As New York State opens the door for more cannabis licenses, Governor Kathy Hochul is also announcing continued aggressive enforcement against the illegal sale of cannabis across the state.
Hochul said efforts by the State Office of Cannabis Management and the Department of Taxation and Finance have yielded to date the seizure of more than 8,500 pounds of illicit product with an estimated street value of more than $42 million.
She also announced new partnerships with localities that will enable them to pursue padlocking orders against businesses illegally selling cannabis from State courts, and a new multi-agency initiative to target illegal operators for labor violations, thus significantly increasing fines and penalties that businesses may face.
Hochul said she knows there’s room for improvement as the state works to launch the cannabis industry and crack down on “illicit operators,” “My Administration is laser-focused on shutting down illegal storefronts, protecting the health and safety of children, and helping small businesses thrive.”
She said the results of the last four months of aggressive enforcement against unlicensed cannabis businesses undertaken by OCM and DTF, which were granted new powers only in May of this year under a new law championed by the Governor.
Since June 7, OCM and DTF have conducted 246 inspections across the state. Businesses found to be illegally selling cannabis have been issued Notices of Violation and have also had Orders to Cease Unlicensed Activity affixed to the outside of the doors. Those businesses must now appear at an administrative hearing, where the final fines and penalties they will face will be determined.
The enforcement legislation passed in May also authorized OCM to seek a State court order to ultimately padlock businesses found to be in repeated violation of the law. In addition, the law makes it a crime to sell cannabis and cannabis products without a license.
To bring many levels of government together to combat the illicit sale of cannabis, Hochul announced new partnerships between OCM and the Attorney General’s Office through which municipalities across the state can receive training on how to utilize a particular provision — Section16-A — of the new enforcement law signed by Hochul in May to pursue padlocking orders in State Court.
16-A authorizes local governments, including county attorneys, to pursue padlocking orders based on inspections conducted by OCM and DTF without OCM having to petition the court for such an order against a business found to be engaged in egregious conduct. This authority significantly augments the ability for different levels of government to work together to shut down illegal cannabis operators.
In addition to these new partnerships with localities, Hochul announced that several additional State agencies will now be bringing the weight of their business enforcement powers to bear as part of the State’s creative and aggressive approach to combating the illicit market.
The Department of Labor and the Workers Compensation Board will join these efforts to ensure businesses suspected of selling cannabis without a license are compliant with New York State labor and workers compensation laws:
Workers Compensation Board: If a business is found to have employees and not carry workers’ compensation insurance, the WCB may impose a Stop Work Order. Penalties are issued up to $2000.00 for each 10 day period of non-compliance based on the number of employees.
Department of Labor: Payrolls will be inspected to ensure employers are paying their employees the state’s minimum wage to include any eligible overtime, employees are allowed sick time and are compliant with the New York Health and Essential Rights Act (NY HERO Act) and COVID sick pay.
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