The state is taking action to get rid of the thousands of operators who are selling cannabis out of storefronts without a license.
Governor Kathy Hochul announced Wednesday that the state budget included provisions that provide greater enforcement powers to the Office of Cannabis Management, which oversees the industry, and the Department of Taxation and Finance to penalize and shut down stores engaged in the illegal sale of cannabis.
The city estimates that pot is being peddled out of about 1,400 storefronts across the 5 boroughs, with the problem also rampant in other areas of the state. Meanwhile, only eight stores across the state have opened that are legally permitted to sell it, five of which are in New York City.
The legislation provides the OCM with the ability to assess civil penalties of up to $20,000 a day for operators who sell cannabis or cannabis products without a license.
In addition, the legislation bolsters OCM’s ability to inspect businesses selling cannabis and seize cannabis from unlicensed operators. Furthermore, it provides OCM with the power to seek court-orders that require the eviction of storefront operators making illegal sales.
The Dept. of Taxation and Finance will now be able inspect businesses illegally selling cannabis to determine whether they have paid taxes and will be able to levy civil penalties in cases where taxes have not been paid.
“As New York State continues to roll out a nation-leading model to establish its cannabis industry, these critical enforcement measures will protect New Yorkers from illicit, unregulated sales,” Hochul said in a statement. “Unlicensed dispensaries violate our laws, put public health at risk, and undermine the legal cannabis market. With these enforcement tools, we’re paving the way for safer products…and greater opportunities for New Yorkers.”
The state legalized cannabis in March 2021 and the Office of Cannabis Management (OCM) has been tasked with licensing businesses to sell marijuana. With pot being legal for more than two years, OCM has been subject to criticism for the slow issuance in licenses, which some say has played a role in the massive illegal market.
The law comes two months after Mayor Eric Adams and Manhattan District Attorney Bragg said that they plan to evict businesses illegally selling cannabis via a public nuisance law. Their policy calls on landlords to kick such tenants out or else the sheriff’s office will do so. Authorities say they have notified hundreds of smoke shops that they are at risk of being evicted.
Meanwhile, a bill has been introduced before the city council that would fine landlords for knowingly leasing space to businesses selling cannabis. The bill would require the city to notify landlords when a business has been busted for selling without a license, and the landlord would be subject to a hefty fine if their tenant were to reoffend.
