BY NICK REISMAN ALBANY/CAPITAL REGION
PUBLISHED 9:52 AM ET JUN. 22, 2023
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Over the last two weeks, New York state officials have seized 1,000 pounds of unlicensed cannabis being illegally sold in more than two dozen businesses, Gov. Kathy Hochul on Thursday said.
All told, the cannabis seized has a value of as much as $11 million, Hochul said, as New York tries to aid a fledgling legal cannabis sector.
Hochul touted the efforts to address what has been a burgeoning illegal marketplace of cannabis sales in the state after New York moved to grant licenses to legal retail sales. The illegal marketplace has been seen as a hindrance to the growth of legal cannabis businesses, which are taxed and licensed by the state.
"Sometimes it takes a while to get it right," Hochul said Thursday morning at an event in Brooklyn. "The process has not been easy."
Hochul pointed to the public health risks posed by unlicensed cannabis sales. Legal cannabis in New York is subject to industry regulations grown by licensed farmers.
Businesses affected by the early enforcement actions include those in Albany, Binghamton and Ithaca, Hochul said.
"I want to be aggressive. I want to get this done," she said. "I want to send a message loud and clear across this state: If you are operating illegally, you will be caught."
New York lawmakers and Hochul in May agreed to a package of measures to address illicit cannabis sales. Cannabis regulators can assess civil penalties on businesses with fines of up to $20,000 a day.
A new law also created a tax fraud charge for businesses that are failing to collect or remit required cannabis taxes. State officials can also shutter businesses if they refuse to comply with the law -- a strategy meant to pressure landlords whose properties host the businesses.
"Now instead of just being the cost of doing business, we can now put these businesses out of businesses," Hochul said.
The measures are meant to focus on civil, rather than criminal penalties. In developing the deterrent plan, state regulators did not want to re-create stiff drug laws New York has moved away from in recent years.
"This is a different moment and this is a different day," said Chris Alexander, the Office of Cannabis Maangement's executive director. "This is a different approach."
New York's legal cannabis industry has been slow to launch over the last several months. Regulators have sought to issue more licenses to businesses to sell cannabis, but the industry still faces challenges, including access to capital.