The New York Cannabis Control Board (CCB) has officially approved rules that allow adults over 21 to cultivate cannabis at home, as of June 11. Now adults can care for a maximum of six plants, with three immature plants and three mature. Residences with more than one adult can have up to 12 plants (six immature and six mature).

Additionally, new rules take place for possession in regard to a person’s crops. “You can have up to five (5) pounds of trimmed cannabis and the equivalent weight in concentrates in or on the grounds of their private residence,” the Office of Cannabis Management wrote in its law breakdown. “Individuals can carry and transport up to three (3) ounces of cannabis and 24 grams of concentrates within the state.”

Cannabis can be grown anywhere that a person owns or rents such as a “room, home, apartment, mobile home, co-op, or other residential spaces.” Landlords cannot refuse to rent a space to a person, or penalize a tenant, unless they are at risk of losing federal funding or benefits.

The rules also cover how residents can legally obtain cannabis plants. Seeds will now be available at commercial retailers, but immature plants can also be purchased by numerous licensed cannabis businesses as well.

The OCM warned of the responsibilities of the grower, specifically when it comes to processing their flower into other cannabis products. “If you’re making at home products with cannabis, like tinctures or butters, the use of flammable materials is prohibited because they are not safe for home use,” the OCM stated. “Consider alternative extraction methods such as heat, water or fermentation.”

The OCM also mentioned the need to reduce cannabis odors. “You must take reasonable measures to prevent cannabis odor from becoming a nuisance to neighboring residents such as co-planting items like lavender in an outdoor garden or using a carbon filter for indoor cultivation,” the information document continued. Lastly, the agency warned growers to cultivate away from the public eye, either by installing fences or tall, busy plants to add privacy to outdoor property.

In the realm of safety, the OCM suggested that growers choose LED lights to reduce power usage and risk of electric overload and recommended that growers seek expertise from an electrician about the setup. It also stressed the importance of proper ventilation to ensure that cannabis does not become moldy.

These rules were originally approved in February 2024, which was followed by a 60-day public comment period. The CCB voted on final regulations for cultivation on June 11.

Also on June 11, New York Gov. Kathy Hochul announced that the CCB has approved another 105 adult-use cannabis licenses. “New York is building a robust and equitable legal market that is driving significant economic growth within our communities,” said Hochul. “The issuance of 105 additional adult-use licenses is just the next step in developing the nation-leading industry New Yorkers expect and deserve.” This includes 25 cultivator licenses, 22 distributor licenses, 22 microbusiness licenses, 19 processor licenses, and 17 dispensary licenses. Additionally, 45 out of these 105 licenses are transitioning adult-use conditional cultivators (AUCC) or adult-use conditional processors (AUCP).

During the meeting, the CCB also denied licenses to 100 applicants that weren’t eligible or had already received a license from a different application.

CCB chair Tremaine Wright said in a statement that progress continues to push New York’s cannabis industry forward. “We continue to prioritize our market’s expansion, and commitment to our nation-leading cannabis market, by providing New Yorkers with a wide range of choice and opportunity to participate,” Wright said. “Today’s license approvals, and the introduction of home cultivation brings us one step closer to setting a new standard that centers growth, equity, and safety.”

So far in 2024, the CCB has approved a total of 654 cannabis licenses, while there are currently 132 adult-use cannabis dispensaries operating in the state.

Meanwhile, cannabis sales continue to increase in the state as well. The governor and OCM confirmed that in May, cannabis sales reached $4.4 million (for a total of $46.2 million). They project that by early June the state will have collected more than $200 million in sales.

The governor’s office attributes the success of its Social and Economic Equity (SEE) program as one of the reasons why the industry is thriving. The press release stated that 57 of the 105 new applicants (about 54%), are SEE applicants, which breaks down into “five Community Development Initiative participants, seven distressed farmers, 22 minority-owned businesses, seven service-disabled veteran-owned businesses, and 16 women-owned businesses.”

