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'There is not a gray market.' Chair of regulatory board issues warning about gifting cannabis

The method, which involves the purchase of a separate item and the addition of cannabis free of charge, skirts the laws that will govern the sale of pot in New York.

ALBANY, N.Y. — The chairwoman of the state's cannabis control board has said 'not so fast' regarding a loophole that pop-up shops and other vendors have used to allow Western New Yorkers to be "gifted" recreational adult-use marijuana.

The method, which involves the purchase of a separate item and the addition of cannabis free of charge, skirts the laws that will govern the sale of pot in New York and according to Tremaine Wright, who leads the board, is therefore illegal.

"We are hearing many examples of sales of marijuana products by individual vendors and retail locations however they are not licensed nor are they selling regulated products," said Wright.

2 On Your Side visited a pop-up market in Angola on October 10, 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."

"There are currently 38 medical dispensing facilities across the state. We do not have any adult-use nor recreational dispensaries."

Wright spoke Thursday during the board's first meeting. Its six members are in charge of writing the regulations for the state's cannabis programs which include medicinal and recreational use. Per state law, transferring cannabis below the possession limit of 3 oz. for adults 21 years and older without any money paid or services provided is legal, but as she explained when anything else is added, it's not.

"Gifting does not include instances in which cannabis is given away at the same time as another transaction nor when it is offered or advertised in conjunction with an offer for the sale of goods or services," Wright said.

The state's slow roll has meant regulations and business licensing have not been finalized and it could take as many as 12 months for their release. In the meantime, the board has said it will not allow a "gray market" to exist in which we may add, the state would be unable to collect taxes.

A spokesperson for the office of cannabis management reiterated Ms. Wright's remarks but added that... "the state will work with its local partners to enforce the law." It's unclear however what specific guidance law enforcement has been provided, like when ticketing might be warranted and what charges may apply. One agency told 2 On Your Side, it remains a gray area.

Wright's warning to businesses?

"This conduct is not legal and must stop. Individuals who do not cease, run the risk of severe financial penalties."

The Erie County District Attorney's Office has mentioned prosecuting the illegal sale of cannabis, but it's unclear if Wright's comments are enough of a green light. 2 On Your Side has reached out to several law enforcement agencies for comment but did not hear back by the time this story was posted.

As for ongoing cannabis sales on native land, as a spokesperson for the Office of Cannabis Management said two weeks ago, those operations are outside the state's legal jurisdiction.

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