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A03281 Summary:

BILL NOA03281
 
SAME ASNo Same As
 
SPONSORPaulin
 
COSPNSRZebrowski, Thiele, Simon, Seawright, Buttenschon, Conrad, Fahy, Gunther, Magnarelli, McMahon, Stern, Stirpe, Wallace, Woerner, Cunningham, De Los Santos
 
MLTSPNSR
 
Amd §132, Cannabis L
 
Establishes additional penalties for firms, partnerships, associations, corporations, and retailers for conducting unlawful cannabis business.
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A03281 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3281
 
SPONSOR: Paulin
  TITLE OF BILL: An act to amend the cannabis law, in relation to establishing additional penalties for the unlawful sale of cannabis   PURPOSE OR GENERAL IDEA OF BILL: To prevent the unlawful retail sale of adult-use cannabis by unlicensed sellers.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends section 132 of the cannabis law by adding a new subdi- vision 7 to state that, in addition to any other civil or criminal penalties that may apply, any firm, partnership, association, corpo- ration, or retailer doing business as a retail dispensary without a proper license or while under suspension or revocation, or in violation of an order directing cessation of unlicensed retail dispensing issues by the Office of Cannabis Management or local police department, is subject to a civil penalty of not less than twenty-five hundred dollars for the first violation and five thousand dollars for a second violation. Upon a third or subsequent violation, a claiming authority may levy upon property by seizure. Before seizure, the claiming authority shall give the firm, partnership, association, corporation, or retailer 10 days' notice of a hearing for the firm partnership, association, corporation, or retailer to show cause why such property should not be seized. Following the hearing, the claiming authority shall render a decision and the decision shall be subject to review under article 78 of the civil practice law and rules within 30 days after receipt of such decision. Section two provides the effective date.   JUSTIFICATION: New York State legalized adult-use cannabis over a year ago and the New York Office of Cannabis Management just recently issued the state's first retail recreational cannabis licenses. However, many communities across the state have witnessed businesses selling cannabis out of their stores for weeks. These cannabis products are untaxed, unregulated, and delegitimize the legal adult-use cannabis industry that the Marihuana Regulation and Taxation Act (MRTA) established. Further, these unli- censed retailers pose a hazard to public health as the products they sell are not processed or tested within the state and consumers run the risk of purchasing contaminated and harmful products. The adult-use cannabis industry is expected to generate more than 20,000 new jobs and a $4.2 billion market by 2027 in New York State, but this will not come to fruition if the illegal market continues to thrive. Individuals that are applying for the appropriate licensure and are complying with the law are at an immense disadvantage when other indi- viduals are evading licensing fees, product regulations, and rules set out by the Office of Cannabis Management. Unfortunately, local authori- ties in the state do not feel they have the jurisdiction or the tools necessary to stop or even deter the bad actors in our communities. This bill would establish that any person, firm, partnership, associ- ation, or corporation doing business as a retail adult-use cannabis dispensary without the proper license would be subject to a civil penal- ty of not less than $2,500 for the first violation, $5,000 for a second violation, and potential seizure of the business owner's property on a third violation. Other regulated and legal industries in New York State have similar penalties when operating without a proper license, like tobacco retailers and nail salons. To ensure the legitimacy of the adult-use cannabis industry, we must penalize bad actors in the same manner as we do for other legitimate industries in our state.   LEGISLATIVE HISTORY: New Bill.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect immediately.
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A03281 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3281
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 2, 2023
                                       ___________
 
        Introduced  by  M.  of  A.  PAULIN, ZEBROWSKI, THIELE, SIMON, SEAWRIGHT,
          BUTTENSCHON,  CONRAD,  FAHY,  GUNTHER,  MAGNARELLI,  McMAHON,   STERN,
          STIRPE, WALLACE, WOERNER -- read once and referred to the Committee on
          Economic Development
 
        AN ACT to amend the cannabis law, in relation to establishing additional
          penalties for the unlawful sale of cannabis
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 132 of the cannabis law is amended by adding a  new
     2  subdivision 7 to read as follows:
     3    7.  (a)  In addition to any other civil or criminal penalties that may
     4  apply, any firm, partnership, association, corporation, or retailer,  as
     5  defined  in  section  three  of this chapter, doing business as a retail
     6  dispensary without a proper license or while under suspension or revoca-
     7  tion, or in violation of an  order  directing  cessation  of  unlicensed
     8  retail  dispensing  issued by the office of cannabis management pursuant
     9  to article four of this chapter or a local police department is  subject
    10  to  a civil penalty of not less than twenty-five hundred dollars for the
    11  first violation, five thousand dollars for a second such violation,  and
    12  a  claiming  authority may direct a claiming agent to levy upon property
    13  by seizure for a third such  violation  and  any  subsequent  violation.
    14  Before seizure, the claiming authority shall give the firm, partnership,
    15  association, corporation, or retailer ten days' notice in writing, to be
    16  served  in  a manner consistent with article three of the civil practice
    17  law and rules, of a hearing  for  the  firm,  partnership,  association,
    18  corporation,  or  retailer to show cause why such property should not be
    19  seized. Following such hearing, the claiming authority  shall  render  a
    20  decision  in  writing and file with the office, and a copy thereof shall
    21  be served personally or by mail to the firm,  partnership,  association,
    22  corporation,  or retailer. The decision shall be subject to review under
    23  article seventy-eight of the civil practice  law  and  rules  instituted
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02092-01-3

        A. 3281                             2
 
     1  within thirty days after receipt of the claiming authority's decision by
     2  the  firm,  partnership, association, corporation, or retailer.  For the
     3  purposes of this subdivision, an entity is "doing business as  a  retail
     4  dispensary"  when unlicensed adult use cannabis is sold or offered to be
     5  sold to multiple persons from the same premises on more than one day and
     6  after notice to cease and desist has been given by the office of  canna-
     7  bis management or a local police department.
     8    (b)  For  purposes  of this subdivision, a "claiming authority" may be
     9  either the office of cannabis management or the appropriate local county
    10  attorney or corporation counsel upon consent of the office  of  cannabis
    11  management.  A  "claiming agent" means all persons described in subdivi-
    12  sion thirty-four of section 1.20 of  the  criminal  procedure  law,  and
    13  sheriffs, undersheriffs, and deputy sheriffs of counties within the city
    14  of  New  York  acting  upon  direction of a claiming authority. Property
    15  subject to seizure includes cannabis kept or maintained at the  location
    16  of  retail  dispensing  and  any property which contributes directly and
    17  materially to unlawful retail sale of cannabis. Nothing in this subdivi-
    18  sion shall prevent the immediate seizure of illicit cannabis  as  other-
    19  wise authorized by law.
    20    § 2. This act shall take effect immediately.
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