# Opinion

> District Court, E.D. New York · August 13, 2026

URL: https://www.frixlaw.com/law-library/cases/11417514

## Case

- **Full name:** BROWN BUDDA NEW YORK, LLC v. TOWN OF SOUTHAMPTON; NEW YORK STATE OFFICE OF CANNABIS MANAGEMENT (OCM), as a “necessary party,”
- **Court:** District Court, E.D. New York
- **Decided:** August 13, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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.
--------------------------------X

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11417514. Public record. Not legal advice.