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New York Gov. Kathy Hochul is proposing steep fines for stores selling weed without a license.
The move comes as pressure builds to crack down on unlicensed cannabis shops – something other city and state officials have struggled to do effectively. Hochul is also looking to make it easier to shut down those vendors that violate the law.
The governor introduced legislation in Albany Wednesday that would clarify and expand the authority of the state Office of Cannabis Management, the Department of Taxation and Finance and local police to enforce cannabis and tax laws. Under her bill, violations could result in fines of up to $200,000 for stores that have illicit cannabis products among their inventory, according to Hochul’s announcement.
The state Office of Cannabis Management would also be able to fine stores $10,000 a day for selling cannabis products illegally.
“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,” Hochul said.
The governor added that she is “proud of our continued progress” in creating a legal market in New York – although three years after marijuana was legalized here, just a handful of legal dispensaries have opened. That has largely been due to the state’s efforts to prioritize applicants with past marijuana convictions to open the first shops – but insiders have said it’s still unclear whether licenses will translate into successful businesses.
In the meantime, an estimated 1,300 stores selling cannabis without a license have popped up across New York City, according to local law enforcement.
City and state officials have characterized them as a threat to the success of the nascent legal market and Mayor Eric Adams announced in December that he had convened a task force to crack down on the shops. Some have since had inventory confiscated and fines levied. But efforts to stop them from restocking – or shut them down altogether – have been slow-going.
Some in the city sheriff’s office, which has been at the helm of the crackdown effort, have raised questions about their authority to enforce cannabis laws, the news outlet THE CITY reported.
Big, multi-state cannabis companies registered to sell medical marijuana in New York have been waiting in the wings to enter the recreational market while the state licenses social equity candidates first. In a lawsuit filed last week challenging the legality of the social equity program, they also identified illicit shops as a threat to the legal market and said state cannabis officials were failing to fulfill their duties under the Marijuana Regulation and Taxation Act by allowing them to operate.
In a statement Wednesday, the New York Medical Cannabis Industry Association, which represents companies involved in the suit, said, “Our members commend Governor Hochul for finally releasing a bill that bolsters the state’s ability to enforce the rules of the legal cannabis market.”
Hochul’s bill gives the state Office of Cannabis Management the authority to investigate any location where cannabis products are being grown, processed or sold during business hours.
It also includes other mechanisms for enforcement. For instance, the bill would give the Office of Cannabis Management or a local district attorney the ability to seek an injunction to block a cannabis vendor from operating if they don’t respond to an initial notice of a violation.
Language in the legislation clarifies exactly what can be used as evidence of illegal activity. The bill states that if a proprietor is selling cannabis products – or anything presented as cannabis – and can’t produce documentation showing it came from an authorized source, that should count as “presumptive evidence” that they haven’t paid taxes on those products.
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