New York’s Top Cannabis Regulator: ‘Gifting’ is Illegal

The head of New York’s Cannabis Control Board last week declared the practice of “gifting” cannabis as part of a promotion with the purchase of another product – such as an overpriced shirt, lighter, or other items – is illegal under the state’s adult-use law, WXXI reports. During the board’s meeting last week, Chairman Tremaine Wright, said “the conduct is not legal and must stop.”

“There is no gray market in New York state. … Individuals who do not cease run the risk of severe financial penalties.” – Wright via WXXI

Wright did not elaborate on what the “severe financial penalties” could be and on what grounds they could be levied.

Jason Klimek, who co-leads law firm Barclay Damon’s cannabis team, told WXXI that this outcome was “fairly predictable.”

“Paramount is consumer safety, and the chair emphasized that,” he said. “It was very good for them to say that, because there has been a huge question about this, we get calls almost daily.”

Susan Rider-Ulacco, the executive assistant district attorney for Chemung County where an establishment is openly gifting cannabis, said that while officials have taken no action against the business yet, there could be law enforcement action in the future now that Wright has taken a firm position.

The practice of gifting is not a new one and is usually seen by some businesses and individuals as a loophole following the passage of adult-use laws but before regulations have been codified and the licensing process has begun.

While some potions of the state’s adult-use law have already taken effect – such as use and possession by adults – retail sales are not expected to begin until sometime next year.