Patience is a Virtue: New York Senate Bill Sets Out Harsh Penalties For Anyone That Jumps the Gun on Cannabis Sales…or Transfers, Gifts and Trades

Cannabis Blog Mar 11, 2022

By: Irina Dashevsky , Partner and David Standa, Partner

It is no secret that New Yorkers are excited for adult-use cannabis sales to begin. They are so excited in fact that some companies are taking advantage of the exuberance by coming up with creative business transactions to sell products from the legacy market, but newly introduced legislation in the New York senate indicates that regulators could soon be cracking down on these transactions. Importantly, the punishment for getting caught will be steep.

The legacy market in New York has been, and still is, robust. It is also not an uncommon occurrence in New York for a consumer to buy a legal product (like a lighter or a hat or a cocktail) and be “gifted” some marijuana to go along with it. Not surprisingly, regulators treat such transactions as the unauthorized sale of cannabis resulting from “a misreading of the New York State Cannabis Law to authorize the transaction of cannabis to patrons of commercial establishments by way of ‘gifting’ or ‘trading’ cannabis for the purchase of another lawful product or purchasing a ‘membership’ in a club or establishment.” The legislature is aligned with the regulators on this issue and a new bill seeks to prevent New Yorkers from “utilizing a commercial establishment as a front to deal in cannabis without the requisite lawful authority or permission of the state’s cannabis law.” More than that though, this bill clarifies what the punishment for such a violation will be. If someone is convicted for gifting or trading cannabis, that person will be precluded “from seeking, qualifying or receiving any permit, license or authority to perform any activities under the cannabis law.”

The message from the legislature is clear, if you get caught trying to skirt the cannabis laws of New York, you will be completely boxed out of the legal adult-use industry when it gets operational. So while the excitement about cannabis in the Empire State continues to grow, from the perspective of the legislators and the regulators compliance with the laws is of paramount importance during this pre-operational time in order to be a part of the legal industry.

All eyes are on New York as it rolls out its highly anticipated adult use market. Be sure to follow our blog for more information on these regulations and all cannabis developments in New York. If you have any questions or would like to contact the authors, please email David Standa ([email protected]) or Irina Dashevsky ([email protected]).

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Patience is a Virtue: New York Senate Bill Sets Out Harsh Penalties For Anyone That Jumps the Gun on Cannabis Sales…or Transfers, Gifts and Trades

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