The New York State Office of Cannabis Management in collaboration with local governments are building a competitive cannabis market, built on principles of justice and access, to ensure broad economic and social prosperity across the state. These collaborative efforts foster greater levels of entrepreneurial innovation, quality consumer experiences, safer cannabis products, and broader educational outreach to keep our consumers safe and create a thriving market for the future of our communities.
The enforcement role of local governments will vary based on the locality, but all have options they may use to investigate and close illicit cannabis shops through a structured process aimed at enforcing regulatory compliance and maintaining public safety. Let’s be clear, in our communities, illicit cannabis sales risk public health and safety, impact reinvestment revenue, and threaten justice-involved entrepreneurs progress and success in the New York cannabis market.
Here’s what you need to know:
- Municipalities and Licensee Operations:
- Municipalities may not issue local licenses to cannabis licensees.
- All municipalities including counties are preempted from adopting any law, rule, ordinance, regulation, or prohibition pertaining to the operation or licensure of adult-use, medical or cannabinoid hemp licenses.
- Towns, cities and villages are permitted to pass local laws and regulations governing the time, place and manner of adult-use retail dispensaries and on-site consumption licenses provided that the local law and regulations do not make the operation of the license unreasonably impracticable as determined by the Cannabis Control Board. For example, cities, towns, and villages are permitted to pass laws and regulations pertaining to local zoning and the location of licensees, hours of operations and adherence to local building codes.
- Local municipalities may enact and enforce regulations relating to home cultivation of cannabis provided, but municipalities cannot completely ban or prohibit home cultivation.
- County and city governments can adopt their own laws to regulate unlicensed cannabis businesses, including padlocking, emergency padlocking, OTS, and seizure powers, so long as their new local law meets the following requirements:
- Ensure consistent enforcement and procedures to conduct inspections, hearings, and padlocking businesses that mirror OCM’s
- Designate a point of contact to coordinate with OCM to report on enforcement activities
- Require hearings in City or County courts within 3 days of emergency padlocking and a court decision within 4 days after the hearing, for locations that were padlocked at first inspection due to imminent threat to health and safety
- County and city governments can initiate emergency proceedings with orders to cease illicit activity against both businesses and landlords using Section 16-a of the Cannabis Law, upon 10 days’ notice to OCM, with the option to collect penalties in those proceedings.
- Local Taxes and community Reinvestment: There is a local excise tax imposed on the sale of cannabis products from a retail dispensary to a cannabis consumer at 4% of the products price. This tax is distributed to local governments based on where the retail dispensary is located. 25% of the tax revenue goes to the county and 75% goes to the cities, town, or villages within the county as a proportion of cannabis sales. If a town and a village within the town both allow adult-use sales, the revenue shall be distributed based on agreed upon distribution agreement between the town and village. If no such agreement exists, then the revenue distribution between the town and village will be divided evenly.
- FY25 Budget and County Enforcement Powers: Governor Kathy Hochul recently unveiled new initiatives to shut down illicit cannabis operations and protect the legal marketplace as part of the FY25 Enacted Budget. The plan provides the Office of Cannabis Management and local municipalities with new authority to take action against illicit storefronts and those who enable them. The initiatives are the strongest set of policies enacted thus far to tackle the illicit cannabis marketplace.
- Municipality Opt-Out Repeal: A municipality can reverse their opt-out by repealing the local law which established the prohibition. If a municipality originally opted out of both the adult-use retail dispensary an on-site consumption license types, they may choose to repeal the opt-out for only one of the two license types, or both.
- Once the opt-out repeal law has been passed by the municipality a copy of the law should be emailed to the Office of Cannabis Management (OCM) to [email protected]. This will allow OCM to remove the municipality from the opt-out list. OCM must be notified of an opt-out repeal to keep the list current.
- Once a municipality repeals their opt-out law, for one or both license types, they are not permitted to reverse the decision and opt-out again. All other cannabis license types are authorized and may still be issued by the Cannabis Control Board for locations within an opt-out municipality.
For questions about the opt-out reversal process please email [email protected].
