New York Gov. Kathy Hochul on Wednesday signed into law a bill to govern the state’s illegal marijuana market, including fines of up to $20,000 a day for unlicensed cannabis retailers. The law, which raises civil and tax penalties for the illegal sale of cannabis in New York State, was passed as part of the state budget for fiscal year 2024.
Hochul first proposed new measures to address New York’s underground cannabis market in March as a way to support the emerging recreational marijuana industry, which will be legalized by the state legislature in 2021. It’s 2022, but so far only a handful of licensed clinics have opened statewide. A recent law enforcement investigation identified at least 1,200 illegal pot shops in New York City.
“As New York State continues to deploy a nationally-leading model for establishing the cannabis industry, these important enforcement actions will protect New Yorkers from illegal and unregulated sales.” Hochul said in a statement May 3rd. With these enforcement tools, we are paving the way for safer products, reinvesting in communities that have endured years of disproportionate enforcement, and greater opportunities for New Yorkers. ”
Law gives new enforcement power
The new law provides additional enforcement powers to the New York Office of Cannabis Control (OCM) and the Department of Taxation and Finance (DTF) to enforce regulatory requirements and close stores engaged in the illegal sale of cannabis. A new law allows OCM to impose civil penalties on unlicensed cannabis businesses, with the “most egregious” illegal operators facing fines of up to $20,000 per day. The law also makes it a crime to sell cannabis or cannabis products without a license.
The law also gives OCM new powers to conduct regulatory inspections of businesses that sell cannabis and cannabis products, including so-called gift shops that offer cannabis in exchange for frivolous goods. Authorities have the power to seize untested cannabis products from unlicensed businesses, seek court orders to close unlicensed stores and evict commercial tenants selling cannabis without a license. increase.
Additionally, the DTF is now empowered to conduct regulatory inspections of businesses that sell cannabis to determine whether proper taxes are paid and to impose civil penalties on businesses that do not. The law also creates new tax fraud offenses against businesses that knowingly fail to collect or remit required cannabis taxes, or that knowingly own cannabis for sale that are required to pay taxes but were not paid. Establish
“Strengthening tax laws related to the cannabis industry and providing robust and fair enforcement will help the cannabis industry succeed over the long term,” said Amanda Hiller, Deputy Commissioner of New York State Tax and Treasurer. I was.
Elliot Choi, attorney and chief knowledge officer at cannabis and psychedelics law firm Vicente LLP, said the new measures passed into the law are good news for the regulated cannabis industry, but some of the governor’s actions said it was unlikely to have immediate repercussions for illegal activity. operator.
“Illegal pharmacies continue to proliferate in New York, especially New York City, so we welcome any move to crack down,” Choi wrote in an email. high times“The State Budget Enforcement Act includes powers for the Department of Taxation and Treasury to impose large fines. The tax department needs time to staff, and the Cannabis Administration needs to draft some regulations before cracking down on existing regulations.”
Hochul’s efforts to protect licensed cannabis retailers also include steps to reduce demand for illegal marijuana. announced a consumer advertising campaign to encourage