New York regulators raid unlicensed marijuana stores, enact new rules
New York regulators have started seizing products and issuing violations as part of a statewide initiative to rein in unlicensed marijuana operators in one of several new developments aimed at jump-starting sales in the state’s adult-use market.
Democratic Gov. Kathy Hochul on Thursday announced the launch of a multiagency enforcement effort and the first product seizures in New York City, where as many as 1,400 unlicensed stores, trucks and bodegas are selling marijuana products.
Seven stores were issued violations for selling unlicensed marijuana products and ordered to cease operations, the New York Post reported. They also each face up to a $10,000 daily fine.
The alleged offenders were:
Enforcement officers from the state’s Office of Cannabis Management (OCM) and Department of Taxation and Finance are inspecting storefront businesses not licensed to sell cannabis and issuing them “notices of violation” and “orders to cease unlicensed activity.”
Lawmakers enacted the new measures in May as part of legislation that makes it a crime to sell marijuana products without a license.
The new law also allows the OCM to impose fines of up to $20,000 a day.
And it permits the tax and finance department to issue civil penalties to businesses that don’t pay applicable marijuana taxes and creates a new tax fraud crime for businesses that don’t collect or remit required MJ taxes or sell untaxed cannabis.
“These enforcement actions are critical steps to protect and help those individuals who were promised a shot to start a legal business and be successful,” Hochul said in a statement.
The enforcement developments came a day after the OCM announced that retail stores will open this month in Farmingdale and Syracuse.
The scheduled openings are the first in the Central New York region and on Long Island, where the vast majority of towns and cities have opted out of retail.
Only 13 retailers have been licensed since the Dec. 29 launch of recreational marijuana sales in New York, widely missing market expectations touted by the governor and regulators leading up to adult-use sales.
State officials this week also outlined several changes to the Conditional Adult-Use Retail Dispensary (CAURD) program, which was established to enable applicants with low-level marijuana offenses and/or their family members to enter the legal industry.
Changes include:
The changes follow news that regulators and lawmakers are paving a path for multistate operators to enter the recreational market by year’s end – two years before originally planned – in an effort to stabilize the shaky rollout of New York’s adult-use marijuana program and energize a supply chain that currently offers limited business opportunities.
The OCM also announced that Stage One Cannabis in Rensselaer and Half Island Flavors in the Bronx will launch delivery services in June.
Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.