In May, the governor’s office stated that OCM executive director Chris Alexander would be stepping down this September following Hochul’s reevaluation of the agency and its leadership. The office described Hochul’s action as “an operational overhaul” which “follows the release of a 30-day assessment conducted by a team of individuals under the leadership of the Commissioner of the Office of General Services Jeanette Moy, that identified significant structural limitations to the Office of Cannabis Management that have affected the agency’s ability to fulfill its mandate to efficiently establish New York State’s cannabis marketplace.”

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New York Gov. Kathy Hochul last week announced a significant overhaul of the state’s Office of Cannabis Management, including a leadership change at the top of the agency.

The governor’s office said in a press release on Friday that she had “directed an operational overhaul” of the agency, which “follows the release of a 30-day assessment conducted by a team of individuals under the leadership of the Commissioner of the Office of General Services Jeanette Moy, that identified significant structural limitations to the Office of Cannabis Management that have affected the agency’s ability to fulfill its mandate to efficiently establish New York State’s cannabis marketplace.”

Hochul detailed the changes at a press conference in Albany, where the New York Times reported that “Chris Alexander, the executive director of the Office of Cannabis Management, was notably absent.”

According to the Times, Alexander “will step down at the end of his three-year term in September.”

Hochul called for the assessment earlier this year, saying at the time that New York’s legal cannabis rollout had been a “disaster.” Moy was directed to assemble a team to conduct a 30-day review of the office of Cannabi Management. In a letter to Hochul sent last week, Moy said that it was “clear from speaking to operational staff that they are dedicated, mission-driven, and working very hard,” and that in “order to alleviate pressures on staff, the task force took immediate action to recruit for vacant license processing positions to increase the size of the licensing team by 40%, and to explore technology like softphones to improve the hybrid work experience.”

Moy said that the task force “outlined recommendations to enhance customer service and expedite the opening of Adult-Use Retail businesses in New York State’s legal cannabis market.”

“It was a priority of the task force to craft recommendations that would enable this agency to be more transparent, efficient, and responsive to all New Yorkers. In conjunction with your recently announced Enforcement Task Force to shut down illegal cannabis stores, the recommendations in this report will enable OCM to maintain and build upon our State’s commitment to social equity, while maturing into a world-class regulatory agency for a thriving New York State cannabis market,” Moy said.

In Friday’s press release, the governor’s office said that the “assessment makes comprehensive recommendations to end the bottleneck of license applicants and improve communication with applicants and licensees – transforming the Office’s capacity to expand safe, legal cannabis operations across the state.”

“Based on the assessment’s findings, Governor Hochul announced a series of immediate actions to reform the licensing processes and increase enforcement against illegal storefronts. The Governor also announced the establishment of a $5 million grant program to help CAURD licensees and previewed next week’s launch of the Cannabis Enforcement Task Force,” the announcement said.

New York’s legal cannabis market has had a sluggish rollout; according to the New York Times, there are only 122 legal recreational cannabis dispensaries in the state, while “the number of illicit shops in New York City alone has nearly doubled to 2,900.”

“At the end of April, more than 5.600 applications, mostly for retail and craft businesses that submitted them as far back as August 2022, were still waiting to be reviewed,” the Times reported.

The governor’s office said that the “assessment identified significant impediments to the Office’s effective processing and approval of applicant licensure.”

“Without best capability to fulfill the licensing role, the individuals this process is designed to help are exhausting substantial resources navigating it and risk being left behind. Delays in the legal marketplace have created a vacuum for illegal storefronts to proliferate and squeeze out CAURD licensees. The reforms announced today will create additional capacity for closing illegal storefronts and lifting up legal operators,” the press release said.

Hoy said in a statement on Friday that the “multi-agency task force created to assess the Office of Cannabis Management has identified several steps the agency can take to unclog the bottleneck of applications by improving communication with applicants and streamlining the application process.” 

“The proposals outlined in the task force’s report will improve transparency and open lines of communication in the application process while boosting the state’s efforts to meet Governor Hochul’s commitment to equity in New York’s cannabis market,” Moy said.

In a statement, Hochul thanked Moy and her team “for their hard work and thoughtful assessment,” saying she looks forward “to working with OCM to implement the report’s recommendations and transform New York’s cannabis industry.”

“We promised to build the strongest, most equitable legal cannabis market in the nation, and we’re announcing long-needed steps to make New York’s cannabis program work as promised,” Hochul said.

