Hochul slams websites for listing illegal pot shops in NY

(The Center Square) — New York Gov. Kathy Hochul is slamming big tech social media companies for contributing to a proliferation of illegal pot shops that are siphoning away potential tax revenue from the state.

In remarks on Wednesday, Hochul accused Google Maps, Yelp and other mapping websites of providing details and locations of unlicensed storefront pot vendors in New York City and other urban areas.

"They’re allowing the sowing of a lot of confusion in the marketplace,” Hochul told reporters at a briefing. "Now I’m calling on all these platforms to step up, do the right thing and be part of the solution."

Hochul said tech companies need to prohibit the promotion of unlicensed storefronts "selling potentially dangerous products on their platforms."

"Strengthening New York’s equitable cannabis industry and protecting the hard-working small business owners operating in the legal market are top priorities, and the best way to accomplish those goals is by expediting the shutdown of unlicensed shops," the Democrat said in remarks.

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The Office of Cannabis Management and the Department of Taxation and Finance have issued more than $25 million in fines to unlicensed marijuana operators but only managed to collect $22,500 from the violators, data show.

Hochul proposed new legislation to beef up enforcement against illicit cannabis sales by helping regulators and local governments impose higher fines and more quickly shut down unlicensed vendors.

New York legalized recreational cannabis in 2021 under legislation signed by then-Gov. Andrew Cuomo, allowing cultivation and retail sales and setting up a system of taxation and regulation for the new industry. To date, about 77 retail pot shops have opened, state regulators say.

Under the law approved by the state Legislature, regulators gave the first retail cannabis licenses to convicted pot dealers as part of a licensing program that is now being challenged in the courts.

The rollout has been slowed by legal challenges, including a ruling by a New York judge that halted new licenses under a program that favors people with previous drug conviction charges. The ruling stemmed from a legal challenge by veterans who argued that the system of issuing licenses to certain social equity applicants violates the state Constitution.

Illegal storefront operations have proliferated over the past year amid the delays in licensing legal pot shops, prompting calls to Hochul to crack down on unlicensed sales. New York City Mayor Eric Adams has estimated there are more than 2,000 illegal pot shops in the city.

In April, Hochul launched a taxpayer-funded public education campaign calling on pot users to “buy legal” and urging them to avoid the black market.

State regulators said adult-use sales in New York state have generated only $150 million last year, despite estimates that sales would top $1 billion during the first year.

To date, at least 23 states, the District of Columbia and the U.S. territory of Guam have legalized recreational marijuana, to the National Conference of State Legislatures. Thirty-eight states have medical marijuana programs.