State takes action against unlicensed cannabis sales in Binghamton and Ithaca

“As the most equitable cannabis industry in the nation gains momentum, we continue to take action against bad actors who seek to skirt around our laws,” Gov. Kathy Hochul said in a press release announcing the violations. “Unlicensed dispensaries violate our laws, put public health at risk, and undermine the legal cannabis market, and we will continue to take these critical enforcement measures to protect New Yorkers from illicit, unregulated sales.”

In Ithaca, the following shops were charged: Black Leaf, 103 East State Street; Zaza Convenience, 101 East State Street; and The Rezz, 312 Fourth Street.

“Ithaca is proud to play a role in the regulated cannabis industry, with its focus on equitable economic development, safety, and community benefit,” Ithaca Mayor Laura Lewis said. “Unlicensed, illegal sales of cannabis undermine this initiative.”

In Binghamton, the state charged Green Magic, 144 Henry Street; and Takeoff 2, 63 Chenango Street. Each of the businesses, which were also issued orders to cease unlicensed activity, may be subject to additional violations and penalties under the Department of Tax and Finance Law.

“The city of Binghamton is proud to lead the way in upstate New York as home to the first legal cannabis dispensary outside New York City,” Binghamton Mayor Jared M. Kraham said. “The city of Binghamton will continue to work side-by-side with the state on this type of enforcement, which is necessary to protect the consumer and ensure the regulated cannabis industry thrives.”

The five shops are next subject to hearings before an administrative law judge. If found to be non-compliant, the judge may confirm the fines and order the businesses to pay them. The state will follow up on the businesses to ensure the unlicensed activity has ceased. If not, the OCM can petition in state Supreme Court to have the business padlocked shut until it complies with cannabis laws and regulations.

The enhanced statewide enforcement on unlicensed cannabis businesses was enabled by legislation signed by Gov. Hochul on May 3 as part of the fiscal year 2024 budget. The legislation allows OCM to assess civil penalties against unlicensed cannabis businesses with fines of up to $20,000 per day for the most egregious violations and starts the process of potential closure of a retail location for selling cannabis without a license.

The law also allows the Department of Taxation and Finance to conduct regulatory inspections of businesses selling cannabis to determine if they are paying appropriate taxes.