But the Times said that the report “immediately drew backlash from critics who said it painted an incomplete portrait,” with some arguing that “it omitted or glossed over the role of the governor, the Legislature and the many lawsuits against the agency in the challenges facing the cannabis program.”

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New York’s state cannabis regulatory agency this week detailed its latest action to crack down on unlicensed cannabis shops. The New York Office of Cannabis Management (OCM) released a report on its efforts, noting it was the second in a monthly series of enforcement action updates against unlicensed cannabis shops across the State.

The agency reported that during November, investigators from OCM and the New York Department of Taxation and Finance (DTF) inspected 71 shops suspected of selling cannabis without a license, including re-inspections of 13 of the retailers. The inspections resulted in the seizure of 812 pounds of cannabis flower, 701 pounds of weed edibles and 61 pounds of concentrates. The OCM estimated the value of the seized weed products to be $7,284,986.

Last month’s enforcement actions brought to 350 the OCM’s total number of inspections of suspected unlicensed weed shops since beginning the effort in October. The agency, which was created after New York lawmakers legalized cannabis in the state in 2021, pledged to continue inspections of illicit cannabis retailers in conjunction with DTF investigators every week.

OCM Reports Court Victories

The OCM also reported on court victories in its effort to reign in New York’s unlicensed cannabis market. On November 21, OCM, in collaboration with the Office of the Attorney General (OAG), won its first petition for emergency relief under a new section of the state’s cannabis law that went into effect earlier this year. In the case, the court issued a permanent injunction and one-year permanent closing order against unlicensed operator David Tulley of “I’m Stuck” in Wayne County. The Court agreed with OCM and the OAG that Tulley had engaged in the unlicensed sale of cannabis and rejected Tulley’s argument that the “cannabis consulting business model” did not require a state-issued license.

“This victory established an important precedent allowing the State to seek longer term closures for businesses found to be illegally selling cannabis,” the OCM noted in a December 4 statement from the agency.

Additionally, on November 9 OCM and OAG secured a temporary restraining order and temporary order to close and padlock a shop against the unlicensed operator George West of Jaydega 7.0 in Canandaigua, New York. A hearing on the request for a permanent injunction and closure of the retailer is scheduled for next month in Ontario County Supreme Court. 

Fines As High As $20,000 Per Day

Fines for the illegal sale of cannabis start at $10,000 per day and can be increased to $20,000 for the most “egregious conduct,” the OCM noted. An additional fine of $5,000 can be levied for the removal of a closure order, and the inspected businesses may also be subject to additional violations and penalties under the state’s tax laws. Enforcement legislation passed in May 2023 also authorizes OCM to seek a state court order to padlock businesses found to be in repeated violation of the law. The new law also makes it a crime to sell cannabis and cannabis products without a license.

“As we look ahead to this next chapter in New York’s cannabis market, we continue to prioritize safety across the state by working diligently to shut down illegal operators,” OCM executive director Chris Alexander said in a statement on Monday. “The number one remedy for the problem of these illicit shops is getting more legal businesses open.”

“New Yorkers want to know where their products are coming from, and they know they can rely on safe, trusted, and locally grown cannabis when they walk into one of our legal dispensaries,” Alexander added. “We will continue to seize illegal products, and we know that the collaborative work continues across all levels of government to address this public health crisis.”

Michelle Bodian, a partner in the New York office of the Vicente LLP and a member of the cannabis law firm’s licensing and regulatory compliance efforts in the state, said that much more action from regulators will be required before the illicit market can be contained.

“I appreciate that OCM is making an effort to be more transparent with the status of enforcement efforts; however, based upon these stats it seems like NY has a long road ahead,” Bodian wrote in an email to High Times. “I am cautiously optimistic the education and collaboration with municipalities will result in a rapid uptick in enforcement.”

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Regulators in New York announced this week that the state would double the number of cannabis retailer licenses, bringing the total number of Conditional Adult-Use Retail Dispensary (CAURD) Licenses for recreational marijuana dispensaries to 300 instead of the 150 originally planned. The new licenses, which will be selected from an existing pool of qualified business applicants, will be issued proportionally throughout New York, doubling the number of licenses in each of 14 regions of the state.

