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Amid New York’s extensive efforts to significantly expand the state’s regulated cannabis market, a new legislative proposal has emerged that seeks to grant individual municipal governments enhanced authority to take action against unlicensed cannabis businesses and confiscate their products.
This proposed legislation, introduced by Assemblymember Jenifer Rajkumar (D), is primarily designed to address the growing issue of illegal operators that have proliferated throughout the state during the extended implementation period of New York’s legalization law.
At present, the responsibility for enforcing regulations and shutting down unlicensed cannabis businesses falls within the purview of state regulators, specifically the Cannabis Control Board (CCB). However, the newly introduced legislation, known as the “Stop Marihuana Over-proliferation and Keep Empty Operators of Unlicensed Transactions (SMOKEOUT) Act,” seeks to expand this enforcement authority to local governments. Under this proposed act, municipal officials would be empowered to “order the immediate closure of any business” found to be engaged in illegal cannabis activities and to seize any associated merchandise.
This legislative development is a response to the challenges posed by the illicit cannabis market, which has persisted alongside the regulated industry. By granting local governments the authority to take swift action against unlicensed operators, the SMOKEOUT Act aims to bolster the efforts to create a well-regulated and lawful cannabis market in New York.
The bill reflects the ongoing efforts by state authorities to ensure that the benefits of legalized cannabis are realized while also addressing the risks and challenges associated with unregulated and illicit cannabis businesses. As the legislative process unfolds, it will be important to monitor the potential impact of the SMOKEOUT Act on the cannabis industry and its alignment with New York’s broader regulatory framework.
New York’s SMOKEOUT Act Targets Unlicensed Cannabis Businesses
The introduction of the “Stop Marihuana Over-proliferation and Keep Empty Operators of Unlicensed Transactions (SMOKEOUT) Act” in New York reflects a pressing concern over the current state of unlicensed cannabis businesses and their impact on local communities. A justification memo attached to the bill underscores the urgent need for enhanced enforcement measures, citing the lack of authority for municipalities to intervene in unlawful retail operations and the limited resources available to the Cannabis Control Board (CCB). This combination of factors has led to the proliferation of so-called “smoke shops” that openly engage in the sale of illegal and unregulated cannabis and other contraband with little fear of consequences.
These unlicensed smoke shops have become sources of significant concern due to their role in the illicit cannabis market. The presence of a vast amount of contraband and large sums of cash in these establishments has made them attractive targets for criminal activity, including robberies, and has contributed to elevated crime rates in their vicinity. This situation has placed communities, shop employees, and customers at considerable risk. Furthermore, these unlicensed establishments pose a challenge to licensed dispensaries that adhere to rigorous testing and regulatory standards. Licensed dispensaries are unable to compete with the low prices offered by smoke shops, creating an unfair competitive landscape within the legal cannabis industry.
The timing of this bill’s introduction coincides with New York regulators’ efforts to process a significant number of cannabis business license applications. The state witnessed the opening of over a dozen new cannabis retailers in December, following a settlement agreement that lifted a prolonged licensing blockade. Governor Kathy Hochul has emphasized the importance of both expanding the legal cannabis industry and cracking down on illicit storefronts that continue to operate, thereby jeopardizing community safety.
In October, the New York Senate Cannabis Subcommittee, chaired by Sen. Jeremy Cooney (D), convened to explore potential legislative solutions to address the challenges in implementing cannabis legalization within the state. This ongoing effort highlights the commitment of lawmakers and regulators to refine the regulatory framework and address persistent issues related to cannabis legalization.
Additionally, New York’s Office of Cannabis Management (OCM) released an end-of-year report indicating robust consumer engagement with legal cannabis products in 2023. With more than 3.5 million cannabis products purchased by consumers during the year, total sales for 2023 are expected to surpass $150 million once December figures are accounted for. The report also underscores the state’s commitment to enforcing regulations against unlicensed cannabis activity, as evidenced by the seizure of 11,600 pounds of illicit products valued at approximately $56 million. The OCM conducted 369 enforcement inspections of illicit operations as part of its efforts to maintain the integrity of the legal cannabis industry.
