market”).

Further, the PSAC does not include any specific factual

allegations about the nature of the conspiracy between the Town

and Charlie Fox or the overt acts they engaged in to further this

conspiracy. See Nat’l Gear & Piston, Inc., 861 F. Supp. 2d at 371

([“]Unspecified contracts with unnamed other entities to achieve

unidentified anticompetitive effects [do] not meet the minimum

standards of pleading a conspiracy” under the antitrust laws

(internal quotation marks and citation omitted)). Moreover, the

PSAC contains no facts to suggest the Town’s approval of Charlie

Fox’s special use exception “was the product of a conspiracy or

reciprocal arrangement, as opposed to a unilateral act by the Town

that may have inured to the benefit of [other] retailers.” Great

Atl. & Pac. Tea Co., 997 F. Supp. at 352.

Accordingly, Plaintiff’s proposed amendments regarding

its Donnelly Act claim are futile. For the foregoing reasons, the

Court finds it unnecessary to address the parties’ remaining

arguments at length.7

C. The Court Denies Plaintiff’s Motion Without Prejudice

Accordingly, in its discretion, the Court DENIES

Plaintiff’s Motion without prejudice to renew. See, e.g., McCarthy

v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007) (“it

is within the sound discretion of the [Court] to grant or deny

leave to amend”). Although the claims proffered by the PSAC are

futile, there have been several material factual developments in

this action since Plaintiff filed this Motion.8 (See supra

7 It is well-settled “there is no requirement for a court to

specifically address each and every argument raised by a party in

papers filed with the Court.” Hallmark Licensing, LLC v. Dickens,

Inc., No. 17-CV-2149, 2020 WL 6157007, at *7 (E.D.N.Y. Oct. 21,

2020) (quoting Miller v. Metro. Life Ins. Co., No. 17-CV-7284,

2018 WL 5993477, at *5 n.5 (S.D.N.Y. Nov. 15, 2018) (further

citations omitted)).

8 While the claims articulated in the PSAC are futile, they are

neither unduly prejudicial nor delayed. Cf. Rochester Drug

Co-Operative, Inc. v. Hiscox Ins. Co., Inc., 545 F. Supp. 3d 21,

“Background,” Part IV.) One such critical development is Plaintiff

is open for business and fully operating. (See id.) Thus, the

record before the Court would benefit from further clarification

as to what, if any, of the claims in the Amended Complaint are

still viable and why. However, the Court will not consider any

renewed motion to amend that simply incorporates by reference any

party’s prior filings. See generally Tyson v. Town of Ramapo, No.

17-CV-4990, 2023 WL 3044623, at *1 (S.D.N.Y. Apr. 21, 2023)

(“Judges are not like pigs, hunting for truffles buried in briefs

or the record.” (internal quotation marks and citation omitted)).

And any proposed amended complaint must be supported by factual

allegations sufficient to withstand a motion to dismiss and

otherwise conform with the Court’s rulings herein.

CONCLUSION

Accordingly, for the stated reasons, IT IS HEREBY

ORDERED that Plaintiff’s Motion to amend the Amended Complaint

(ECF No. 28) is DENIED without prejudice to renew.

It is FURTHER ORDERED that Plaintiff shall have no more

than 21 days from the date of this Memorandum and Order to file a

renewed motion to amend. If no such motion is timely filed, the

25 (W.D.N.Y. 2021) (ruling defendant failed to demonstrate

meaningful prejudice because allowing amendment would not

“significantly delay final disposition” of the case nor impair or

alter defendant’s litigation strategy).

Amended Complaint (ECF No. 9) shall continue to be the operative

Complaint in this action.

SO ORDERED.

/s/ JOANNA SEYBERT

Hon. Joanna Seybert, U.S.D.J.

Dated: August 13, 2026

Central Islip, New York