The New York State Office of Cannabis Management (OCM) on Monday published the January enforcement action update against unlicensed cannabis shops across the state.
Inspections & Seizures: During the month of January, investigators from OCM and the Department of Taxation and Finance (DTF) inspected 60 shops, including 20 re-inspections, suspected of selling unlicensed cannabis. These inspections resulted in the seizure of 371 pounds of flower, 359 pounds of edibles, and 29 pounds of concentrate, with an estimated value of $3,391,545.
These actions bring the total of inspections to 470 locations, 125 of which have been re-inspected, to yield over 13,000 pounds of seized illicit cannabis worth more than $63 million. OCM and DTF investigators will continue inspections each and every week across the state in 2024 to shut down illicit operators as a new wave of legal dispensaries opens their doors for business.
By taking decisive action against unlicensed cannabis businesses, New York State is making significant strides toward shutting down unlawful and unlicensed cannabis operations that jeopardize public safety, consumer well-being, and the integrity the state’s legal cannabis market.
“As New York state welcomes its 50th brick-and-mortar adult-use dispensary to the growing community of small and mid-size businesses operating across the state, we are looking to seize on the massive opportunity ahead of us in 2024. We know that New Yorkers choose to shop at legal, adult-use dispensaries because they know their cannabis products were grown right here in New York, that these cannabis products have been tested, and that these small businesses are investing in our communities,” said Chris Alexander, Executive Director of The New York State Office of Cannabis Management. “We thank Governor Hochul for her steadfast commitment to making sure that our mission of delivering the most equitable adult-use cannabis market isn’t hampered by illicit operators. We will continue to seize illicit product across the state each and every week.”
Fines for the illegal sale of cannabis start at $10,000 per day and can rise up to $20,000 per day for the most egregious conduct. An additional fine of $5,000 can be levied for removal of the Order, and the inspected businesses may also be subject to additional violations and penalties under the Tax Law. The enforcement legislation passed in May 2023 also authorizes OCM to seek a State court order to ultimately padlock businesses found to be in repeated violation of the law. In addition, the law makes it a crime to sell cannabis and cannabis products without a license.
To bring many levels of government together to combat the illicit sale of cannabis, Governor Hochul previously announced partnerships between OCM and the OAG through which municipalities across the state can receive training on how to utilize a particular provision — Section16-A — of the new enforcement law signed by Governor Hochul in May 2023 to pursue padlocking orders in State Court. 16-A authorizes local governments, including county attorneys, with OCM’s approval, to pursue padlocking orders from a court against an unlicensed cannabis business found to be engaged in egregious conduct. This authority significantly augments the ability for different levels of government to work together to shut down illegal cannabis operators.
In addition to these new partnerships with localities, the Governor announced that additional State agencies will now be bringing the weight of their business enforcement powers to bear as part of the State’s creative and aggressive approach to combating the illicit market. The Department of Labor and the Workers Compensation Board are joining these efforts to ensure businesses selling cannabis without a license are compliant with New York State labor and workers compensation laws.
This approach, which combines the enforcement powers of labor law, tax law, and cannabis law, can result in non-compliant business owners potentially facing tens of thousands of dollars in penalties as the result of a single inspection and violations, significantly enhances the State’s ability to crack down on those who engage in illicit sales, and reaffirms the Governor’s deep commitment to ensuring that the law is being followed and that New Yorkers are protected from potentially unsafe products.
While these actions represent meaningful progress, Governor Hochul is working to strengthen measures to deter illicit activity and facilitate the growth of a legal market. In her 2024 Executive Budget, the Governor has proposed strengthening enforcement authority to expedite the closure of unlicensed businesses and deter this illicit activity. Measures will include expanding the powers of the Office of Cannabis Management (OCM) to streamline padlocking of illicit shops, authorizing local governments to execute OCM padlock orders to ensure swift action to close unlicensed dispensaries, and establishing local registries of licensed cannabis businesses to assist and empower local governments, including New York City, to padlock unlicensed business through their own laws and resources. These collaborative efforts will help New York’s growing legal cannabis market, which prioritizes small businesses and equity entrepreneurs.
New York State currently has 61 licensed adult-use cannabis dispensaries. All regulated, licensed dispensaries must post the Dispensary Verification Tool sticker near their main entrance. Any store selling cannabis that does not display this sticker is operating without a license.
