Authorities now have the power to fine landlords who knowingly rent commercial space to illegal smoke shops, according to new legislation that has just gone into effect.
Landlords will be notified in writing if they are renting space to an illegal cannabis business that is busted by authorities. Landlords who make no attempt to kick the tenant out are then susceptible to being hit with hefty fines if the illegal cannabis business reoffends.
Introduced by Council Member Lynn Schulman and sponsored by Council Member Carlina Rivera, among others, the pair brought attention to the new law on Monday outside of the Union Square Travel Agency Cannabis Dispensary. The legislation allows authorities to take aim at the landlords housing the illegal smoke shops, essentially allowing the NYPD, New York City Sheriff’s Office, and Office of Cannabis Management to have more freedom when it comes to enforcement.
“What happens is when the sheriff or the NYPD does a raid, the landlord gets a letter from the City saying you’re renting to an entity that’s conducting illegal business and we want you to evict them,” Schulman, who represents central Queens, said. “So that’s number one. Number two, they actually get another chance when there’s a reinspection of that premises. They’ll get another notice, and then after that, they may get fined.”
Schulman likens the process to a two-strike system, one strike for the initial infraction and the second if the operator is not evicted. The first fine will begin at about $5,000 with the second doubling to about $10,000. According to Schulman, the fines will only stop if the landlord can show they are actually attempting to evict the business selling the illegal product.
The politicians estimate that there are about 8,000 illegal smoke shops currently operating in the Big Apple compared to the about 20 licensed stores statewide. Chief James McCarthy, Commanding Officer, Patrol Borough Manhattan South approximates that there are 360 illegal dispensaries operating in his area of command alone. This is greatly cutting into the profits of those who were granted a license.
According to Crain’s New York Business, licensed sellers have made about $2 billion in sales since opening their doors while sales in the unlicensed market are expected to swell to a jaw-dropping $5.4 billion.
“Unlicensed vendors, undermine those who have invested in obtaining licenses, and built an infrastructure that supports social good. Legal shops, as you know, are incredibly problematic. And so, we’re working to ensure we’re doing this the right way,” Rivera said.
Those backing the new law also warned against the dangers of unlicensed dispensaries. Since these stores are unregulated, they are potentially selling untested and dangerous products, and are also more likely to be distributing them to children.
The legislation has the backing of the real estate community. Co-Chair of the Real Estate Board of New York Retail Committee Steve Soutendijk championed the move to hold landlords accountable, going as far as saying that they impact the city’s quality of life.
“We strongly condemn any property owner who knowingly leases any property for an illegal or illicit use. If a space is being utilized illegally, and an owner is aware, it is appropriate for that owner to be penalized,” Soutendijk said.
The legislation (Int. 1001-B) went into effect on July 23.
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