Connect with us

Business

NYC Pushes Unlicensed Cannabis Enforcement to Landlords

Published

on

In April 2023, New York City Councilmember Lynn C. Schulman introduced a bill to the City Council which would prohibit landlords from leasing to a commercial tenant engaged in the unlicensed sale of cannabis. After being approved by the Committee on Public Safety, the bill was sent to, and also approved by, the full Council on Thursday, June 22nd. It will now be sent to the desk of Mayor Eric Adams, who has 30 days to either sign the bill and enact it into law, or veto it.

If enacted, the bill would send city inspectors to suspected unlicensed cannabis stores, which currently number in the thousands. If the inspector finds that illegal cannabis is being sold on premises, the landlord would face a fine between $5,000 and $10,000. A second inspection would later take place, and if the landlord can provide proof that eviction proceedings have begun since the first inspection, the fines may be avoided. Along with the state agencies currently authorized to inspect for relevant violations, the bill would allow the mayor to designate any state agency to inspect for such. While the levying of fines against landlords could significantly reduce unlicensed cannabis stores, a certain provision of the bill may allow for a loophole to be exploited by these unlicensed stores, as further discussed below.

Actions against the illicit businesses themselves have already begun in earnest, as Governor Kathy Hochul granted the Office of Cannabis Management (OCM) with enforcement powers newly backed by the state’s FY 2024 Budget. The timing of the bill’s approval coincides with the Governor’s report that nearly $11 million worth of illicit cannabis products have been seized throughout the state so far. The additional step of fining landlords who knowingly rent to unlicensed operators has long been proposed as a deterrent against the illicit market.

The Existing Markets

New York effectively has two cannabis industries: the legal one, born of the Marihuana Regulation and Taxation Act (MRTA) in March 2021, and bound by the OCM’s rigid regulatory framework, and the illegal one, which is vastly larger, older, and unfettered by the restrictions placed on legitimate licensees, including the payment of taxes, and public safety prohibitions on operating in sensitive locations or selling to minors.

Long before the first state-licensed dispensaries opened their doors, it was clear that the two industries could not truly coexist. The unlicensed marketplace (AKA the legacy market, the gray/black market) has opportunistically exploded since the MRTA legalized cannabis throughout the state, and has continued to proliferate at light speed when compared to the legal market, the rollout for which has crawled sluggishly forward under the weight of bureaucracy. Even one of the states with the longest running legal adult-use (recreational) cannabis program, California, sees up to $8 billion in illegal sales every year, generating significantly more revenue than the legal market.

In response, politicians at every level of state government have proposed some sort of landlord accountability. The idea is that if landlords are discouraged from entering leases with these businesses or punished for having done so, operators will be unable to secure the necessary space or, in the event that they already signed a lease, will face eviction. In either event, these illicit operators will be forced to consider going entirely underground, closing their doors or, perhaps, will consider entering the legal marketplace and obtaining a dispensary license. For many legacy operators, the latter may not be realistic. New York was the first state in the nation to prioritize justice-involved license applicants through its Conditional Adult-Use Retail Dispensary (CAURD) program. But nearly two and a half years after MRTA passed, and with thousands of adult-use cannabis applications submitted, there are only a handful of legally compliant dispensaries open for business in New York.

Landlords who lease space to unlicensed operators cannot plead ignorance to avoid fines. It was initially believed that a landlord could not lease directly to a CAURD license holder, but rather would enter into a lease with the Dormitory Authority of the State New York (DASNY), which would then sublease the space to the license holder. The difficulty in locating and securing compliant premises has led to the OCM approving locations for non-DASNY controlled premises. Both DASNY leases and these stand-alone leases, which Falcon Rappaport & Berkman has extensive experience with, are explicit in their structure and purpose. For these unlicensed stores, landlords across the city enter into non-DASNY leases with tenants who conspicuously advertise THC products for sale. Under the proposed bill, these landlords would be at high risk of enforcement action, particularly after a city agency warning letter which could disallow any landlords’ claims of ignorance.  Falcon Rappaport & Berkman can assist Landlords in drafting leases with more robust use restrictions to discourage unlicensed cannabis sales and ease eviction actions in the event such illegal use has occurred.

Unforeseen Consequences

Fining commercial landlords and/or encouraging them to evict illicit cannabis tenants is a predictable step in the implementation of New York’s legal cannabis market. Without it, legitimate license holders will continue to be at a disadvantage in the industry, and neither consumers nor the general public will reap the benefits of a well-regulated marketplace.

time lapse photography of several burning US dollar banknotes

However, the way in which we fine these commercial landlords, or enact other enforcement action, must be carefully examined. A provision of the proposed bill, section C.1., specifies that written notice following an inspection (and presumably any future fines) are only for a property that is used to sell illicit cannabis products and “is not occupied for any other licensed or lawful purpose.” While the bill may still result in fines against landlords of unlicensed cannabis stores, this provision means that if the premises is used for another lawful purpose, these fines against the landlords may not apply. The existing unlicensed market consists of not only stand-alone cannabis stores, but of bodegas and convenience stores selling cannabis products, the landlords of which will likely avoid penalties under this proposed bill.

The complexity and adaptability of the unregulated market should not be underestimated. If enacted, this bill will hinder some significant competitors to adult-use dispensary licensees, but will be far from addressing the entire unregulated market in NY. Frequent reassessment of enforcement action and well-crafted policies will be necessary to ensure a flourishing New York adult-use cannabis industry.

Source: https://thefreshtoast.com/cannabis/nyc-pushes-unlicensed-cannabis-enforcement-to-landlords/

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

Published

on

By

A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

Continue Reading

AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

Published

on

By

Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

Continue Reading

Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

Published

on

By

Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

Continue Reading

Trending

Copyright © 2022 420 Reports Marijuana News & Information Website | Reefer News | Cannabis News