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NYC City Council Pledges Action on Unsolicited Pot Shops
New York City officials are pledging new action to address the proliferation of unlicensed pot shops in the nation’s largest city.
Civic leaders in New York City this week promised increased action to address the proliferation of unlicensed marijuana retailers, just weeks after regulated sales of adult-use cannabis began in the nation’s most populous city. At a meeting of the New York City Council on Wednesday, officials pledged increased enforcement against unlicensed cannabis retailers and said that the state legislature is drafting new legislation to give law enforcement additional powers to shut down illicit pot shops.
“We know there is an illegal cannabis store, van or street vendor on what seems like every block in New York,” Councilwoman Gale Brewer, chair of the Council’s Oversight and Investigations Committee, said during the hearing of the council’s Committee on Consumer and Worker Protection.
“The proliferation of cannabis retailers over the last 22 months has gone almost unchecked by the city and state,” she added in a statement quoted by the Daily News. “These illegal stores, it seems to me, suck up revenue that should be going to licensed dispensaries.”
Task Force Found 1,200 Illicit Pot Shops in New York City
In December, New York City Mayor Eric Adams launched a pilot interagency task force to address the growing number of unlicensed retailers. The task force, which includes the Sheriff’s Office, the NYPD, the Department of Consumer and Worker Protection, and the Office of Cannabis Management, has identified at least 1,200 unlicensed marijuana shops in the city. Brewer said that an analysis by city council staff had revealed 11 unlicensed shops selling cannabis within a 10-block radius of the city’s first licensed retailer.
“The tidal wave of unlicensed sellers in the state’s largest market threatens to undermine – I’m afraid – the laudable effort” made by the state’s cannabis legalization law.” Brewer said.
At Wednesday’s hearing, officials with the city’s Sheriff’s Office, the NYPD, the Department of Health and other local agencies appeared to speak with council members about the number of unlicensed cannabis retailers setting up shop in the city. NYC Sheriff Anthony Miranda said that about 600 pounds of weed has been confiscated from the illicit stores, resulting in referrals for civil action and criminal prosecution.
“The task force is continuing, our operations are increasing, we are doubling – if not tripling – the enforcement that we have,” Miranda said. “We want them to know the type of enforcement that’s going on so that they understand that we’re not going away.”
State Senator Promises New Legislation
State Senator Liz Krueger, who was the lead sponsor of New York’s cannabis legalization bill in the Senate, said during a public comment period that she understands the frustration caused by unlicensed retailers. She added that lawmakers would take new action on enforcement during the 2023 legislative session.
“We are going to be implementing new, expanded laws that give the state more tools, and our police departments and our sheriffs and our marshalls,” Krueger said, adding that the unlicensed shops are “harming the entire model that we’ve been trying to build and establish across the state.”
Elliot Choi, chief knowledge officer at the cannabis and psychedelics law firm Vicente Sederberg LLP, said that illegal dispensaries must be addressed for the legal market to have a viable chance at success in New York.
“There are costs that go into obtaining and maintaining a legal cannabis dispensary that illegal dispensaries are bypassing,” Choi wrote in an email to High Times. “It creates an unfair advantage since the illegal dispensaries can sell cannabis products cheaper, especially not collecting any taxes.”
Choi also noted that unlicensed cannabis retailers pose a danger to unwitting consumers.
“Many consumers mistakenly believe the illegal dispensaries are licensed and therefore, the products they are selling are safe,” said Choi. “But that isn’t the case as the illegal dispensaries are in many instances selling unregulated products that have been shown to be contaminated.”
Mark Sims, president and CEO of cannabis goods company RIV Capital, agreed, noting that an investigative report examining products from illicit operators in New York last year showed that illicit products being sold had a 100% fail rate under the state’s cannabis testing standards and contained dangerous toxins including heavy metals and E.Coli.
“The report highlighted one of the primary reasons it is so important for state regulators to work with local government and law enforcement to shut down illicit operations,” Sims told High Times. “It’s great to see New York City Council and law enforcement take these public health concerns seriously, and we encourage state cannabis regulators to do more to assist with these efforts to shut down the illicit market. There is certainly more work to be done here to protect consumers – but this is a step in the right direction.”
Source: https://hightimes.com/news/nyc-city-council-pledges-action-on-unsolicited-pot-shops/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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