New York Cracks Down on Illegal Cannabis Businesses

It has been nearly a year since New York legalized recreational pot, but the state made it clear on Tuesday that unlicensed weed sales are still a no go.

New York’s Office of Cannabis Management said it sent letters to businesses it suspects of illegally selling cannabis, often done through the practice of “gifting,” in which a retailer sells a membership or service and then “gifts” the customer some cannabis in return.

The OCM said it told those businesses “to cease and desist those operations or risk the opportunity to get a license in the legal market as well as substantial fines and possible criminal penalties,” while explaining that “while cannabis has been legalized for those aged 21 and over, selling it requires a license under the law.”

“We want to make sure these operators fully understand the law and the consequences they face, and now that these letters have been sent, we fully expect them to cease and desist their activities—if they don’t, we will take action,” said Office of Cannabis Management Executive Director Chris Alexander in a statement. 

“New York State is building a legal, regulated cannabis market that will ensure products are tested and safe for consumers while providing opportunities for those from communities most impacted by the over-criminalization of the cannabis prohibition and illegal operations undermine our ability to do that. We encourage New Yorkers to not partake in illicit sales where products may not be safe and we will continue to work to ensure that New Yorkers have a pathway to sell legally in the new industry.”

A sample of the one-page letter sent to those businesses was posted on OCM’s website. In it, the agency spells out the terms of the new cannabis law passed in March of last year, which established “the parameters under which a regulated, safe, and legal cannabis industry will operate in New York State” but that “clearly states that any unlicensed sale of cannabis is illegal.”

“It has come to the attention of the Office of Cannabis Management that you are engaging in unlicensed cannabis sales, or that unlicensed sales are occurring on your property,” the letter reads. 

“You are hereby directed to cease any, and all, illegal activity immediately. Failure to cease this activity puts your ability to obtain a license in the legal cannabis market at substantial risk,” the letter says in cnlosig. “The unlicensed sale of cannabis is illegal and subjects you to substantial fines and possible criminal penalties. If you are a landlord hosting illegal activity on your premises, you are jeopardizing your ability to house a licensed retail dispensary or on-site consumption lounge in the future.”

New York legalized recreational pot use for adults aged 21 and older when then-Governor Andrew Cuomo signed a bill into law. Many parts of the law took effect immediately (individuals can now legally smoke weed in public wherever cigarette smoking is permitted, for example), but the state’s regulated cannabis industry won’t open until next year. 

After Cuomo stepped down in August amid allegations of sexual misconduct, he was succeeded by new Governor Kathy Hochul, who has expressed frustration with the slow rollout and has said that getting the new cannabis market up and running is one of her top priorities. 

In September, not long after she took office, Hochul appointed two new individuals, Reuben R. McDaniel, III and Jessica Garcia, to the Office of Cannabis Management.

“New York’s cannabis industry has stalled for far too long—I am making important appointments to set the Office of Cannabis Management up for success so they can hit the ground running,” Hochul said in announcing the appointments. “I am confident Mr. McDaniel and Ms. Garcia will serve the board with professionalism and experience as we lead our state forward in this new industry.”