New York Gov. Proposes Crackdown on Unlawful Cannabis Shops

New York Gov. Kathy Hochul (D) is proposing legislation to crack down on unlicensed cannabis storefronts in the state, including fines of up to $10,000 per day for unlawful operations. The legislation would also give additional enforcement power to the Office of Cannabis Management (OCM) and the Department of Taxation and Finance to enforce the new regulatory requirements and close stores engaged in cannabis sales without a license. 

“The continued existence of illegal dispensaries is unacceptable, and we need additional enforcement tools to protect New Yorkers from dangerous products and support our equity initiatives. I am proud of our continued progress creating the entirely new legal cannabis industry and helping legal dispensaries open their doors to offer safer cannabis products to New Yorkers.” — Hochul in a press release 

The new legislation, which is being introduced as a governor’s program bill in the Senate and Assembly, amends the state’s tax law and adult-use cannabis law to enable the OCM, the Taxation and Finance Department, and local law enforcement to enforce restrictions on unlicensed storefront dispensaries. The legislation does not impose any new penalties related to cannabis possession by an individual for personal use and does not allow local law enforcement to perform enforcement actions against individuals. 

In addition to the $10,000 per day fines, the legislation would allow fines of up to $200,000 for unlawful cannabis cultivation. 

In a statement, OCM Executive Director Chris Alexander entrepreneurs seeking to participate in the state’s legal cannabis industry “are being economically harmed by bad actors filling their storefronts with products that are questionable, unregulated and potentially dangerous.” 

The legislation would restructure current illicit cannabis penalties to give taxation department peace officers enforcement authority, create a manageable, credible, fair enforcement system, and would impose new penalties for retailers that evade state cannabis taxes, the governor’s office said. The proposal would also clarify and expand OCM’s authority to seize illicit product, establish summary procedures for OCM and other governmental entities to shut down unlicensed businesses, and create a framework for more effective cross-agency enforcement effort.