In a statement released on Tuesday, the Cannabis Control Board and the Office of Cannabis Management announced that increasing the number of licenses “will further advance New York State’s Seeding Opportunity Initiative, which provides for the state’s first legal adult-use retail dispensaries to be operated by those most impacted by the prohibition of cannabis or by nonprofit organizations whose services include support for the formerly incarcerated.”

“With this expansion, more entrepreneurs will be able to participate in the first wave of this industry, allowing them to capitalize on the growing demand for cannabis products,” said Tremaine Wright, chair of the Cannabis Control Board. “As more businesses enter this market, the innovation and competition will increase, leading to better quality experiences for consumers. The expansion of New York’s cannabis market will benefit everyone involved in this exciting industry.” 

New York’s Office of Cannabis Management (OCM) received about 900 applications for CAURD licenses from prospective business owners. To date, the Cannabis Control Board has issued 66 provisional CAURD licenses, with the first shop opening in late December. In April, the OCM will make recommendations to the board on the majority of the remaining applications in the areas of the state not impacted by a November court injunction blocking the agency from awarding retail dispensary licenses in five regions of the state.

$200 Million Fund To Support New York Licensees

The CAURD program, which provides licenses to justice-involved individuals, initially allowed for up to 150 businesses to receive a provisional CAURD license. This effort was enhanced through the creation of the New York State Social Equity Cannabis Fund, a $200 million public-private partnership providing renovated, ready-to-open retail locations to the 150 licensees. The OCM characterized the fund as a first-of-its-kind effort in the nation designed to help reduce the barriers independent entrepreneurs face in raising capital to launch a business in the cannabis industry.

“Doubling the amount of available Conditional Adult-Use Dispensary Licenses will help kickstart the growth of New York’s cannabis industry,” said Damian Fagon, the OCM’s chief equity officer. “More stores means more locations for New York farmers to sell their harvests, more convenience for New York customers to make the right decisions and purchase safer and legal products, and twice as many opportunities for New Yorkers harmed by over-policing during cannabis prohibition.”

In December, the OCM announced that CAURD licensees would also be allowed to secure their own business locations without seeking support from the social equity fund, potentially freeing up resources for some of the newly authorized CAURD licenses announced today. The initial 150 approved CAURD licensees will be prioritized to receive resources if they choose a location supported by the fund. Applicants chosen for the additional 150 CAURD licenses announced this week will be given access to any remaining fund resources.

“New York is doing something special when it comes to launching our cannabis industry, and now we’re doubling the impact of our Conditional Adult-Use Retail Dispensary program,” said Chris Alexander, executive director of the Office of Cannabis Management. “It’s been truly exciting to see the positive energy around our efforts to support entrepreneurs who previously suffered at the hands of New York State. We will continue creating real opportunities for qualified applicants who’ve been shut out from legal cannabis markets across the country.” 

Michelle Bodian, a partner at the cannabis and psychedelics law firm Vicente LLP, said that Thursday’s announcement offers new opportunities for entrepreneurs eager to enter New York’s cannabis industry.

“Doubling the number of available CAURD licenses drastically changes the calculus for hopeful CAURD applicants,” Bodian wrote in an email to High Times. “As only a limited number of licenses have been awarded to date, this expansion provides a huge first mover advantage for the remaining approximate 230 licenses to be awarded.”

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Regulators in New York this week lifted a stringent requirement that cannabis growers in the state had decried as an “existential threat” to their operations. 

NY Cannabis Insider reports that the state’s Office of Cannabis Management on Tuesday sent an email to cultivators to note that it had “updated its Laboratory Testing Limits document to remove the pass/fail limits associated with the Total Viable Aerobic Bacteria Count and Total Yeast and Mold Count for unextracted cannabis products (e.g. cannabis flower, pre-roll, etc.).”

New York cannabis growers lamented that the testing limits for bacteria, yeast, and mold were far too onerous, and jeopardized their ability to get the product in front of customers. 

The state gave conditional licenses to cultivators earlier this year to begin growing the first adult-use cannabis crop outdoors. 

But growing outdoors made those testing limits difficult to attain. 

