Overview
On March 31, 2021, the Marijuana Regulation & Taxation Act (MRTA) was signed into law, legalizing cannabis in New York State. With the mission of creating a regulatory framework that supports equitable licensing, economic development and public health and safety, the Enforcement Division plays a critical role in making sure the rules apply to everybody. The current enforcement efforts protect the integrity and investment of entrepreneurs in the legal market, while holding accountable individuals selling illegal, untested and unsafe products to communities across the state.
Governor Kathy Hochul recently unveiled the strongest set of policies enacted thus far to tackle the illicit cannabis marketplace as part of the FY25 Budget. This initiative provides the Office of Cannabis Management and local counties and cities with enhanced authority to act against illicit cannabis storefronts and those who enable them.
Commercial
What’s the Law?
- Businesses must have an adult-use license approved by the New York State Office of Cannabis management and the Cannabis Control Board to legally sell cannabis in New York.
- Under the NYC Admin Code Revisions (Section 7-551) any person who engages in the unlawful sale of cannabis is subject to a penalty of no less than $100 and not more than $10,000 for each day the violation continues with a max penalty of $25,000.
What do I do if my tenant is illegally selling cannabis out of my storefront or space?
The growth of unlicensed stores across New York State has exposed building owners to liability due to illicit cannabis product sales. Under the FY 2025 Budget to help OCM shut down more illicit shops, there are now enhanced penalties for landlords of illicit cannabis businesses.
If a property owner has a tenant illegally selling cannabis out of a storefront or space, they should use the incident reporting tool to ensure OCM can include the location on the complaint tracker for future investigations and disciplinary actions.
Real Property Actions and Proceedings Law allows the District Attorney, local government, or enforcement agency to put the landlord on notice to start an eviction proceeding against the tenant in violation of the Cannabis Law. If the landlord fails to begin proceedings to evict tenants within 5 days, these principals can assume authority and enact eviction proceedings.
Landlords who rent a business they know is at least customarily or habitually engaged in selling cannabis without a license will be subject to penalties determined by the population size of this community and increased to:
- Five times the rent from the time the landlord was notified of the violation, outside of New York City
- A fine of $50,000 for any landlord notified of the violation in NYC
Additional Authority to Consider:
For property owners whom OCM has received notice of illicit cannabis sales on their premises: (Real Property Actions and Proceedings Law § 715-a):
- Step 1: First notice to landlord from law enforcement agency will include:
- A written notice of illegal unlicensed cannabis sales, including products marketed or labeled as such at a commercial location that is leased by the landlord.
- Implementation of RPAPL 715-a(1) requiring landlord to file a temporary petition against the lessee/tenant within five business days of service.
- Contact information provided to obtain further supporting evidence. Under RPAPL § 715-a(2)(b) the property owner must also provide a copy of the executed lease with their tenant in addition to their “sufficient proof” that the unlicensed activity has stopped at the premises. “Sufficient proof” includes a sworn statement by a local law enforcement/ governmental entity that the unlicensed activity has stopped at the premises.
- A written notice of illegal unlicensed cannabis sales, including products marketed or labeled as such at a commercial location that is leased by the landlord.
- Step 2: Second notice to an uncooperative landlord
- A written notice that due to failure to initiate removal proceedings or proceed in good faith, law enforcement agency will proceed as the petitioner in a removal proceeding against the unlicensed commercial tenant and against the landlord for penalties pursuant to RPAPL 715-a(1) and (2).
Residential
What’s the Law?
- It is legal for adults 21 years or older to possess 3 ounces of cannabis and 24 grams of cannabis concentrate (edibles, oil).
- It is legal for adults 21 years or older to consume cannabis in a private home or in most places tobacco can be consumed, with the exception of consumption in a motor vehicle, a private business (such as a restaurant patio), a hookah or “cigar bar,” or on federal property.
Can I prohibit tenants from using cannabis?
As a landlord, you cannot refuse to rent to a tenant who consumes cannabis, but landlords, property owners, and rental companies can ban the smoking or vaporizing or growing of cannabis on their premises.
Tenants registered with the NYS Medical Cannabis Program have the right to consume medical cannabis in their home, including but not limited to smoking or vaping whole cannabis flower, cannabis concentrate, and/or ground plant products.
As a landlord, you can only prohibit the use of medical cannabis if it would put you at risk of losing a federal benefit.
Can tenants grow cannabis?
New Yorkers 21 years and older can now grow up to six plants in their home for personal use (3 mature plants and 3 immature plants) and a maximum of twelve plants per household (6 mature plants and 6 immature plants), even if there are three or more adults 21 and over in the residence.
- Cannabis plants must be kept in a secure place and not accessible to any person under 21.
- Home cultivated cannabis cannot be sold to anyone and is only intended for personal use.
- Please note, it is illegal to make cannabis hash oil or concentrates using substances like butane, propane, or alcohol with home grown cannabis.
Landlords can only refuse to lease space to or penalize a tenant if they risk losing federal benefits. Local municipalities may enact and enforce regulations relating to home cultivation of cannabis provided, no municipality may completely ban or prohibit home cultivation.
Padlocking Illicit Cannabis Storefronts
Emergency Padlocking
The Office of Cannabis Management (OCM) can padlock a business immediately following an inspection if they are selling illicit cannabis in a manner that poses an imminent threat to health, safety, and welfare Note: Upon the OCM’s request, any police officer/ peace officer with jurisdiction may assist with the execution of the padlock order. Cities and County governments may initiate their own padlocking programs provided they pass a local law that complies with New York’s padlocking statute and notify OCM.
Reasons for emergency padlocking upon first inspection include:
- Documented sale to minors
- Products not tested or labeled according to New York Cannabis Law
- Unlicensed processing of cannabis products at the building or premises
- Violent conduct
- Presence of unlawful firearms at the building or premises
- Proximity to schools, houses of worship, or public youth facilities
- Products leading to Illness or hospitalization
In addition to an “imminent threat” standard, OCM must consider these circumstances for emergency padlocking:
- No part of the premises is being used as a residence; and
- Pursuant to local law or ordinance, the location is not zoned and lawfully occupied as a residence; and
- The unlicensed activity is more than a de minimis part of the business activity on the building/premises
Timeline
The emergency padlock will be in effect for one year. Removing or damaging a padlock is a Class A misdemeanor obstructing governmental administration.
Request to Remove a Padlock
Landlords which own property that has been issued an Order to Seal can submit a request to OCM under Cannabis Law § 138-b(11) to have the padlock removed. The padlock will be removed only if sufficient proof is provided to OCM that the Respondent business subject to the Order to Seal has vacated the premises.
To make a request, complete the following affirmation and provide supporting documentation including:
- proof of property ownership,
- the lease agreement,
- a lease surrender, eviction order, or other proof sufficient to OCM that the Respondent has vacated.
To submit a request, email the completed affirmation and required documentation to [email protected].
Reporting an Incident
To make sure you are protecting your community from illicit cannabis sales and unregulated products:
Report any issues with a cannabis business, cannabis product, and adverse events at the link below. All incident reports of potential illicit shops are investigated by the Office’s Enforcement Division. Here’s what you need to know:
- An adult-use cannabis product’s packaging and labeling cannot be attractive to individuals under 21 and cannot make statements that are false or can mislead consumers. Check adult-use PLMA regulations or discover PLMA overview videos for more information.
- Legal shops will always feature the NYS Dispensary Verification Tool in the storefront and will link to the OCM dispensary verification list.
- For any questions about enforcement or an incident report, email [email protected].