New York Sends Cease-and-Desist Letters to Businesses Suspected of ‘Gifting’ Cannabis

The New York Office of Cannabis Management (OCM) on Tuesday sent cease-and-desist letters to businesses suspected of “gifting” cannabis in violation of state law. The agency said that businesses that do not comply risk being disqualified from getting a cannabis license along with possible fines and potential criminal penalties.

The practice of gifting is when businesses include cannabis with the purchase of another, often overpriced product.

OCM Executive Director Chris Alexander said regulators “want to make sure these operators fully understand the law and the consequences they face.”

“And now that these letters have been sent,” he said, “we fully expect them to cease and desist their activities – if they don’t, we will take action.”

Cannabis Control Board Chair Tremaine Wright said that “violators must stop their activity immediately, or face the consequences.”

“We have an obligation to protect New Yorkers from known risks and to strengthen the foundation of the legal, regulated market we are building. We will meet the goals of the [Marijuana Regulation and Taxation Act] to build an inclusive, equitable and safe industry.” – Wright in a press release

The agency indicated it has sent letters to more than two dozen businesses suspected of breaking the law.

In November, Wright suggested that the state would not begin accepting industry licenses until spring of next year at the earliest, despite the legislature-approved law having included a launch date of April 1, 2022.

During the board’s October meeting, Wright said that the practice of gifting is not allowed under New York law and violations could be met with “severe financial penalties.”