“This is a step in the right direction for the success of this new market,” said Aaron Leentjes, a conditional cultivator and co-founder and owner of UNIFI Cannabis, as quoted by NY Cannabis Insider. “Because growers were not given an option to cultivate indoors, it’s nice to see OCM adjusting their testing guidelines to be more in line with the realities of outdoor cultivation.”

In its email sent on Tuesday, the Office of Cannabis Management said that, although testing will still be conducted, “there will not be a defined limit for unextracted cannabis products in the adult-use program.”

“It is the responsibility of the licensee to consider these results and any impact to the stability and expiration dating of the product, as well as any risks to the health of consumers,” the OCM said in the email, as quoted by NY Cannabis Insider. 

Recipients of the first two-year “conditional cultivator” licenses were given the green light to grow up to an acre’s worth of weed outdoors, although they were also permitted to keep some plants in greenhouses. 

“There’s a market that we’re building for small players, for big players, for medium-sized players, for family businesses, for big corporations as well,” Chris Alexander, executive director of the Office of Cannabis Management, said of the first round of cultivation this summer. “We do think it will be sufficient to provide that initial supply to our dispensary locations that we get up and running.” 

New York Gov. Kathy Hochul, who is facing re-election next week, said last month that the first state-regulated marijuana dispensaries are still on track to open by the end of this year.

“We expect the first 20 dispensaries to be open by the end of this year,” Hochul said at the time. “And then every month or so, another 20. So, we’re not going to just jam it out there. It’s going to work and be successful.”

In that same interview, Hochul took credit for getting the legal marijuana program up and running after she took over for former New York Gov. Andrew Cuomo last August. 

“Talk about the rollout being jammed up,” she said. “When I became governor, nothing had happened. Nothing. It was shut down because there was a battle between the administration and the legislature over who would be the executive director and the chairs of the cannabis review boards,” she said. “So, I was given a lot of credit because within one week, I named people. I got things going. So, when I speak to people about being part of this industry, the first thing they say is ‘thank you.’ Because otherwise we could still be waiting and waiting and waiting, even for the most basic steps to be taken. So we’ve been moving along quickly.”

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New York’s Office of Cannabis Management said Thursday that it will begin accepting applications for adult-use cannabis retail licenses later this month.

Would-be dispensary owners will be able to submit their applications beginning on August 25. The application is scheduled to close on September 26.

In the announcement on Thursday, the agency reminded applicants that “New York’s first legal adult-use retail dispensaries will be operated by those most impacted by the enforcement of the prohibition of cannabis, who will make the first sales of adult-use cannabis in New York with products grown by New York farmers,” a key tenet of the state’s “Seeding Opportunity Initiative” that was unveiled earlier this year.

“Today’s announcement brings us to the precipice of legal, licensed cannabis sales in New York State,” Tremaine Wright, chair of the state Cannabis Control Board, said in a statement on Thursday. “With the Seeding Opportunity Initiative, New York has affirmed our commitment to making sure the first sales are conducted by those harmed by prohibition. We’re writing a new playbook for what an equitable launch of a cannabis industry looks like, and hope future states follow our lead.”

The board said that prospective applicants must meet the following qualifications in order to receive a dispensary license: “have a marijuana-related offense conviction that occurred prior to the passage of the Marijuana Regulation and Tax Act (MRTA) on March 31, 2021, or have had a parent, legal guardian, child, spouse, or dependent with a pre-MRTA marijuana-related offense conviction in the State of New York”; and “have experience owning and operating a qualifying business.”

 “In just two weeks my team will start accepting applications for adult-use retail cannabis dispensaries. This is a monumental step in establishing the most equitable, diverse, and accessible cannabis industry in the nation,” Chris Alexander, executive director of the Office of Cannabis Management, said on Thursday. “We’ve worked to make this application as simple as possible for all interested applicants, and I cannot emphasize it enough that you do not need any legal expertise to fill this application out.”

New York legalized recreational cannabis for adults last year, when then-Gov. Andrew Cuomo signed a bill into law. The state’s first recreational marijuana crop was planted in the spring, and the first dispensaries have been slated to open at some point before the end of the year.

