new york city

What Is The Fine For Operating Cannabis Businesses In New York Without A License?

Legal adult-use cannabis sales began in New York State in December 2022. The first legal sales happened at a registered dispensary in Manhattan’s East Village at a retailer named Housing Works Cannabis Company.

New York State’s legal cannabis industry has since had to compete with an unregulated industry that has proven hard for policymakers and regulators to get a handle on. As of March of this year, the New York Times estimated that there are roughly 2,000 unregulated cannabis shops in New York. By comparison, New York Governor Kathy Hochul recently announced that over 400 licenses have been issued so far in 2024.

“Governor Kathy Hochul today announced that the New York State Cannabis Control Board has issued 403 adult-use cannabis licenses in 2024 to bolster the legal market in New York. The Cannabis Control Board recently issued 101 licenses, building on significant progress to strengthen our state’s cannabis regulatory framework with the passing of several resolutions aimed at issuing new licenses, streamlining the adult-use cannabis licensing process, and enhancing critical enforcement measures.” Governor Hochul’s office stated in a press release.

“With the Cannabis Control Board’s issuance of 101 adult-use cannabis licenses, New York’s legal cannabis industry continues to make significant progress with over 400 licenses issued in 2024,” Governor Hochul said. “Strengthening New York’s equitable cannabis industry and ensuring the hard-working small business owners operating in the legal market have the licenses to open are the best way to protect the integrity of sales in New York.”

Operating a cannabis business without a license in New York is a serious offense and can result in severe financial penalties. A recent example of that can be found in a $15.2 million fine that was recently issued to an unlicensed proprietor in New York.

“David Tulley illegally sold cannabis in multiple stores across upstate and central New York and sold unregulated products to underage customers. These illegal and unlicensed stores are budding up throughout the state and are hurting our communities. Today, David Tulley is paying the $15 million price for his repeated illegal activity. This punishment should serve as a clear warning for all unlicensed cannabis stores in the state: we will enforce the law and shut down your operations.” stated New York State Attorney General Letitia James.

“The court ruling against Tulley will require the forfeiture of 90 percent of their illicit earnings from cannabis sales between February 2022, and May 2023, across all their locations. Tulley faces a penalty of $10,000 per day for selling cannabis without a license, escalating to $20,000 per day for continuing unlicensed sales after receiving a Notice of Violation.” The New York Governor’s Office stated about the fines.

Additionally, Tulley incurred a $5,000 penalty for removing a notice of violation from their Lyons, NY location on June 27, 2023. Tulley is also responsible for reimbursing the Office of the Attorney General $1,324.98 for their costs. In total, the judgment against Tulley amounts to $15,253,954.10 in disgorgement and penalties, plus interest.” The New York Governor’s Office also stated.

Fines are situational in New York State. Make sure to consult with a legal professional before starting any cannabis business, both in New York State or any other state.