Governor Hochul signs legislation to take action against unlicensed cannabis retailers

ALBANY, NY- New legislation signed by Governor Kathy Hochul would fine unlicensed cannabis dispensaries up to $20,000 per-day.

The move gives more teeth for the Office of Cannabis Management and the Department of Taxation and Finance to enforce the new regulatory requirements and close stores engaged in the illegal sale of cannabis.

"As New York State continues to roll out a nation-leading model to establish its cannabis industry, these critical enforcement measures will protect New Yorkers from illicit, unregulated sales," Governor Hochul said.

"Unlicensed dispensaries violate our laws, put public health at risk, and undermine the legal cannabis market. With these enforcement tools, we're paving the way for safer products, reinvestment in communities that endured years of disproportionate enforcement, and greater opportunities for New Yorkers.”

This legislation also makes it a crime to sell cannabis and cannabis products without a license.

The legislation empowers the Office of Cannabis Management and the Department of Taxation and Finance to curb the sale and/or gifting of cannabis from unlicensed storefronts and trucks across New York State.

Specifically, this change to state law will allow the Office of Cannabis Management to assess civil penalties against unlicensed cannabis businesses that would undercut their efforts, with fines of up to $20,000 a day for the most egregious conduct. 

Additionally, this legislation will bolster the Office of Cannabis Management's ability to conduct regulatory inspections of businesses selling cannabis and cannabis products, as well as businesses that sell and give away cannabis and cannabis products in indirect ways, such as so-called "sticker shops."

The Office of Cannabis Management will seize untested cannabis and cannabis products from unlicensed businesses, and will seek court-orders, closing orders, and removal of commercial tenants who are selling cannabis and cannabis products without the appropriate license.

The Department of Taxation and Finance will now be able to conduct regulatory inspections of businesses selling cannabis to determine if appropriate taxes have been paid and will be able to levy civil penalties in cases where appropriate taxes have not been paid.

The legislation also establishes a new tax fraud crime for businesses that willfully fail to collect or remit required cannabis taxes, or knowingly possess for sale any cannabis on which tax was required to be paid but was not.

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