New York’s Empire Cannabis Club Pledges to Take Regulators to Court
Source: Google Maps

The owners say they operate under a provision of the law that grants "safe harbor" to membership clubs.

Unlicensed marijuana retail chain Empire Cannabis Club – which has six locations spread around New York City – is intent on taking state regulators to court in order to prove its legality, the business owners told Forbes after several of its shops were raided earlier this month.

The case, whenever it’s brought, could mark a major milestone in Gov. Kathy Hochul’s quest to shutter the roughly 3,500 illicit shops spread across New York state. Hochul’s administration has been deploying civil fines and cease-and-desist orders as a first volley in this effort.

Empire’s owners – the Elfand family, comprised of four co-owners: Jonathan, Lenore, Blake, and Ralph – said they will defend their business model as legal, pursuant to the 2021 Marijuana Regulation and Taxation Act, which includes a “safe harbor” provision for marijuana membership clubs.

That’s precisely how the Elfands contend Empire operates – as a membership club – and therefore, they say their business is legal, and they’re looking forward to proving it in court, Forbes reported.

“We are going to court – it’s time to prove our legality, what we believed all along and how we’re operating under the law New York wrote,” Lenore Elfand told Forbes. “We have to fight, and now is our chance – they came at us.”

Lenore and Jonathan were both arrested during the raids for obstruction of justice, but only Lenore was formally charged, reported. No fines were issued on the day of the raids.

The business itself is not facing any criminal charges, and all six stores are still operational, Forbes reported. But tens of thousands of dollars worth of cannabis goods were seized by state officials from the Department of Tax and Finance, following a cease-and-desist letter from last year, and the Elfand family is ready to sue to get its cannabis back.

Jonathan Elfand told Forbes he’s confident of the company’s legal position, and if he loses, he’s ready to do time behind bars – again.

“I do everything because I know I’m right. If I am wrong somehow, and I lose, I’ll take 30 years – let’s get on with it,” he said.

The ongoing crackdown by New York authorities on the gray cannabis market could also get more complicated if a new bill by Republican state lawmakers to ban marijuana use in public wins approval.

The bill, sponsored by state Sen. George Borrello and Assemblyman Michael Novakhov, would ban all marijuana use in public and create a $125 fine for violations – a significant increase from the current $25 fine for public marijuana use.

The bill would allow local governments to establish consumption areas. Current state law allows for cannabis consumption anywhere tobacco use is allowed, which has led to an uptick in public cannabis smoking, Borrello argued.

“State residents, including children, are now regularly assailed with the pungent odor of marijuana on public sidewalks, in parking lots, and other public spaces,” Borrello said in a press release. “Many New Yorkers don’t want to be exposed to either the effects of marijuana smoke or its smell and don’t want their children subjected to it.”

The bill is likely a longshot, however, given that Democrats have solid majorities in both legislative chambers in Albany.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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