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April 6, 2023

NY Cannabis Insider: "Here's (Mostly) Everything in Gov. Hochul's Recent Cannabis Bill"

Jason Klimek, Cannabis Team co-leader, had his “Here’s (Mostly) Everything in Gov. Hochul’s Recent Cannabis Bill” guest column published by NY Cannabis Insider. The guest column explores how an enforcement bill introduced by New York State Governor Kathy aims to address illicit cannabis shop operations by giving the Office of Cannabis Management (OCM) and the Department of Taxation and Finance the ability to seize cannabis products and impose penalties for the sale of illicit cannabis. 

Jason’s guest column explains what is meant by illicit cannabis by providing the previous definition from the New York State Tax Law. It also provides the definition of illicit cannabis found in Governor Hochul’s bill. Jason notes, “The big changes to the definition of illicit cannabis are adding the term ‘purported cannabis’ and creating a rebuttable presumption that the lack of an invoice from a licensed distributor is prima facie evidence that tax has not been paid on the cannabis.”

The definition of purported cannabis allows the OCM and New York State Department of Taxation and Finance to enforce cannabis penalties for the sale of cannabis products containing Delta-8, Delta-9, and Delta-10 THC by retailers without an adult-use retail license. 

Governor Hochul’s bill breaks the penalty provision into civil penalties, which range from having certain certificates revoked to monetary fines, and criminal penalties, which range from misdemeanors to felonies. Jason notes that the penalties are cumulative, “resulting in astronomical penalty amounts.” 

Jason’s guest column further details elements of the civil penalties, specifically several new powers the bill vests in the commissioner of the New York State Department of Taxation and Finance as well as the fines associated with the penalties, and outlines the enforcement abilities of the department and the OCM.

Gifting cannabis remains illegal under the law, and Jason notes that the bill makes it unquestionably clear that this conduct is illegal. Previously, law enforcement was uncertain whether gifting cannabis was illegal. 

Though Governor Hochul’s bill addresses several issues, it may also have potentially unintended consequences. This bill has not yet been enacted, and may fail if the increased criminal penalties are not modified or removed. 

NY Cannabis Insider subscribers can read the full article here


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