Penalties For Illegal Marijuana Sales Fails To Pass

A marijuana plant is grown under lights at the Boulder County Caregivers in Boulder, Colo. AP photo

An end-of-session push to further penalize those who sell illegal marijuana has fallen short in the state Legislature.

The state Senate passed legislation (S.9452) that would authorize the state Taxation and Finance Commissioner to revoke the certificate of registration of the sale of adult-use cannabis, increase penalties on those who sell illegal marijuana and make it a class A misdemeanor for a distributor of adult-use cannabis products or a retail seller of adult-use cannabis products to sell the products without proper authorization from the state.

While the bill passed the Senate, it did not pass the Assembly before the end of the legislative session on Thursday. That means the legislative process will begin again in January, and that’s only if lawmakers decide the additional penalties are still necessary as the state’s recreational marijuana industry gets off the ground. The impetus for the additional penalties now has been the businesses that have sprung up to sell marijuana before the state’s regulated marijuana sales system is set up.

“This legislation is necessary to improve the enforcement of prohibitions against selling untaxed adult-use cannabis, including by entities lacking the appropriate registration necessary from the Department of Tax and Finance, and to provide the Tax Department and the Office of Cannabis Management with the ability to safeguard the upcoming legal adult-use cannabis market,” Sen. Liz Krueger, D-New York City, wrote in her legislative justification.

Sen. George Borrello, R-Sunset Bay, said he planned to vote in favor of the bill, but said Krueger’s message didn’t go far enough to stop the illegal sale of marijuana. Borrello and Krueger have had several exchanges over the past two years over marijuana sales in committee meetings and budget hearings.

“I’ve been talking for the last two years about the disaster that is the legalization of recreational marijuana,” Borrello said. “I’m grateful to Sen. Krueger for putting this bill forth but unfortunately I don’t think that it hits all the marks. The reason for that is you can address those folks that are attempting to sell illegal marijuana and try to do things like attack their sales tax, their ability to collect sales tax and things like that, but the real issue is that this body decriminalized the possession of illegal marijuana on day one a full two years before the legal sale of marijuana will take place in New York state.”

The end-of-session rush in 2019 resulted in the state Legislature’s decriminalization of marijuana when agreement to legalize and tax the sale of marijuana fell through. The decriminalization bill reduced low-level criminal charges for unlawful possession of marijuana to a violation that result in a fine similar to a parking ticket, $50 for possessing less than one ounce of marijuana and $200 for one to two ounces.

For Borrello, coupling decriminalization with the slow build-out of the legal marijuana market has created a situation in which people know marijuana is viewed as legal, and those people are stepping into the void created by the absence of the state market.

Earlier this year, the state Office of Cannabis Management sent letters to more than two dozen businesses it suspected of illegally selling marijuana, threatening fines, criminal charges and risks to future licenses to sell legal marijuana. Some businesses have offered marijuana as a gift for people who make a donation or who buy other merchandise in a shop. Others have said they are clubs that acquire cannabis and provide paying members with access to the drug.

“Here we are and we still don’t have the first legal sale yet, and marijuana is being sold essentially without any consequence all over New York state from our native territories where they have complete sovereignty to places in New York City where they actually have a farmers market for pot that is set up every week, I’ve heard, and sticker shops and everything else. The only way you’re going to add this is by reversing this idea of decriminalizing the possession of illegal marijuana. That’s the only way you’re going to solve this problem. So this will take a slight bite out of it, but in the end, until we address the fact that New York state has the most irresponsible legalization of recreational marijuana in the United States, we’re never going to get our arms around this problem.”


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