Hochul wants to sharply boost fines on illegal NYC weed shops that refuse inspection

Gov. Kathy Hochul recently unveiled her latest weapon against illegal pot peddlers — who have only managed to grow even more in numbers since last year, according to city officials.

Illicit cannabis business owners who refuse to allow New York state regulators to inspect their shady shops would get slapped with much steeper fines under the new legislation proposed by the governor.

The regulators, who are from the Office of Cannabis Management and don’t carry guns, have been refused entry by some merchants selling marijuana without a license, sources said.

While the state recently passed a law to help authorities shut down illegal shops, the proposed stiffer fines are designed to put the squeeze on their owners in the meantime.

“People are going to test the process,” New York City Sheriff Anthony Miranda recently told The Post. “Fines can’t be the cost of doing business. Fines have to have a tremendous impact on operations.”

The fines for scofflaws would quintuple — from the current $4,000 to $20,000 for a first refusal and $8,000 to $40,000 for subsequent balking — under Hochul’s proposed law.

The move is only the latest in a long line of attempts by the state to rein in illegal cannabis sellers.

Gov. Kathy Hochul has proposed legislation that would increase fines for illicit cannabis business owners who refuse to allow New York state regulators to inspect their stores. Paul Martinka

Lawmakers failed to adequately address enforcement when they approved the law in 2021 legalizing the recreational use of marijuana, critics say — allowing a black market to grow like weeds before the budding legal cannabis industry grappling with lawsuits and other hurdles could get off the ground.

And the illicit shops’ are still growing: Miranda estimated that there are about 2,000 merchants selling illicit cannabis in the Big Apple.

Last year, city officials claimed there were 1,500 unlicensed merchants selling weed. The vast majority of illegal pot businesses in the state are in New York City.

A noticed posted by the New York State Office of Cannabis Management after an illegal cannabis shop was raided in Manhattan. Billy Becerra / NY Post

Miranda said it’s like a game of whack-a-mole because “as you close one, another one opens.”

“They’re not paying taxes. These stores are stealing and robbing from us every day,” the sheriff said.

Gubernatorial spokesman Jason Gough said in an e-mailed statement, “Governor Hochul is committed to cracking down on illicit cannabis shops that are breaking the law and hurting New York’s legal adult-use industry.

“Last year, Governor Hochul signed a new law to help State agencies shut down these unlicensed stores, and this year she included new legislation in her budget to strengthen those efforts.”

Cannabis products for sale at a Manhattan shop that had products seized during a raid last year. Aristide Economopoulos

In addition to greater fines, the proposed measure — included as part of Hochul’s executive budget — also would expand OCM’s ability to more quickly seal a building that rents to an illicit cannabis operator after issuing a notice of violation and order to cease illegal activity.

Under the proposal, if OCM determines that the business is an imminent threat to public health and safety, it could issue and execute a seal order immediately, as long as a hearing is held within three days of such action, as opposed to waiting for the proceeding.

In a nod to New York City Mayor Eric Adams, the bill also would allow the Big Apple and other localities to adopt their own laws to close unlicensed shops and seize and destroy illicit weed and to establish their own civil penalties against the illicit operators.

Authorities raiding an illegal smoke shop in upper Manhattan on Feb. 27, 2024. Matthew McDermott

Cannabis products seized from shops in the East Village in June. Paul Martinka

It would also allow the city and other localities to impose their own fines and collect revenue from the illegal operators.

The illegal stores do cash business and don’t charge or collect the cannabis sales taxes for the state, as the 52 licensed dispensaries — including 21 in the city — are required to.

“These illegal shops overwhelmed the legal market and they target our children,” Miranda said.

He said recently three teenage girls got sick consuming cannabis from an illegal shop, noting the products are not tested by the state.