Thursday, February 22, 2024

NYC Puts Landlords On Hook For Unlicensed Weed Dispensaries

With 1,500+ illegal weed shops in NYC – officials turns to others to manage the problem.

New York went fully recreational weed in March 2021 and in September there were23 legal dispensaries open across the state, with only nine in New York City. The New York City’s Independent Budget Office determined an estimated 1,500 unlicensed retailers in the city alone. And those stores have almost a half of a billion dollars in products – both legal and illegal.

Since the chaotic rollout of recreational marijuana in New York State, NYC has struggled with unlicensed dispensaries.  The epidemic of illegal sellers has presented all kinds of challenges – including, as one State Senator noted, a very real public health concern – law enforcement and regulators have struggled to implement effective policy solutions to this very real problem.  Now the city has decided to share the pain with landlords both big and small.

RELATED: Unlicensed Shops in NYC Are Doing Better Than The Naked Cowboy In July, with unlicensed retailers blocks from city hall, the Council passed a law which might help turn the tide in the fight against illicit cannabis retailers.  It was passed onto landlords, forcing them to be partners with the law enforcement.

Photo by A_Melnyk/Getty Images

The law firm Feuerstein Kulick, a leader in the cannabis space, shares “Local Law 107 prohibits property owners from knowingly leasing commercial space to unlicensed sellers of cannabis or tobacco products. The law imposes a tiered fine structure: owners first get a written notice of the violation. Owners have 15 days to appeal the written notice, which constitutes presumptive evidence that the owner has violated the law if the appeal is unsuccessful. Upon a subsequent inspection and violation, the owner is subject to a $5,000 civil penalty, and a $10,000 penalty for each subsequent violation. Interestingly, evidence that the owner attempted, in good faith, to evict the unlicensed vendor serves as an affirmative defense to the penalty. ”

RELATED: 5 Things To Know Before Buying A Vape Pen

It has been estimated there is one unlicensed dispensary for every 10 restaurants in NYC.  The failed rollout has had a big impact on the overall cannabis industry.  Forcing a nearly billion dollar market into the black market has an over effect on regional growers, product manufactures and affiliate industries. The retailers do not pay taxes, so the state is losing massive amounts of revenue and the businesses operate in a free for all.

As the situation continues to balloon, the state seems to be focused more on closing illegal operations as opposed to helping legal businesses open and respond to a proven robust market.

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