Overall, the introduction of the SMOKEOUT Act and the proactive measures undertaken by New York state authorities demonstrate a commitment to strengthening the legal cannabis market, ensuring public safety, and addressing the challenges posed by unlicensed cannabis businesses. These developments are crucial as New York continues to navigate the complexities of cannabis legalization and regulation.
New York’s Evolving Cannabis Landscape: Job Opportunities, Tax Relief, and Regulatory Updates
In addition to the recent legislative developments in New York’s cannabis industry, the state’s Department of Labor has taken proactive steps to facilitate job recruitment within the legal cannabis sector. In the past month, the department published numerous sample job descriptions tailored to various positions within the emerging cannabis industry. These sample job descriptions serve a dual purpose: assisting cannabis companies in streamlining their hiring processes and enabling prospective employees to gauge their qualifications for different roles within the burgeoning cannabis field. This initiative aligns with the state’s commitment to fostering a robust and well-structured legal cannabis job market.
Governor Kathy Hochul has also demonstrated her dedication to addressing crucial financial and tax-related aspects of the cannabis industry. In November, she signed legislation aimed at simplifying financial institutions’ interactions with state-licensed cannabis clients. This measure represents a significant step in reducing the hurdles faced by financial institutions seeking to engage with the cannabis industry. Furthermore, Governor Hochul signed a separate bill designed to provide tax relief to cannabis businesses in New York City. These businesses have encountered challenges related to federal tax deductions under the IRS code known as 280E. While a previous budget bill in 2022 partially addressed the federal tax issue at the state level, it did not encompass New York City’s distinct tax regulations. The new legislation aims to bridge this policy gap and provide much-needed financial relief to local cannabis businesses.
However, not all proposed cannabis-related legislation has received gubernatorial approval. In a recent decision, Governor Hochul vetoed a bill that sought to permit the inclusion of hemp seeds in animal feed for pets, horses, and camelids such as llamas and alpacas. This decision reflects the careful evaluation of potential regulatory implications and considerations regarding hemp seed use in animal nutrition.
Another notable legislative effort involved a bill that would have allowed licensed cannabis producers to sell their products to tribal retailers. This proposal aimed to provide a solution for cannabis farmers who have accumulated surplus products but lack avenues to sell them. Unfortunately, Governor Hochul vetoed this bill, signaling the challenges faced by cannabis producers in accessing broader markets and distribution channels.
Additionally, state regulators are actively addressing misconceptions surrounding cannabis contamination. They aim to debunk the “false” narrative that cannabis is commonly tainted with fentanyl, a potent opioid. Despite the absence of concrete evidence supporting this claim, the misconception remains widespread. The Office of Cannabis Management (OCM) has released a factsheet addressing this issue, emphasizing the need for evidence-based discussions regarding cannabis safety.
Furthermore, New York’s Office of Addiction Services and Supports (OASAS) has revised its guidance regarding THC testing for individuals undergoing substance use disorder treatment. The updated guidance advises THC screening only when it aligns with a patient’s treatment goals and objectives. This approach underscores a balanced and patient-centered approach to substance use disorder treatment.
Lastly, state regulators have encouraged consumers to support small businesses by taking advantage of post-Thanksgiving Black Friday deals at licensed cannabis retailers. This initiative highlights the importance of fostering a competitive and dynamic legal cannabis market while promoting responsible consumer choices within the industry.
In summary, New York continues to navigate the complexities of cannabis legalization, with ongoing efforts to refine regulations, address financial challenges, and promote consumer awareness and safety. These developments reflect the state’s commitment to establishing a robust and well-regulated cannabis industry that serves the interests of both businesses and consumers.
