Southampton Board Rezoning Vote Leaves Cannabis Dispensary in Limbo

The Town of Southampton Board voted on July 8 to rezone land parcels on Montauk Highway from Highway Business to Village Business and Hamlet Commercial/Residential, effectively ceasing non-medical cannabis operations — a decision officials said was not in response to Mottz Green Grocer.

Joseph and Sean Lustberg of Upwise Capital aimed to fund and open their recreational cannabis dispensary, Mottz Green Grocer, at 93 East Montauk Highway. The Lustbergs’ seek to transform the vacant lot into “something very beautiful for the town,” despite impassioned pushback from Southampton residents.

“We now see that from the meeting, from everybody here, that the reason that this zoning is happening seems to be because you guys don’t want us coming into your town,” Joseph Lustberg told the board.

Since New York State legalized recreational marijuana in 2021, only a handful of 36 licensed cannabis retailer have opened on Long Island. Many dispensary owners complain of red tape in the approval process, citing lack of education surrounding legal recreation cannabis in their communities.

The Lustbergs alleged that the board targeted them after a town official previously found the site compliant and the company signed a lease.

“A town official told me this property was a viable solution,” Lustberg said. “I signed a legal contract with a landlord in this town knowing that I could operate my business out of that because it is Highway Business. You are violating every right I have.”

Town Planning and Development Administrator Janice Scherer could not confirm that a town official informed them that the property was viable for this use. While the lot may have been properly zoned under the previous Highway Business regulations, Scherer noted that potential tenants would need approval from the Southampton Planning Board.

According to the Town of Southampton Business Districts Table of Use Regulations, non-medical cannabis dispensaries are prohibited in a parcel designated as Village Business and Hamlet Commercial/Residential, but allowed with special exemptions in Highway Business sections.

“No such [exemption] approval was granted by the Planning Board, and no permits were issued. This means that there are no vested rights,” Scherer said.

The council members said the resolution was not proposed to “zone out” Mottz Green Grocer and residents have championed rezoning for four years.

“[Residents have] been looking for this change for a very long time. And I’m happy that we are finally the board that is moving forward with this,” Councilperson Cyndi McNamara said.

The rezoning dispute is not the first obstacle in Mottz Green Grocer’s short history. The Lustbergs said that they have faced multiple hurdles.

“This town has delayed us, has thrown us from department to department and has come up with reason after reason why we cannot operate there because of pushback from local people who are in these meetings every single week,” Lustberg said.