Catch a fire: Hochul hopes to snuff out illegal pot shops with $10,000-per-day fines, ramped-up state enforcement

BY THE VILLAGE SUN | In some harsh news, man, for the city’s estimated 1,200 to 1,400 stores illegally selling weed, Governor Hochul is proposing fines of $10,000 per day for places engaging in cannabis sales without a license.

Violations of the law could lead to fines of $200,000 for illicit cannabis plants or products.

The legislation would also provide additional enforcement power to the Office of Cannabis Management and the state Department of Taxation and Finance to close stores engaged in illegal pot sales ASAP.

So far, only a handful of officially sanctioned, licensed pot dispensaries have opened in New York State, most of them concentrated in the Greenwich Village area. Upstate recently got its first legal reefer retailer when one opened in Ithaca.

Meanwhile, New York City’s graymarket smoke shops are willing to take their chances and keep operating, saying they can easily just restock if the sheriff raids them and confiscates their product.

“Over the past several weeks I have been working with the Legislature on new legislation to improve New York’s regulatory structure for cannabis products,” Hochul said. “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. I am proud of our continued progress creating the entirely new legal cannabis industry and helping legal dispensaries open their doors to offer safer cannabis products to New Yorkers.”

The new legislation, which is being introduced as a governor’s program bill in the state Senate and Assembly, amends the Tax Law and the Cannabis Law to enable the Office of Cannabis Management and the Department of Taxation and Finance and local law enforcement to enforce restrictions specifically on unlicensed storefront dispensaries. The legislation does not, however, impose any new penalties related to cannabis possession by an individual for personal use and does not allow local law enforcement to perform enforcement actions against individuals.

The proposed legislation, for the first time, would allow O.C.M. and D.T.F. to crack down on unlicensed activity. The measure would restructure current illicit cannabis penalties to give D.T.F. peace officers enforcement authority, create “a manageable, credible, fair enforcement system,” and would impose new penalties for retailers that evade state cannabis taxes.

Additionally, the law would clarify and expand O.C.M.’s authority to seize illicit product, establish summary procedures for O.C.M. and other governmental entities to shut down unlicensed businesses, and create a framework for more effective cross-agency enforcement effort.

Chris Alexander, the executive director of O.C.M., said, “The success of New York’s historic, equity-based approach to the cannabis industry depends on upholding our cannabis laws. Entrepreneurs looking to participate in our legal cannabis industry — especially justice-involved individuals looking for a CAURD (conditional adult-use retail dispensary) license — are being economically harmed by bad actors filling their storefronts with products that are questionable, and potentially dangerous. The Office of Cannabis Management is fully committed to working with our partners across the state to permanently shut these operations down and allow legal, licensed businesses to grow and thrive.”

Amanda Hiller, the acting D.T.F. commissioner, said, “New York State is building its cannabis market, while advancing the unique social-equity components of the MRTA (Marijuana Regulation and Taxation Act). Adult-use cannabis taxes fund our schools and drug treatment and public education programs. These taxes also contribute to the New York State Community Grants Reinvestment Fund, which reinvests tax revenue from cannabis sales to communities most impacted by overpolicing and cannabis prohibition. These new essential tax enforcement capabilities will allow us to crack down on illegal operations and help ensure these overdue opportunities exist for those communities.”