New York Legislators Seek to Prevent Marijuana Profits from Funding Middle East Terrorism

Edited by: TJVNews.com

New York legislators are raising concerns that the proliferation of illegal marijuana shops in the city could potentially serve as a source of funding for Middle East terror groups, as was reported by the New York Post on Thursday. As a response to these fears, they are pushing for legislation aimed at unearthing rogue financiers behind these operations.

Owners of illegal marijuana shops, which some city officials estimate to number in the thousands, have managed to remain under the radar due to local laws governing Limited Liability Companies (LLCs), according to the Post report. LLCs are legitimate business structures that offer tax benefits and liability protection. However, they can also be misused for tax evasion, money laundering, and other criminal activities, including potential links to terrorist financing, the Post report added.

State Sen. Brad Hoylman-Sigal, who is the lead sponsor of the LLC Transparency Act, expressed concerns about the potential abuse of LLCs. The Post reported that he explained, “We know LLCs are used to hide and funnel money to unsavory causes and could be used to fund terrorist activities.” Hoylman-Sigal emphasized the need to uncover the true owners of these businesses to determine if any are involved in financing terrorism.

In June, the New York legislature passed a bill known as the LLC Transparency Act. If signed into law by Governor Kathy Hochul by the end of the year, it will require LLCs to disclose the real identities of their owners, as was noted in the Post report. This information, including names, addresses, and birth years, will be made publicly available in a database.

Despite the potential benefits of this legislation in preventing illegal financial activities, it faces opposition from various quarters. The Post report indicated that some of Governor Hochul’s influential supporters, including business and real estate lobbyists, are opposed to the bill. One of the reasons for this opposition is the extensive use of secretive LLCs in the New York real estate market, which has long been a driving force behind the industry.

A study conducted last month found that as much as 37% of Manhattan properties are owned by LLCs. As was noted in the Post report, these entities have historically been used by individuals such as Russian oligarchs, narcotraffickers, money launderers, and potentially even terrorists to conceal their financial interests.

Simultaneously, New York City is grappling with the rapid expansion of illegal marijuana shops. The Post report said that Mayor Eric Adams has stated that there are approximately 1,500 of these unlicensed establishments, while the city council estimates the number to be closer to 8,000.

State Sen. Liz Krueger, who sponsored the legislation regulating and taxing marijuana following its legalization for recreational use in 2021, expressed her surprise at the exponential growth of these illegal pot shops, according to the Post report. In response, she is advocating for increased transparency laws that address the ownership of these establishments.

It is believed that the profits generated by illegal marijuana shops in New York may not only be funding local criminal activities but could also have ties to international terrorism financing. The Post noted that despite the speculative nature of the intel, there have been indications that some of the marijuana supplied to these shops is linked to Chinese criminal networks.

The Chinese rogue financiers who supply marijuana to these illegal shops have historically conducted business with Lebanese money-laundering networks, according to information obtained by the Post.  This connection raises concerns about potential links to Iran-backed terror group Hezbollah, which has been involved in acts of aggression in the Middle East.

Hezbollah, a Lebanon-based organization, has been responsible for launching missiles into Israel in response to the growing conflict between Israel and Hamas, which began with the Hamas attack on October 7, the Post report said. This raises the possibility of a connection between marijuana profits and the funding of terrorist groups.

Lebanese Hezbollah has supported the Houthi rebels during their extended conflict with Saudi Arabia in Yemen, the Post reported. The Yemeni American Merchants Association, which represents many smoke shops in New York City, including those selling marijuana, has not issued a response regarding these concerns.

The financial dealings of these smoke shops are further complicated by the fact that most banks are unwilling to accept money from cannabis-related businesses due to the federal illegality of marijuana, the Post report said. Those banks that do work with such funds often impose significant fees for basic services, making it challenging for business owners to handle their earnings.

This issue highlights the need for legislation aimed at promoting transparency and accountability in the rapidly growing marijuana industry, ensuring that profits do not end up in the wrong hands, including those with ties to terrorism.