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Gov. Hochul Proposes Legislation Aimed at Curbing Unlicensed Smoke Shops

S.J. Steinhardt
Published Date:
Mar 24, 2023


New York Gov. Kathy Hochul has proposed legislation to increase civil and tax penalties for the unlicensed and illicit sale of cannabis in New York, and to empower the Office of Cannabis Management (OCM) and the Department of Taxation and Finance (DTF) to enforce the new regulatory requirements and close stores that sell cannabis products illegally, Crain’s New York Business reported.

The proposed legislation would amend the tax law and the cannabis law to enable the OCM, DTF and local law enforcement to enforce restrictions on unlicensed storefront dispensaries. The legislation does not apply to individuals possessing cannabis for personal use.

“The continued existence of illegal dispensaries is unacceptable, and we need additional enforcement tools to protect New Yorkers from dangerous products and support our equity initiatives,” the governor said in a statement. “I am proud of our continued progress creating the entirely new legal cannabis industry and helping legal dispensaries open their doors to offer safer cannabis products to New Yorkers."

The legislation would allow the state to shut down illegal cannabis storefront dispensaries as quickly as possible, with offending outlets liable for fines. Stores could be fined more than $10,000 per day for unlawful activities.

“The success of New York's historic equity-based approach to the cannabis industry depends on upholding our cannabis laws,” OCM Executive Director Chris Alexander said in a statement. “Entrepreneurs looking to participate in our legal cannabis industry—especially justice-involved individuals looking for a CAURD [conditional adult-use retail dispensary] license—are being economically harmed by bad actors filling their storefronts with products that are questionable, unregulated and potentially dangerous. The Office of Cannabis Management is fully committed to working with our partners across the state to permanently shut these operations down and allow legal, licensed businesses to grow and thrive.”

City officials estimated that there are between 1,200 and 1,500 unlicensed shops in operation since the state legalized recreational cannabis in 2021, Crain's reported.

Last month, Mayor Eric Adams and Manhattan District Attorney Alvin Bragg held a joint press conference to announce crackdowns on illegal smoke shops selling cannabis without a license. The city commenced lawsuits against four East Village shops accused of selling cannabis to undercover officers and implicating their respective landlords as defendants, while Bragg sent letters to 400 suspected illicit stores, threatening to force their landlords to evict them.