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New York’s Cannabis Regulators Have Received Just $22.5k of the $22M Fines Issued to Unlicensed Stores

New York’s cannabis regulators have collected just $22,500 in fines from unlicensed cannabis shops, despite issuing more than $25m.

According to reporting from The City, the state’s Department of Taxation and Finance and the Office of Cannabis Management (OCM) have collected miniscule amounts in fines despite being given greater authority to clamp down on illicit trades last year.

Amid growing pressure to clamp down on the state’s thriving illicit market, new rules were introduced last year allowing regulators to impose fines of $10,000 for each day a cannabis business has been operating without a license, rising to $20,000 if they’ve previously received a notice from the OCM.

Regulators have also been conducting raids since last summer, but it is understood that the fines are levied and collected separately from the raids.

In October, it was reported that many of these raids were not being followed up on, and enforcement hearings had been paused due to lack of resources.

“Currently, the State is prioritizing shutting down illegal shops and seizing unlawful products,” said Aaron Ghitelman, a spokesperson for OCM.

“While we recognize entities being fined have a right to due process, we are committed to working within the confines of the law to collect the fines once the legal process is complete.”

It comes as the OCM is battling to keeps its head above water amid increasing calls from both business owners and officials to tackle the problem.

Earlier this month, Business of Cannabis reported that New York’s Governor Kathy Hochul had doubled down on her criticism of OCM suggesting she could impose leadership changes.

Asked whether the OCM’s leadership should be concerned about their jobs given the continued frustration from stakeholders, she replied: “I’m not satisfied. I want more enforcement, I want to make sure that we are looking at leadership. I’m looking at opportunities to make major changes.”

Adding that the state’s 14 investigators currently tasked with managing the issue were insufficient, Ms Hochul suggested local law enforcement could be given new powers to shut down unlicensed businesses.

It came as the OCM announced that its investigators had inspected just 60 cannabis stores over the past few years, seizing hundreds of pounds of cannabis worth over $3m. This is a mere drop in the ocean compared to the estimated 36,000 unlicensed shops now operating in the state.

Her criticisms are supported not just by stakeholders currently battling to keep their businesses afloat as they wait for licences or compete with the black market, but also by six of the 12 members of the Senate Subcommittee on Cannabis, who wrote to the state’s regulators on Friday calling on them to ‘do better’.

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