NY Legislators Propose Harsh Penalties for Unlicensed Cannabis Retailers

As New York’s regulated cannabis market struggles to gain traction, state lawmakers are taking aim at illicit marijuana retailers with a tough new proposal. Recently introduced legislation would authorize revoking liquor, lottery, and tobacco licenses from any business caught selling weed without proper licensing.

The bipartisan bill, sponsored by Assemblyman John Zaccaro Jr. and Senator Jamaal T. Bailey, has already garnered significant backing with 70 co-sponsors in the Assembly and 10 in the Senate. If passed, the law would take immediate effect, equipping regulators with enhanced enforcement powers.

Under the proposed measures, businesses face escalating penalties for cannabis sales violations. The first offense would result in a one-year suspension of liquor, lottery and tobacco retail licenses. A second violation within three years extends that suspension to three years, while a third strike mandates a five-year license revocation.

This legislation comes as New York City grapples with a proliferation of unlicensed cannabis retailers, estimated at around 2,500 by Mayor Eric Adams’ office. In contrast, only about 40 licensed dispensaries have opened citywide since legal sales commenced late last year.

Sponsors argue these rogue operations are undermining the fledgling legal market’s viability. “They’re choking the regulated businesses trying to get established,” Assemblyman Zaccaro stated, hoping to fast-track the bill through the budget process after missing the April 1st deadline.

However, effectively curbing illicit sales hinges on committed enforcement by the Office of Cannabis Management (OCM), according to cannabis attorney Fatima Afia. “It would require significant resources that OCM has clearly lacked so far for enforcement efforts,” she warned.

Afia also highlighted the shortage of licensed retailers as a key factor enabling the illegal market’s proliferation. “The biggest supporter is not having enough licensed entities to compete,” she remarked.

As New York’s cannabis program strives to find its footing, this proposed legislation aims to level the playing field. By threatening violators’ core business operations, it could motivate compliance and curb the pervasive unlicensed market undercutting legitimate operators.