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.
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.