“New York’s farms have been the backbone of our state’s economy since before the American Revolution, and now, New York’s farms will be at the center of the most equitable cannabis industry in the nation,” New York Gov. Kathy Hochul said in April after the state approved the first 50 cultivation licenses. “I’m proud to announce the first adult-use cannabis cultivation licenses in the state, and I’m proud of the work the Office of Cannabis Management and the Cannabis Control Board are doing to get adult-use cannabis sales up and running as fast as possible without compromising our mission to uplift communities and individuals most impacted by the past century of cannabis prohibition.”

Since taking over for Cuomo, who resigned last summer amid allegations of sexual misconduct, Hochul has prioritized getting the state’s recreational cannabis market up and running.

Last month, Hochul announced a $5 million grant in support of cannabis industry job training programs at New York community colleges.

“New York’s new cannabis industry is creating exciting opportunities, and we will ensure that New Yorkers who want careers in this growing sector have the quality training they need to be successful,” Hochul said at the time. “Diversity and inclusion are what makes New York’s workforce a competitive, powerful asset, and we will continue to take concrete steps to help ensure everyone has the opportunity to participate in the cannabis industry.” 

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With legal sales of recreational cannabis in New York still months away, state regulators are cracking down on unlicensed businesses that have jumped the gun and are already selling weed. Last week, officials with the New York Office of Cannabis Management (OCM) publicly identified 52 businesses that have been sent cease-and-desist orders directing the shops to stop all illicit cannabis sales.

“You are hereby directed to cease any, and all, illegal activity immediately,”  read the cease-and-desist letters quoted by The Gothamist. “Failure to cease this activity puts your ability to obtain a license in the legal cannabis market at substantial risk.”

The OCM added that the identified retailers were falsely depicting their businesses as licensed cannabis dispensaries. OCM Chair Tremaine Wright said in a press release that unlicensed sales, including via businesses that provide ostensibly free marijuana products with the purchase of other merchandise, are illegal and pose a health risk to the community.

“There are no businesses currently licensed to sell adult-use cannabis in New York State. 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,” Wright said in a statement from the agency. “You need a license to sell cannabis in New York. Licensed sales and a regulated market are the only way New York’s customers will be assured that the cannabis products they are purchasing have been tested and tracked from seed to sale. Sale of untested products put lives at risk.”

Businesses Face Permanent Ban from Legal Weed Industry

The cease-and-desist letters sent by the OCM note that continued illicit sales of marijuana by the identified retailers will make the businesses ineligible to receive a cannabis business license from the agency in the future. If the business storefronts named by the agency fail to end operations immediately, they will be referred to Cannabis Control Board “for permanent barring from receiving any cannabis licenses in New York State,” the agency stated.

“These stores are masquerading as licensed, regulated businesses, but they are nothing of the sort. They aren’t creating opportunity, they are creating confusion – New Yorkers think they’re buying a high-quality, tested product when they aren’t,” said Chris Alexander, executive director of the Office of Cannabis Management. “Not only are these stores operating in violation of New York’s Cannabis Law, but they also are breaking state tax and several municipal laws. I look forward to working with other regulatory bodies across the state to hold these stores accountable for their flagrant violations of the law.”

The identified businesses were originally sent cease-and-desist orders in February, advising them that their operations were illegal under the Marijuana Regulation and Taxation Act (MRTA), which was passed by New York lawmakers last year. The OCM announced the regulatory action at the time but declined to publicly identify the affected retailers. But after pressure from local media, the OCM made the list of storefronts that had been warned by the agency available last week.

“We have an obligation to protect New Yorkers from known risks and to strengthen the foundation of the legal, regulated market we are building. We will meet the goals of the MRTA to build an inclusive, equitable and safe industry,” Wright said in February. “Therefore, these violators must stop their activity immediately, or face the consequences.”

More Retailers Being Investigated

The OCM also noted last week that it has received information from law enforcement and the general public about additional retailers who may be selling cannabis in violation of the law and will be reviewing the tips for possible additional regulatory action. The agency added that until sales of adult-use begin at licensed retailers, which is expected to happen later this year, the only legal way to procure safe, lab-tested cannabis is through the state’s regulated medical marijuana program.

