New York State budget talks are hung up on how to curb an onslaught of unlicensed cannabis retailers. It is self-evident that these illicit weed joints are hurting the ability for the cannabis industry to begin and grow. However, until there are more legal shops that compete with the illegal stores, it seems the State cannot shut them down or drive business into the regulated market. Lawsuits such as the one we recently covered by New York City against unlicensed operators and their landlords don’t seem to have not deterred most operators.
Huge fines proposed for unlicensed cannabis retailers
While the State issues additional condition adult use retail dispensary licenses, Gov. Kathy Hochul proposed legislation weeks ago to empower state agencies to increase fines on illegal sites from a paltry $250 to as much as $10,000 per day. State agencies would also be allowed to shutter the illegal cannabis stores for good. Mayor Adams previously complained that $250 was paltry and a mere slap on the wrist.
State senators showed they are devoting more legislative energy to the topic by commemorating the so-called “4/20” pot holiday April 20 with the establishment of a new subcommittee focused on cannabis issues.
Law enforcement authority expansion proposed for unlicensed cannabis retailers
The new legislation seeks to revise the state tax law and the cannabis law allowing the Office of Cannabis Management (“OCM”) and the Department of Taxation and Finance to crack down on illicit weed sellers while giving local law enforcement authorities more enforcement powers to go after unlicensed storefront dispensaries.
Under the governor’s new plan, tax officials would be given peace officer status to go after illicit weed dealers, and the tax department would be able to impose harsher penalties for illegal sales.
Breaking the law could lead to fines of $200,000 for selling illicit cannabis plants or products such as THC-infused gummy bears and other edibles and allow the OCM to fine businesses $10,000 per day for engaging in cannabis sales without a license.