New York prosecutor begins crackdown on illegal cannabis shops with $400K deal with shop owner

NEW YORK — A New York City entrepreneur who illegally sold marijuana at a dozen shops across Manhattan must pay more than $400,000 in taxes and proceeds from illicit sales of cannabis, as part of a crackdown on the thousands of unlicensed operations across the city.

The Manhattan District Attorney’s Office announced Tuesday that business owner Rami Alzandani would not face litigation as part of a non-prosecution agreement. He can keep his stores open but can no longer sell cannabis products.

The state of New York’s Office of Cannabis Management has now issued more than 250 licenses for entrepreneurs to open storefronts to sell cannabis in all of its forms, including edibles, flowers and vapes.

Azandani must pay $103,000 in restitution to the state Department of Tax and Finance and must also forfeit an additional $300,000 in illegal proceeds, the district attorney’s office said.

Last month, Gov. Kathy Hochul announced the seizure of $11 million worth of illicit products from 33 storefronts during a recent sweep of unlicensed stores in New York City, Ithaca and Binghamton.

Since New York legalized recreational marijuana two years ago, relatively few of the stores that have received licenses to operate have opened, allowing illicit shops to continue to prosper.

Manhattan District Attorney Alvin Bragg said that public safety is undermined “when there is such a huge proliferation of unlicensed and unregulated storefronts selling cannabis products that have not been properly inspected.”

His office said that it is pursuing other criminal investigations and is “in active conversations” with landlords to evict shops in violation of state law.