New York State Office of Cannabis Management and Department of Taxation and Finance Inspected Unlicensed Shops
Illicit Products Were Seized, Initiating the Process of Shutting Down Unlicensed Cannabis Sales in Storefronts
Actions Are Direct Result of Empowering Legislation Governor Hochul Signed into Law in the FY 2024 Budget
Governor Kathy Hochul today announced enforcement teams from New York State's Office of Cannabis Management and Department of Taxation and Finance conducted inspections at storefront businesses not licensed to sell cannabis in Ithaca and Binghamton. These actions led to Notices of Violation and Orders to Cease Unlicensed Activity being issued, building on actions taken in New York City last week, and they will continue to be replicated across the state to end public sales of illicit cannabis by any unlicensed businesses. State enforcement actions were made possible as part of the FY 2024 Budget Governor Hochul signed into law last month.
"As the most equitable cannabis industry in the nation gains momentum, we continue to take action against bad actors who seek to skirt around our laws," Governor Hochul said. "Unlicensed dispensaries violate our laws, put public health at risk, and undermine the legal cannabis market, and we will continue to take these critical enforcement measures to protect New Yorkers from illicit, unregulated sales."
On May 3, 2023, Governor Hochul signed legislation enabling for the enhanced, statewide enforcement by OCM on unlicensed cannabis businesses as part of the FY 2024 Budget. The legislation now enables OCM to also assess civil penalties against unlicensed cannabis businesses, with fines of up to $20,000 a day for the most egregious conduct, and starts the process of potential closure of a retail location selling cannabis without a license among other penalties. The new law 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 now conduct regulatory inspections of businesses selling cannabis to determine if appropriate taxes have been paid and to levy civil penalties in cases where they have not. 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 cannabis businesses, New York State is making a significant stride toward cracking down on unlawful cannabis operations that jeopardize public safety, consumer well-being, and the integrity of New York State's legal cannabis market.
On Tuesday, OCM and DTF conducted inspections on three businesses in Ithaca. Each of the locations was issued a notice of violation for selling cannabis without a license. The penalty for this, which will ultimately confirmed through an administrative hearing process, is $10,000 per day, plus potential additional penalties. The inspected businesses may also be subject to additional violations and penalties under the Department of Tax and Finance Law.
The following shops were inspected in Ithaca:
- Black Leaf -- 103 East State Street, Ithaca, NY
- Zaza Convenience -- 101 East State Street, Ithaca, NY
- The Rezz -- 312 Fourth St, Ithaca, NY
Yesterday, OCM and DTF conducted inspections in Binghamton. As in Ithaca, both locations were issued a notice of violation for selling cannabis without a license with. The penalty for this, which will ultimately confirmed through an administrative hearing process, is $10,000 per day, plus potential additional penalties. The inspected businesses may also be subject to additional violations and penalties under the Department of Tax and Finance Law.
The following shops were inspected in Binghamton:
- Green Magic - 144 Henry St
- Takeoff 2 - 63 Chenango St
State Senator Lea Webb said, "We do not allow bars and restaurants to operate here in New York without proper licensing and the same is true for cannabis shops. My Senate district is home to two of the first adult-use dispensaries to open their doors in Upstate New York, one in the City of Binghamton and the second in the City of Ithaca. These business owners have worked hard to obtain legal licenses to sell cannabis, create new jobs in our community, and support our local economy. I appreciate my colleagues and Governor Hochul's commitment to protecting our state's investment in our cannabis industry, which not only helps grow our local economy, but also supports New York's agricultural producers and folks who have been disproportionately harmed by the criminalization of cannabis."
Additional information on fines:
If an unlicensed location is found to continue selling cannabis products after OCM issues a Notice of Violation/Order to Cease, an additional per-day penalty of up to $20,000 may be assessed by an ALJ. Further, should the unlicensed business remove the OCM Notice of Violation or Warning affixed to the business storefront, the business is subject to a fine of up to $5,000.
Additional information regarding previous and ongoing operations in New York City:
OCM and DTF began their first joint inspections authorized by the new enforcement law the week of June 5, 2023, in New York City, where inspections will remain active and ongoing. The two agencies inspected 11 shops in Manhattan last week, have inspected several more this week, and will continue to do so.
All of the shops inspected in New York City last week were selling cannabis without a license and, upon inspection, were issued Notices of Violation and Orders to Cease Unlicensed Activity.
The following shops were inspected last week:
- Varieties on Broadway - 736 Broadway
- Roll 2 Nation - 738 Broadway
- Baby Jeeter - 793 Broadway
- Maze - 16 St. Marks Place
- LaGuardia Smoke - 510 LaGuardia Place
- Nomad - 59 West 30th Street
- Play lane - 117B W 23rd Street
- Cannabis Culture - 403 8th Avenue
- Smoke Factory - 287 7th Avenue
- Go Green Dispensary - 603 6th Avenue
- Daydream - 1181 Broadway
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