Gov. Kathy Hochul announced results of new enforcement actions to crack down on illegal cannabis shops in New York. Hochul said those stores are a barrier to creating a thriving and equitable cannabis industry.
"They are driven by individuals who are flagrantly violating the law," Hochul said. "They are creating competition where there should be none."
The governor cautioned of health risks to consumers as illegal stores do not have state-tested and regulated products.
"This does not have the New York State seal of approval," Hochul said. "You do not know what the product could possibly be laced with or have other contaminants. That is a risk that people should not be able to take."
Unlicensed businesses are now subject to fines of $10,000 a day — the fine can double to $20,000 a day if businesses continue to sell after a violation is affixed to their window. Additionally, if unlicensed businesses continue selling after they receive a violation, the state can pursue a court order to shut them down and padlock the store.
Hochul said illegal shops deny the state tax revenue anticipated from legitimate dispensaries as 40% of the revenue goes to the Community Reinvestment Fund, which helps communities affected the most by the heavy enforcement of cannabis sales in the past.
"We also want to use the rest of the money for public education, safety, protect our kids," Hochul said. "Illegal sales aren't just unfair and unsafe, they're also unjust."
Legal cannabis dispensaries will have a verification tool near their entrance with a QR code that can be scanned to confirm the store is state-licensed. The state recently confiscated 1,000 pounds of cannabis from 31 businesses across the state — an estimated value of close to $11 million over a two-week period.
"We're building an equitable system like no other, something we all should be proud of," the governor said. "Let people know we have zero tolerance for the bad actors who are standing in our way of full success."
The New York state budget includes $5 million for additional Office of Cannabis Management Staff to enforce regulatory requirements and close down illicit stores.
