Politics
New York Bills Would Let People File Legal Actions Against Unlicensed Marijuana Businesses
Newly introduced legislation in New York State would allow people in the state to bring legal actions against entities that violate state marijuana laws, potentially empowering ordinary individuals to sue unlicensed cannabis sellers or licensees skirting state law.
Identical companion bills, S.9441 in the Senate and A.10248 in the Assembly, were introduced in the legislature last week. The Senate bill, from Sen. Jeremy Cooney (D), has been referred to the Finance Committee in that chamber, while the Assembly measure, from Assemblymember John Zaccaro Jr. (D), will begin in the Judiciary Committee.
As written, they would enable private individuals to file civil lawsuits against anyone violating a part of the state’s cannabis law that prohibits unlawful cultivation, processing, distribution or sales of cannabis or cannabis products. Individuals would be able to bring the actions under the New York False Claims Act.
“Empowering everyday New Yorkers with tools against illegal cannabis operators, whose conduct is both unlawful and inundates our communities with untested, unregulated and potentially deadly cannabis, is vital as we continue our enforcement efforts to combat illegal cannabis,” a justification memo attached to the bill says.
“Illegal cannabis operators undermine the legal cannabis industry in New York, whose cannabis processors, cultivators, distributors and retail dispensary licensees followed the rules only see their hard work damaged by those who violate the cannabis law,” it says. “New York must lead when legitimate business is compromised by the conduct of bad actors… Authorizing a qui tam plaintiff to bring a civil action for violations of cannabis law under the New York False Claims Act adds another layer of legal protection for everyday New Yorkers.”
The legislative proposal to essentially deputize New Yorkers against illegal marijuana activity comes on the heels of Gov. Kathy Hochul’s (D) ouster of the state’s top cannabis regulator and amid a much-delayed rollout of the state’s legal marijuana market.
A news report earlier this year found that despite state officials levying more than $25 million in fines against unlicensed retailers for selling cannabis products since last year, only a tiny fraction of those fines had been collected by either the New York Tax Department or the Office of Cannabis Management.
In an attempt to rein in unlicensed sales, Hochul in February called on big tech companies such as Google and Meta to “do the right thing” by taking steps to stop promoting illicit marijuana shops, which have proliferated across the state.
She accused social media and search engine companies of passively undermining the legal market that’s being implemented by allowing unlicensed retailers to be featured on their services, giving consumers the false impression that they are legitimate businesses.
“Let us give you the list of legal vendors. I know who’s legal. We all know who’s legal. And then you have a responsibility to make sure that you’re not posting the locations of illegal shops,” the governor said. “Now I’m calling on all these platforms to step up, do the right thing and be part of the solution. Don’t be complicit in helping jeopardize the public health and the livelihoods of these legitimate business owners.”
While litigation has contributed to some of the state’s delays, Hochul has signaled that she holds the state’s regulatory bodies partly responsible.
When her office became aware that the Cannabis Control Board (CCB) only intended to approve three additional licenses at a meeting earlier this year, for example, it intervened and made clear that the number was insufficient. The meeting was subsequently cancelled.
The governor also foreshadowed at a February meeting that she was eyeing potential leadership changes within the state’s marijuana regulatory apparatus because of the implementation issues.
Following the ouster of OCM Executive Director Chris Alexander, advocates at the Cannabis Regulators of Color Coalition said they were “shocked and dismayed” by the action.
While they acknowledged the state has encountered obstacles in its rollout of legal marijuana, they said a New York State Office of General Services (OGS) report wrongly put the blame on Alexander.
“The fact that the head of one of the state’s few Black-led agencies has been scapegoated for all the challenges identified in the OGS report is unconscionable,” they said.
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Separately New York lawmakers are calling for further investigation into the state’s marijuana contract with a Chicago-based equity firm that critics say put investors over the state’s effort to prioritize social equity in its marijuana rollout.
Earlier this month, a Senate committee also passed a bill that would authorize the launch of 10 overdose prevention centers statewide under a harm reduction pilot program. If the measure becomes law, New York would join Rhode Island and Minnesota in authorizing the facilities. Vermont lawmakers also recently passed a bill to establish and fund a pilot program in Burlington, though the state’s governor has signaled he intends to veto it.
New York City became the first U.S. jurisdiction to host locally sanctioned harm reduction centers in November 2021.
