New York Weed Shops Owe More Than $25 Million in Fines.
The state of New York has imposed more than $25 million in fines against unlicensed smoke shops trading cannabis products since last year, but so far only a tiny per cent of those fines have been amassed by the state Tax Department and the Office of Cannabis Management.
The two agents were awarded more significant power last year to enforce the 2021 cannabis law and as a result, began coordinated raids against unlicensed smoke shops selling cannabis products last summer.
The Office of Cannabis Management (OCM) has claimed to have collected $22,500 in fines from unlicensed shops whilst The Department of Taxation and Finance has collected $0 in fines so far.
Last October, it was reported that the state cannabis agency had cited a lack of resources and paused the enforcement hearings that follow raids on unlicensed shops. Lawyers for unlicensed shops told reporters at the time that they had obtained notices on behalf of their clients that the cases were being revoked. Meanwhile, however, the raids have continued. Whilst OCM has removed many cases, some shops and their operators have received separate letters from the tax department cautioning them of fines of more than $150,000.
“Currently, the State is prioritizing shutting down illegal shops and seizing unlawful products, While we recognize entities being fined have a right to due process, we are committed to working within the confines of the law to collect the fines once the legal process is complete.” - Aaron Ghitelman, OCM Spokesman.
Ghitelman added that the state has seized tens of millions of dollars in illegal products under enforcement measures. The absence of fines collected so far emphasises the challenge of implementing the cannabis law in a state that has a booming grey market.
In New York City alone, unlicensed shops are rife throughout some areas. Although there is no official count of the number of unlicensed smoke shops, it is gauged to easily be in the thousands. Last month, it was reported by a local news outlet CNY Central that OCM has a staff of only 14 investigators.
The two state agencies already mentioned are not the only ones pushed to enforce the new legislation. The Sheriff’s Department is also reviewing smoke shops in New York City and the NYPD has done its undercover checks of shops that are suspected of selling cannabis to underage patrons.
In the annual State of the State address last month, the governor commented that she would be seeking new enforcement powers as part of this year's annual budget. The chair of the Senate Cannabis Committee, Sen. Jeremy Cooney agreed that more enforcement controls are needed, but that the effort has to pair up with the opening of new stores.
“The way forward is to make sure that we have more legal stores operating on our streets It’s a parallel track – one is to close down stores and make sure enforcement is happening, the other is to make sure that new ones are opening. Cooney told a regional news outlet in an interview.
At a Senate hearing in late October 2023, it was claimed that fines were not enough to prevent unlicensed shops. OCM as a result are looking to expand enforcement powers to close stores instead of issuing fines.
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Liz Filmer
