New York Governor Seeks to Protect Legal Cannabis Market from Illicit Competition

Legal Cannabis Market from Illicit Competition

New York Governor Kathy Hochul has proposed a bill that would give the state more authority to crack down on illegal marijuana shops and products, in order to safeguard the emerging legal cannabis industry.

Hochul’s bill aims to stop illegal pot sales

The bill, which was introduced on Wednesday, March 22, 2023, would grant the state Office of Cannabis Management and the Department of Taxation and Finance new powers to enforce the state’s cannabis laws and regulations. The bill would also increase the penalties for violating the cannabis rules, such as selling or possessing unlicensed marijuana products or operating an unlicensed marijuana business.

According to Hochul, the bill is necessary to protect the public health and safety of New Yorkers, as well as the integrity and equity of the legal cannabis market. “The continued existence of illegal dispensaries is unacceptable, and we need additional enforcement tools to protect New Yorkers from dangerous products and support our equity initiatives,” Hochul said in a press release.

The bill would allow the state to seize illicit cannabis products and equipment, and to issue cease and desist orders to unlicensed businesses. The bill would also authorize the state to impose fines of up to $200,000 for each illicit cannabis plant or product, and $10,000 per day for operating an unlicensed cannabis business. Additionally, the bill would create a new misdemeanor offense for selling or distributing unlicensed cannabis products.

New York’s legal cannabis market faces challenges

New York legalized adult-use recreational marijuana in March 2021, becoming the 15th state to do so. The state expects the legal cannabis market to generate up to $350 million in annual tax revenue and up to 60,000 new jobs. However, the legal market has been slow to launch, with only a handful of licensed dispensaries opening so far.

Legal Cannabis Market from Illicit Competition

One of the main challenges facing the legal market is the competition from the illicit market, which is estimated to be worth billions of dollars. According to a report by the Rockefeller Institute of Government, New York consumers spent about $4.6 billion on illegal marijuana in 2018, making it the second-largest illicit market in the country after California.

The illicit market not only deprives the state of tax revenue and economic opportunities, but also poses health and safety risks to consumers, who may be exposed to untested and contaminated products. Moreover, the illicit market undermines the state’s efforts to promote social equity and justice in the cannabis industry, by excluding the communities that have been disproportionately harmed by the war on drugs.

New York’s cannabis equity initiatives

New York’s cannabis legalization law includes several provisions to ensure that the legal market is inclusive and equitable, especially for the people and communities that have been most impacted by cannabis prohibition and criminalization. Some of these provisions are:

  • Reserving 50% of the licenses for social equity applicants, such as people with prior marijuana convictions, their relatives, and residents of disadvantaged areas.
  • Creating a social equity fund to provide grants and loans to social equity applicants, as well as funding for community reinvestment, education, and health programs.
  • Expunging and sealing the records of people with low-level marijuana offenses, and preventing discrimination based on marijuana use or history.
  • Establishing an Office of Cannabis Management and a Cannabis Control Board to oversee and regulate the cannabis industry, with representation from diverse stakeholders and experts.

Hochul’s bill is intended to complement and support these equity initiatives, by ensuring that the legal market is fair and competitive, and that the illegal market is eliminated. “This legislation will help level the playing field for the legal cannabis industry and foster a safer and more equitable cannabis market in New York,” Hochul said.

By Oliver Davies

Oliver Davies is a dedicated marijuana and drugs news writer at CBD Strains Only. With a background in journalism and a passion for staying informed about the latest developments in the marijuana industry, Oliver's articles provide valuable insights and analysis. Through his expert reporting, Oliver aims to keep readers up-to-date on the ever-evolving landscape of marijuana and drug-related news.

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