New York Launches Enforcement Crackdown on Unlicensed Marijuana Shops

Regulators promise that this move is the first volley in stepped up enforcement against the illicit market.

New York state authorities have begun what they say will be a sweeping crackdown on the 1,500 or more unlicensed marijuana businesses that have sprouted up over the past year, with surprise inspections and cease-and-desist orders issued at seven retail shops in New York City on Wednesday.

The new enforcement push relies on an interagency task force, comprised of agents from the New York State Office of Cannabis Management and the state Department of Tax and Finance, which began its new war on the underground market in New York City with violation notices to all seven of the shops inspected.

The agents also seized an undisclosed amount of illegal marijuana.

The notices could result in fines of up to $10,000 or more, according to an email from the OCM, but the precise amount is yet to be determined by an administrative process.

If the shops ignore the warnings to shut down, additional fines of up to $20,000 per day can be levied, the OCM said, along with even more penalties from the DTF. The locations can also be fined $5,000 per day if they remove OCM violation or warning notices posted on the front of the shops.

The stores could also be padlocked by the OCM if they refuse to comply with cease-and-desist orders, but that requires a court order.

“These enforcement actions are critical steps to protect and help those individuals who were promised a shot to start a legal business and be successful,” Gov. Kathy Hochul said in a press release.

The move comes barely a month after Hochul signed into law a state budget that bestowed new enforcement powers on the OCM and other agencies, including the ability to levy fines on unlicensed cannabis merchants, and criminalizing unlicensed sales.

But with an estimated 1,500 unlicensed shops in New York City alone, it will likely take the OCM and Department of Tax and Finance a while to shutter all of the stores. It’s also not clear how many may put up a fight or simply pay the fines and continue operating, as several industry experts have suggested may happen.

The seven locations that were inspected and cited were all in lower Manhattan, and include:

  • 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 W. 30th St.
  • Play Lane, 117B W. 23rd St.

“The successful enforcement actions against unlicensed storefronts and trucks selling cannabis in New York City serves as a clear message that New York State is actively taking action against illicit operators,” Tremaine Wright, the state Cannabis Control Board chairwoman, said in a statement.

OCM Executive Director Chris Alexander also promised this is only the beginning, and said the new enforcement powers will allow the agency to “take meaningful action against illegal cannabis operations.”

John Schroyer

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