By: Hal C Clarke

Governor Kathy Hochul has introduced a new legislative proposal aimed at tackling the growing issue of illegal cannabis businesses in New York. According to city officials, the number of illicit pot peddlers has increased since last year, prompting the need for stricter measures, NY Post reported first

The focus of the proposed law is to impose significantly higher fines on owners of illicit cannabis shops who refuse to allow state regulators, from the Office of Cannabis Management (OCM), to inspect their operations.

The OCM regulators, though unarmed, have faced resistance from some merchants operating without a license. The state had recently passed a law to empower authorities to shut down such illegal shops, but the proposed legislation seeks to enhance the impact by imposing more severe fines on non-compliant owners. New York City Sheriff Anthony Miranda emphasized the importance of fines having a substantial impact on operations, stating, “Fines can’t be the cost of doing business.”

Under Governor Hochul’s proposed law, fines for businesses refusing entry to regulators would quintuple. The current fine of $4,000 for a first refusal would increase to $20,000, and subsequent refusals could result in fines ranging from $8,000 to $40,000. This move is part of the ongoing efforts by the state to curb the proliferation of illegal cannabis sellers, a problem that critics argue was not adequately addressed when the recreational use of marijuana was legalized in 2021.

Miranda estimated that there are currently around 2,000 merchants selling illicit cannabis in New York City alone, indicating a significant increase from the 1,500 reported the previous year. The prevalence of these unlicensed businesses, concentrated mainly in the city, poses challenges to the budding legal cannabis industry, which is already grappling with lawsuits and other obstacles.

Governor Hochul’s spokesperson, Jason Gough, emphasized her commitment to cracking down on illegal cannabis shops that violate the law and harm the legal adult-use industry. Last year, the governor signed a new law to aid state agencies in shutting down unlicensed stores, and this year, she included additional legislation in her budget to strengthen these efforts.

Apart from imposing higher fines, the proposed measure, integrated into Hochul’s executive budget, aims to enhance OCM’s authority to quickly seal a building housing an illicit cannabis operation after issuing a notice of violation. If OCM deems the business an imminent threat to public health and safety, it could issue and execute a seal order immediately, with a hearing held within three days.

In a nod to New York City Mayor Eric Adams, the bill also grants localities the power to adopt their own laws to close unlicensed shops, seize and destroy illicit cannabis, and establish civil penalties against illegal operators. This provision enables cities to impose fines and collect revenue directly from illegal operators, addressing the concern that these businesses operate on a cash basis and evade cannabis sales taxes.

Sheriff Miranda highlighted the impact of illegal shops on the legal market, emphasizing that they do not contribute to state taxes and often pose risks to consumers. He cited an incident where three teenage girls fell ill after consuming cannabis from an illegal shop, underscoring the lack of product testing by the state in such establishments.

In summary, Governor Hochul’s proposed legislation aims to combat the growing issue of illegal cannabis businesses in New York by significantly increasing fines for non-compliance, enhancing regulatory authority, and empowering localities to take additional measures against unlicensed shops.