New York state officials have ordered multiple unlicensed cannabis dispensaries illegally selling recreational marijuana to shut down and stop sales or risk thousands of dollars in daily fines.
The state Office of Cannabis Management and the state Department of Taxation and Finance inspected several cannabis dispensaries this week operating in the cities of Ithaca and Binghamton without a license and seized their illegal supply of cannabis products, according to Gov. Kathy Hochul’s office.
Enforcement teams issued Notices of Violation and Orders to Cease Unlicensed Activity to three Ithaca dispensaries, including Black Leaf, at 103 E. State St.; Zaza Convenience, at 101 E. State St.; and The Rezz, at 312 Fourth St.
Two improperly licensed shops in Binghamton were also inspected and issued similar orders at Green Magic, 144 Henry St.; and Takeoff 2, at 63 Chenango St.
“As the most equitable cannabis industry in the nation gains momentum, we continue to take action against bad actors who seek to skirt around our laws,” Hochul said Thursday in a statement. “Unlicensed dispensaries violate our laws, put public health at risk and undermine the legal cannabis market, and we will continue to take these critical enforcement measures to protect New Yorkers from illicit, unregulated sales.”
Penalties cost at least $10,000 per day with potential additional consequences. Each business’s penalty will be determined through an administrative hearing process, according to the governor’s office.
The businesses may also be subject to additional violations and penalties under the Department of Tax and Finance Law.
“We do not allow bars and restaurants to operate here in New York without proper licensing and the same is true for cannabis shops,” Binghamton Sen. Lea Webb said. “My Senate district is home to two of the first adult-use dispensaries to open their doors in upstate New York, one in the city of Binghamton and the second in the city of Ithaca. These business owners have worked hard to obtain legal licenses to sell cannabis, create new jobs in our community, and support our local economy. I appreciate my colleagues and Governor Hochul’s commitment to protecting our state’s investment in our cannabis industry, which not only helps grow our local economy, but also supports New York’s agricultural producers and folks who have been disproportionately harmed by the criminalization of cannabis.”
The Office of Cannabis Management and Taxation and Finance Department were authorized to enforce a crackdown on illegal marijuana storefronts and sales after changes in the state budget adopted last month allow the state agencies to take action on unlicensed cannabis businesses without depending on local law enforcement. The budget allows OCM to assess civil penalties against these illegal dispensaries with fines up to $20,000 per day and to begin the forced closure of retail locations operating without a license.
The new law permits the Department of Taxation and Finance to conduct regulatory inspections of cannabis businesses to determine the appropriate taxes have been paid and, if not, to levy civil penalties. It also made it a tax fraud crime for businesses that knowingly fail to collect the required cannabis taxes, or intentionally keep funds from required taxes on cannabis sales.
Enforcement teams will revisit the stores to ensure illegal cannabis sales have ended. If they have not, OCM can petition the state Supreme Court to order the retail space be padlocked shut until the location complies with the cannabis law and regulated regulations, according to Hochul’s office.
“I strongly believe in the legislation that passed to legalize the use, possession and sale of cannabis in New York,” Ithaca Assemblywoman Anna Kelles said. “One of the most important aspects was to make amends for a long history of criminalization and incarceration with a disproportionate impact on low income black and brown communities. The state is working to rectify this wrong through the legal licensing process that is underway for the sale of cannabis. The illegal sale of cannabis is directly undermining this important effort.”
Enforcement officials will continue to inspect illegal dispensaries statewide and issue similar notices in efforts to end public illegal cannabis sales.
OCM and the Taxation and Finance Department started joint inspections of illegal dispensaries last week throughout New York City, which has the state’s highest number of unlicensed cannabis stores. Enforcement teams issued notices to 11 improper shops. Several others have been inspected in the city this week, and will continue indefinitely.