“New York is building the most equitable cannabis industry in the nation, one that prioritizes those communities most harmed under cannabis prohibition. Stores selling unregulated cannabis products without licenses undercut those efforts. Plain and simple,” said Damian Fagon, OCM chief equity officer. “Illicit stores don’t contribute to our communities, they don’t support our public schools and they don’t protect consumers. That’s why we’re working with partners across [the] government to investigate these operations and hold them accountable.”

One of the operations identified last week by the OCM is the Empire Cannabis Club, which has two locations in Manhattan. At Empire, customers purchase a daily or monthly membership to the club and receive cannabis as a free gift. Steve Zissou, a lawyer representing Empire, said that the company is confident that its operation is legal under the MRTA, which defines what constitutes a “sale” of cannabis and specifically allows the transfer of up to three ounces of cannabis “without compensation.”

“Empire’s business model is based on that,” said Zissou. “It’s a non-charitable, not-for-profit cannabis dispensary that does not receive compensation for the transfer of cannabis.”

The attorney added that Empire is prepared to defend its position in court if necessary.

“There’s an old saying: If you want peace, prepare for war,” Zissou said. “And so Empire wants peace, but they’re prepared for war if and when it comes.”

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Another state with legal weed is cracking down on unregulated cannabis retailers. This time, it is lawmakers in Connecticut who are taking on the practice of “gifting,” through which illicit weed shops sell a product (say, a T-shirt) that comes with a cannabis “gift.”

Now, under a bill signed into law last week by the state’s Democratic Gov. Ned Lamont, that loophole could be tightening up.

According to the Connecticut Post, cities in the state “can now fine residents up to $1,000 for gifting a cannabis plant or other cannabis-related product to another individual in exchange for any kind of donation, including an admission fee, or as part of any giveaway such as a swag bag,” while the state itself can “can also separately issue $1,000 fines for failing to pay sales taxes.”

“Gifting” has become a go-to practice for marijuana retailers who haven’t gone through the proper regulatory channels to obtain a license, or who operate in states where cannabis is legal for adults but the regulated market has not yet launched.

The Associated Press reported that unregulated “cannabis bazaars have cropped up [in Connecticut] since the drug was legalized last year,” and “[t]housands of people have attended the events, often paying a fee to be admitted, and exchanged cannabis-related products for other items or received them along with the purchase of an item such as a T-shirt.”

In New York, where adult-use cannabis has been legal since March of last year, regulators have targeted businesses that have purportedly taken part in “gifting,” warning them that the legal retail market does not officially begin until later this year.

The New York Office of Cannabis Management sent cease-and-desist letters in March to a number of businesses it suspected of employing the practice, saying that continuing to do so could jeopardize their prospects for retail licenses.

“New York State is building a legal, regulated cannabis market that will ensure products are tested and safe for consumers while providing opportunities for those from communities most impacted by the over-criminalization of the cannabis prohibition and illegal operations undermine our ability to do that. We encourage New Yorkers to not partake in illicit sales where products may not be safe and we will continue to work to ensure that New Yorkers have a pathway to sell legally in the new industry,” OCM executive director Chris Alexander said in a statement at the time.

And in Washington, D.C., where voters approved a ballot initiative legalizing recreational pot in 2014, medical cannabis suppliers have objected to the practice of “gifting,” arguing that the illicit businesses are hurting their own legal operations.

Despite cannabis’s legal status in the nation’s capital, weed sales remain illegal due to an ongoing Congressional ban on the commercialization of pot there. 

The bill designed to crack down on gifting in Connecticut was proposed earlier this year.

While the measure had support among some cannabis business owners in the state, other weed advocates objected. Businesspeople who engage in gifting have also defended the practice.

“I do not deserve to be punished for this, nor does anyone else,” Justin Welch, a member of CT CannaWarriors and the New England Craft Cannabis Alliance, said in defense of the practice at the time of the bill’s introduction. “For too long now, good people have been persecuted for their involvement with cannabis. The grassroots cannabis community that exists here in Connecticut will not cease to exist, whether you pass this bill or not. Moving forward we need sensible cannabis policy that looks more like a craft beer policy.”

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