As we recently reported (here), Governor Kathy Hochul signed legislation granting the state Office of Cannabis Management (“OCM”) certain enforcement powers with respect to unlicensed cannabis activity in the State of New York. Several of the new enforcement tools at OCM’s disposal include:
Issuing civil fines for unlicensed sellers. OCM and the New York State Department of Tax and Finance (“DOF”) new powers to conduct surprise inspections, seize illegal products, and obtain court injunctions against unlicensed sellers. New power for the DOF to fine cannabis dealers who aren’t paying the proper state taxes. A new tax fraud crime. A provision that reestablishes selling cannabis without a license as a criminal offense.
The power to levy Civil Penalties/Fines by the OCM to illicit cannabis shops can be up to $10,000 per day for anyone who cultivates for sale or sells cannabis without having appropriate registration, with an additional civil penalty up to five (5) times the revenue from the prohibited activities possible as well. Additionally, if the shop ignores the demand to cease illicit activities, the civil penalty may be increased up to $20,000 per day.
New York and the OCM have started the crackdown on illicit shops in earnest this
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