Governor Signs Legislation To Curb Illicit New York Dispensaries and Delivery Services

New York Governor Kathy Hochul signed legislation targeting illegal cannabis sales in the state.

by Rowan Nathan · May 04, 2023

New York Governor Kathy Hochul signed legislation targeting illegal cannabis sales. The measure explicitly makes it a crime to sell cannabis and pot products without a license, taking aim at transient weed pop-up shops, and illicit delivery services, and other unlicensed cannabis operators.

The legislation, part of the 2024 State budget, will increase civil and tax penalties, giving the Office of Cannabis Management and the Department of Taxation and Finance a vehicle to enforce against unlicensed retailers. The law grants OCM the ability to assess civil fines for unlicensed weed businesses up to $20,000 a day.

“Unlicensed dispensaries violate our laws, put public health at risk, and undermine the legal cannabis market. With these enforcement tools, we’re paving the way for safer products, reinvestment in communities that endured years of disproportionate enforcement, and greater opportunities for New Yorkers.”, Hochul proclaimed.

In addition to policing businesses which outwardly sell un-tested product, the legislation will let OCM inspect businesses like “sticker shops” which sell and give away cannabis as "gifts". The law allows OCM to seize untested flower and cannabis products from unlicensed businesses and seek court orders, closing orders, and removal of commercial tenants who sell without a license.

In cultural terms the legislation may signal the symbolic end of the "grey market", a term cannabis enthusiast and Industry insiders used in place of "black market" in recent years. The combination of decriminalization trend, lack of enforcement, personal stash laws and general acceptance of cannabis ushered in a sense of implied legality or least legal basis, especially among those attempting to will their perspective into existence. They succeeded in willing the term "grey market" into our vernacular.
However the new legislation seeks to affirm and provide clarity on defining legal sales, and once again make this a black and white issue.

The OCM has awarded 165 licenses with more to be awarded in May 2023 at the Cannabis Control Board meeting. At the time of this article there are eight operational dispensaries in New York, and one weed delivery service in operation in the Empire state, with more set to open in the coming weeks and months.