Seven NYC retailers, including a Woodlawn smoke shop, hit with cease and desist letters for illicit cannabis sales

Smoke-Shop
Exhale Smoke Shop in Woodlawn is one of seven NYC retailers to be served with a cease-and-desist letter by the state’s cannabis control board on Wednesday.
Photo courtesy Exhale Smoke Shop via Google Images

Seven NYC retailers misleadingly marketing themselves as legal cannabis dispensaries despite the city’s cannabis adult-use retail industry still building out for an end-of-the-year opening, were sent cease and desist letters, directing them to stop all illicit cannabis sales by the state’s cannabis board on Wednesday.

In all, 52 locations have been sent cease and desist letters by the New York State Cannabis Control Board, with one location in the Bronx, Exhale Smoke House Inc. in Woodlawn, and six other establishments in NYC. Exhale Smoke House did not answer requests for comment from the Bronx Times on Thursday.

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Per the letters, businesses that receive the warning and continue to sell marijuana without permission could be permanently barred from getting a license when regulators begin to issue them, which is expected to start happening later this year.

New York state is currently in the process of building out all of the recreational cannabis retail stores for its first group of 100-150 licensees. The state will also offer a 10-year loan to the business owner to cover opening costs.

New York’s regulated recreational marijuana market has been valued at $4.6 billion and could grow to $5.8 billion over the next five years, according to a study by the New York Medical Cannabis Industry Association.

Regulators and cannabis advocates had warned that retailers would exploit a “gifting” provision of the state’s cannabis law by selling non-marijuana products and then giving away “free” cannabis. In some cases, patrons notes that nicotine and other unknown substances were combined into “gifted” cannabis sales at Exhale Smoke House, a few Woodlawn consumers told the Bronx Times.

“There are no businesses currently licensed to sell adult-use cannabis in New York State,” Tremaine Wright, chair of the Cannabis Control Board, said in a statement. “Selling any item or taking a donation, and then ‘gifting’ a customer a bag of untested cannabis does indeed count as a sale under New York’s Cannabis Law.”

So far, regulators have been busy getting the groundwork for the adult-use retail industry in motion, with a series of proposed rules for packaging, labeling, advertising and testing requirements approved by the control board last month.

Additionally, according to the board, there’s been enough applications and interest in the state’s adult-use cannabis cultivator market to ensure enough product when recreational sales launch by the end of this year.

But the interim phase between the enactment of legislation legalizing possession and the implementation of rules for sales has created some confusion and also led to some actors seeking to profit in a currently unregulated market.

As it stands, adults 21 and older can possess and publicly consume cannabis, as well as gift marijuana to other adults as long as they aren’t being compensated.

To take part as one of the state’s first operators, business owners will be required to set up shop in one of those preselected storefronts, according to Reuben McDaniel III, president and CEO of the Dormitory Authority of the State of New York, in an interview with the Albany Business Review.

Reach Robbie Sequeira at rsequeira@schnepsmedia.com or (718) 260-4599. For more coverage, follow us on Twitter, Facebook and Instagram @bronxtimes

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