New York state is snuffing out illegal smoke shops and cannabis peddlers that have popped up over the past six months, Governor Kathy Hochul said Thursday.
Governor Hochul admitted that the new law is just the “tip of the iceberg” when it comes to fighting back against unauthorized cannabis sellers throughout the five boroughs and the state of New York at large. However, she charged at a press conference in Brooklyn — at the Department of Taxation and Finance office located at 15 MetroTech — on June 22 that the state-led initiative will play a pivotal role in keeping the public safe from products laced with dangerous substances.
“We’ve got a new process to shut down illegal operators and it keeps them shut until the fines are paid. And if it continues the Office of Cannabis Management will work with the State Attorney General’s office and issue restraining orders and issues of closure. So, there’s different layers here,” Hochul said.
According to the governor, the state now has a three-pronged approach to cripple the storefronts inundating communities with marijuana products, some feel are intentionally misleading in order to market to children. Hochul charged that enforcers can now dish out significantly higher fines to offending businesses, such as $10,000 a day that can be doubled to $20,000 a day if the storefront continues to sell after the violation has been applied.
With the new law also making it a crime to sell cannabis products without a license, officials can now padlock storefronts — shuttering repeat offenders outright.
While it may take some time for community members to feel the effect of the new enforcement measures, Hochul announced that since June 7 the New York State Office of Cannabis Management (OCM) and the New York State Department of Taxation and Finance (DTF) have jointly conducted inspections at 33 unlicensed businesses in New York City, Ithaca, and Binghamton. Thirty-one violations have been issued while a minimum of 1,000 pounds of illicit cannabis with an estimated value of nearly $11 million has been seized.
“We’re changing those dynamics. Are we going to get them all this week? No,” Hochul said. “This was a dynamic that we had to have the legislature change the law in order for me to do what I’ve been wanting to do, which is really aggressive enforcement. So, this is just the beginning.”
As a part of the 2024 FY Budget, the new law authorizes DFT and OCM to regularly inspect businesses selling cannabis, which will determine if taxes have been paid and the agencies can levy civil penalties if the appropriate tax funds have not been made. Additionally, under this new law, if businesses willfully fail to collect or remit taxes on cannabis sales, they can be charged with a tax fraud crime.
Hochul also shared that within the FY 2024 Budget, $5 million will be allocated for 37 additional OCM staff so that these routine inspections can be carried out.
The governor stressed that the enforcement process is also about ensuring the currently 15 legally licensed dispensaries have a fighting chance to survive against the unending, unlicensed pop-up stores that continue to appear week by week.
“Since legalization, there are persons for neither legacy nor from communities that were disproportionately impacted, who have launched unlicensed storefronts with the sole purpose of enriching themselves, ignoring the sacrifices that were made by our returning citizens who paid the ultimate price of prohibition,” said Osbert Orduna, a retired Marine and the owner of The Cannabis Place, a cannabis delivery service in Queens.
The 31 businesses that have already been found guilty of selling illegal cannabis with notices of violation have also been served with orders to cease unlicensed activity (a sign that is now glued to their doors). They must also appear at an administrative hearing to determine the fines and penalties that they will face.
