November crackdown on unlicensed shops in the city of the Cannabis Management Office

Today, New York state The Office of Cannabis Management (OCM) has released its second monthly series of updates on enforcement actions against unlicensed cannabis businesses across the state.

These updates will be released on the first Monday of each month until the end of the year.

Checks and Seizures: During the month of November, investigators of the OCM and the Ministry of Taxes and Finance (DTF) inspected 71 shops, including 13 repeated inspections, suspected of selling unlicensed cannabis. These inspections resulted in the seizure of 812 pounds of flowers, 701 pounds of edibles, and 61 pounds of concentrate with an estimated value of $7,284,986. These actions brought a total of 350 inspections, 88 of which were re-inspected, and yielded more than 11,000 pounds of seized illegal cannabis, valued at more than $54 million. OCM and DTF investigators will continue to conduct weekly inspections throughout the state.

Short wins: On November 21, OCM, in partnership with the Office of the Attorney General (OAG), won its first application for emergency relief under section 16-a of the Cannabis Act, a new section of the law that just came into force this year. The victory set an important precedent that allowed the state to pursue longer-term closures of businesses found to be illegally selling cannabis. In this case, the court granted a permanent injunction and a one-year permanent injunction to shut down illegal operator David Tulley of “I’m Stuck” in Wayne County. The court agreed with the OCM and OAG that Tulley was engaged in the unlicensed sale of cannabis and rejected Tulley’s argument that the “cannabis consulting business model” did not require a license. The court’s order continued the padlocking that the court granted on an emergency basis earlier this year. An assessment of the total penalties will be completed in the coming weeks.

On November 29Thursday, OCM, in cooperation with the OAG, also successfully secured a temporary ban and a temporary/shutdown/padlock order against unlicensed operator George West of Jaydega 7.0 in Canandaigua. A hearing on the application to permanently ban and shut down Jaydega 7.0 is scheduled for next month in Ontario Superior Court.

Training for municipalities: With a continued focus on collaboration and coordination to maximize enforcement partnerships, OCM and OAG will host and audience webinar for municipalities across the state on Thursday, December 7 to provide vital education and resources on best practices and opportunities to stop illegal operators.

“As we look ahead to this next chapter in New York’s cannabis market, we continue to prioritize safety across the state by working diligently to stop illegal operators,” said Chris Alexander, executive director of The New York state Office of Cannabis Management. “The best solution to the problem of these illegal businesses is to open more legal businesses. New Yorkers want to know where their products come from and know they can count on safe, trusted, locally grown cannabis when they step into one of our legal dispensaries. We will continue to pursue sixteen illegal products, and we know that collaboration continues at all levels of government to address this public health crisis.

Fines for illegal cannabis sales start at $10,000 per day and can go up to $20,000 per day for the most egregious behavior. Removal of the order may result in an additional fine of $5,000, and controlled businesses may also be subject to additional violations and penalties under the Tax Code. Additional fines may be imposed. Implementing legislation passed in May 2023 also authorizes OCM to seek a state court order to eventually shut down businesses found to be repeat violators of the law. In addition, the law considers it a criminal offense to sell cannabis and its products without a license.

To bring many levels of government together to combat the illegal sale of cannabis, Governor Hochul announced a partnership between OCM and OAG through which municipalities across the state can receive training on how to use a specific provision – Section 16-A – of the new enforcement. a law signed by Governor Hochul in May 2023 to enforce padlock orders in state court. 16-A authorizes local governments, including county attorneys, with the approval of the OCM, to enforce padlocking injunctions against an unlicensed cannabis business found to be engaging in egregious conduct. This authority greatly increases the ability of various levels of government to work together to stop illegal cannabis operators.

In addition to these new local partnerships, the governor announced that other state agencies will now shoulder the weight of their business enforcement powers 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 this effort to ensure that businesses selling unlicensed cannabis are in compliance 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 facing tens of thousands of dollars in fines for a single inspection and violation of the law, significantly strengthening the state’s ability to intervene against those engaged in illegal sales, and reaffirms the Governor’s deep commitment to ensuring that the law is upheld and that New Yorkers are protected from potentially dangerous products.

New York State currently has 27 licenses cannabis dispensaries for adults and approved 44 Presentation of cannabis growers. All regulated, licensed dispensaries must disclose Dispensary Verification Tool sticker near their main entrance. Any cannabis store that does not display this sticker is operating without a license.

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