New York Cracks Down on Unlicensed Cannabis Sales

The New York Police Department (“NYPD”) crackdown on unlicensed cannabis sales comes as New York is poised to start awarding Conditional Adult Use Retail Dispensary (“CAURD”) licenses in the coming weeks. The Office of Cannabis Management (“OCM”) has stated on numerous occasions that those caught selling cannabis without a CAURD license, or a medical license, may be permanently barred from receiving any form of cannabis license in New York State.

Back in February 2022, officials with the OCM publicly identified fifty-two (52) businesses that have been sent cease-and-desist orders directing the shops to stop all illicit cannabis sales. Several operations have moved to preempt the legalization process through the use of membership or donation models which we previously discussed in detail here. The cease-and-desist letters sent by the OCM noted that the continued illicit sales of marijuana will make the businesses ineligible to receive a cannabis business license from the agency in the future.

“These stores are masquerading as licensed, regulated businesses, but they are nothing of the sort. They aren’t creating opportunity, they are creating confusion – New Yorkers think they’re buying a high-quality, tested product when they aren’t,” said Chris Alexander, executive director of the Office of Cannabis Management. “Not only are these stores operating in violation of New York’s Cannabis Law, but they also are breaking state tax and several municipal laws. I look forward to working with other regulatory bodies across the state to hold these stores accountable for their flagrant violations of the law.”

With the window to apply for a CAURD license opening today, August 25 (and extending through September 26), the NYPD and OCM have ramped up their crackdown on illegal vendors again. On August 17, 2022, the NYPD seized nineteen (19) illegal cannabis trucks and vendors. According to the NYPD Chief of Patrol Jeffrey Maddrey, the trucks did not have licenses from the Department of Health and the seizures were part of efforts to address quality-of-life issues in New York City after 311 complaints.

Back in June 2022, the NYPD also seized a dozen or so of the Weed World trucks that you have probably seen lining the streets of Midtown. The NYPD attributed those seizures to parking debt, but it is obvious that there was an underlying motivation. Additionally, last week Mayor Eric Adams said that the City is also working to identify brick-and-mortar stores selling marijuana and to confiscate illegal products– not just the trucks that clearly advertise marijuana sales (i.e., Weed World).

Experts have projected that the New York’s legal cannabis industry is likely to be worth around $1.3 billion annually once legal sales begin. The powers that be do not want illegal vendors cutting into the state and government’s revenue, and NYPD and OCM will take any and all action to prevent that from occurring. Hence the crackdown. Those who are selling cannabis without a license risk losing out on the incredible business opportunity of obtaining a CAURD license or a non-conditional retail license.

As stated above, the OCM will begin accepting applications for CAURD Licenses on August 25, 2022 and we strongly recommend contacting an experienced New York cannabis attorney (including us!). If you are weighing your options, we understand that the timing and delays in obtaining a license can be frustrating, but as they say– a little patience goes a long way.

For more on CAURD, check out the following posts:

New York CAURD Application Portal FAQ
New York’s Conditional Adult Use Dispensary License
New York CAURD: License Application Scoring — Part 1
New York CAURD: License Application Scoring and Selection — Part 2
Hire a New York Cannabis Attorney

The post New York Cracks Down on Unlicensed Cannabis Sales appeared first on Harris Bricken Sliwoski LLP.

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