Hochul announces start of state interagency enforcement actions against unlicensed cannabis businesses

Gov. Kathy Hochul today announced the launch of an interagency initiative to cease the sale of untested cannabis from unlicensed storefronts and trucks. Enforcement officers from the New York State Office of Cannabis Management and Department of Taxation and Finance conducted inspections storefront businesses not licensed to sell cannabis and issued notices of violation and orders to cease unlicensed activity, when appropriate. These actions will be replicated across the state to end public sales of untested cannabis by unlicensed businesses. As part of the fiscal year 2024 budget, Hochul signed legislation allowing for these expanded enforcement actions against unlicensed cannabis businesses to take place.

"New York is proud to have undertaken the most equitable legal cannabis roll-out in the nation, and the state will not stand idle as unlicensed operators break the law and sell untested products to underage New Yorkers," Hochul said. "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. Additionally, these unlicensed operators undermine the state's efforts to generate substantial funds for a social equity fund that will go into the communities that have been hardest hit by over-prosecution of the cannabis laws in the past."

Hochul signed legislation allowing for enhanced enforcement of unlicensed cannabis businesses as part of the FY 2024 budget. Her team said, “The legislation allows 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. It also makes it a crime to sell cannabis and cannabis products without a license.

“As a result of the legislation, the Department of Taxation and Finance can also conduct regulatory inspections of businesses selling cannabis to determine if appropriate taxes have been paid, and 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.

“By taking decisive action against unlicensed dispensaries, New York state is taking a significant stride towards eradicating unlawful cannabis operations that jeopardize public safety, consumer well-being, and the integrity of New York state's legal cannabis market. This hybrid approach aims to foster a fair and regulated market environment, ensuring consumer protection and bolstering support for licensed cannabis businesses.”