Connect with us

Business

The Illegal Cannabis ‘Whack-A-Mole’ Problem Finally Solved? – NYC to Go After Landlords That Rent to Illegal Weed Shops

Published

on

New York says why chase the mouse when you can go after the mouse trap maker instead!

Lynn C. Schulman, a councilman for New York City, filed a measure in April 2023 that would make it illegal for landlords to lease to business tenants who are engaged in the unauthorised sale of cannabis. On Thursday, June 22, the bill was sent to and passed by the entire Council after being authorised by the Committee on Public Safety. The bill will now be delivered to Mayor Eric Adams’ desk, having been given 30 days to sign it into law or veto it.

If passed, the bill would dispatch city inspectors to the thousands of alleged unlicensed cannabis outlets. The landlord might be fined between $5,000 and $10,000 if the inspector discovers that illegal cannabis is being sold on the property. The penalty can be avoided if the landlord can show evidence that eviction proceedings have started since the initial inspection. A second inspection would then happen. The measure would permit the mayor to select any state agency to inspect for such offences in addition to the state agencies already allowed to do so. Even though the imposition of fines on landlords may significantly lower the number of unauthorised cannabis outlets, several provisions of the bill may allow for these illegal stores to take advantage of a loophole.

Since Governor Kathy Hochul gave the Office of Cannabis Management (OCM) authority to enforce recently authorised by the state’s FY 2024 Budget, actions against the illegal enterprises themselves have already started in earnest. The Governor’s report that roughly $11 million worth of illegal cannabis goods have been seized so far around the state, and the passage of the bill comes at the same time. It’s been suggested for a long time that the extra step of imposing penalties on landlords who intentionally rent to unregistered operators should serve as a disincentive to the black market.

The Coexistence Challenge: Legal and Illegal Cannabis Markets

The Marijuana Regulation and Taxation Act (MRTA) established the legal cannabis industry in New York in March 2021, and the strict regulatory framework of the OCM constrains it. In contrast, the illegal cannabis industry is much larger, older, and unconstrained by the limitations placed on valid license holders, such as the payment of taxes and public safety restrictions on operating in areas of concern or selling to underaged children.

It was obvious that the two industries could not really coexist before the first state-licensed dispensaries opened their doors. Since the MRTA legalised cannabis throughout the state, the unlicensed market (also known as the legacy market, the grey market, or the black market) has opportunistically exploded. It has continued to spread at an alarming pace in contrast to the legal market, whose rollout has sputtered along under the weight of bureaucracy. Even California, which has one of the oldest adult-use (recreational) cannabis programs in the country, sees up to $8 billion in illegal sales annually, bringing in a lot more money than the legal industry does.

In response to the issue, politicians at different levels of state government have proposed measures to hold landlords accountable for leasing unlicensed cannabis businesses. The aim is to discourage landlords from entering into such leases or to impose penalties if they do. By doing so, operators would struggle to find suitable space or face eviction if they have already signed a lease. This would force illicit operators to either go completely underground, cease their operations, or consider entering the legal marketplace by obtaining a dispensary license. However, many existing operators may find this option unfeasible.

New York took the lead by prioritising justice-involved license applicants through its Conditional Adult-Use Retail Dispensary (CAURD) program. Despite this, after over two years since the passage of the Marijuana Regulation and Taxation Act (MRTA) and the submission of thousands of adult-use cannabis applications, only a limited number of legally compliant dispensaries are operational in New York. Landlords who lease to unlicensed operators cannot claim ignorance to evade fines. The proposed bill poses a significant risk of enforcement action against such landlords, especially after receiving warning letters from city agencies that undermine any claims of ignorance. Falcon Rappaport & Berkman can assist landlords in drafting leases with stronger use restrictions to discourage unlicensed cannabis sales and simplify eviction procedures in case of any illicit activities.

Challenges and Considerations

Imposing fines on commercial landlords and encouraging them to evict illicit cannabis tenants is a crucial step in the implementation of New York’s legal cannabis market. Without these measures, legitimate license holders would remain at a disadvantage, and both consumers and the general public would miss out on the advantages of a well-regulated marketplace.

However, it is essential to carefully consider the approach to fining commercial landlords or implementing other enforcement actions. A specific provision in the proposed bill, section C.1., states that written notices and potential fines apply only to properties exclusively used for selling illicit cannabis and “not occupied for any other licensed or lawful purpose.” While the bill may still result in fines for landlords of unlicensed cannabis stores, this provision means that if the premises are used for another lawful purpose alongside illicit activities, the fines may not apply. This creates a potential loophole where landlords of bodegas and convenience stores selling cannabis products could potentially avoid penalties under this bill.

We must recognise the complexity and adaptability of the unregulated market. This bill would certainly hinder significant competitors to licensed adult-use dispensaries if enacted. However, it falls short of addressing the entire unregulated cannabis market in New York. Regular reassessment of enforcement actions and implementing well-crafted policies will be necessary to foster a thriving adult-use cannabis industry in New York.

Bottom Line

Approving the measure in New York City to fine landlords and encourage evictions for unlicensed cannabis sales is a crucial step in regulating the legal cannabis market. While it addresses the issue of illicit operators, some potential loopholes and challenges need to be carefully considered. Ongoing evaluation, reassessment of enforcement actions, and well-crafted policies will be necessary to ensure the success of the legal adult-use cannabis industry and effectively curb the unlicensed market in New York.

Source: https://cannabis.net/blog/news/the-illegal-cannabis-whackamole-problem-finally-solved-nyc-to-go-after-landlords-that-rent-to-i

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