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Businesses suspected of illegally selling cannabis, including 'gifting,' ordered to stop

Continuing to sell would risk the opportunity to get a license in the legal market in addition to substantial fines and possible criminal penalties.

BUFFALO, N.Y. — The New York State Office of Cannabis Management (OCM) announced that letters have been sent to businesses that are suspected of illegally selling cannabis to order them to stop.

The letter informs the businesses that continuing to sell cannabis illegally, including the act of gifting, would risk the opportunity to get a license in the legal market in addition to substantial fines and possible criminal penalties.

A license is required to sell the product, and as of yet none have been issued.

Back in October, questions arose about the legality about gifting, which is when the business sells a customer a item and they receive a cannabis gift along with purchase. This activity is illegal under the Marijuana Regulations and Taxation Act.

2 On Your Side visited a pop-up market in Angola back in October, that was hosted by a local dispensary. The organizer explained that people did not buy products but donated money or bought another item and received a cannabis "gift."

In response to reports about gifting, Cannabis Control Board Chairwoman Tremaine Wright shot down the work around in October, 2021. She said then, “The cannabis being exchanged in the transactions described, those remain illicit. There is no gray market in New York State. This conduct is not legal and must stop. Individuals who do not cease run the risk of severe financial penalties.”

Questions started to pop up about the enforcement of Wright’s declaration. Now OCM is taking action with cease and desist letters. 

An initial investigation found more than 24 alleged violators who were sent letters to educate them about the laws and direct them to stop immediately.

“We have an obligation to protect New Yorkers from known risks and to strengthen the foundation of the legal, regulated market we are building. We will meet the goals of the MRTA to build an inclusive, equitable and safe industry,” Wright said. “Therefore, these violators must stop their activity immediately, or face the consequences.”

“We want to make sure these operators fully understand the law and the consequences they face and now that these letters have been sent, we fully expect them to cease and desist their activities – if they don’t, we will take action,” said OCM Executive Director Chris Alexander. 

“New York State is building a legal, regulated cannabis market that will ensure products are tested and safe for consumers while providing opportunities for those from communities most impacted by the over criminalization of the cannabis prohibition, and illegal operations undermine our ability to do that. We encourage New Yorkers to not partake in illicit sales where products may not be safe and we will continue to work to ensure that New Yorkers have a pathway to sell legally in the new industry.”

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