After months of refusing to disclose which companies received cease and desist letters for operating unlicensed cannabis businesses, New York regulators abruptly posted their names and locations on Thursday.
New York regulators are in the process of launching what will be one of the world’s largest legal cannabis markets, with first sales expected by the end of the year. Regulators are walking a tightrope as they try to bring the state’s longstanding legacy market above ground through regulation: too-stiff penalties could compromise decriminalization efforts, but a too-soft approach could undercut the soon-to-be licensed operators, many of whom will be equity licensees.
Cannabis Wire mapped the addresses of the entities that receive letters and found that six have addresses listed in Manhattan, six in Brooklyn, and two in Queens. None were located on Long Island. Two had addresses listed in the Albany-area.
There were also noticeable geographic clusters, especially for the population, in the Elmira, New York area, where seven letters were sent (Elmira has just over 26,000 residents, per the latest Census). Waverly, New York, the largest village in Tioga County, which sits on the border with Pennsylvania and has just over 4,000 residents, saw four letters.
There also were a couple of noteworthy names: two letters went to Weed World-related entities, which is the brand of the cannabis shops on wheels that have popped up in areas outside New York University and Times Square. And, Empire Cannabis Clubs, which has received widespread media coverage for its flashy Manhattan locations, received two letters.
One effort to try to stamp out these operators came when the Office of Cannabis Management (OCM) told the public on February 8 that it sent roughly two dozen cease and desist letters to unlicensed operators.
Unlicensed cannabis operators repeatedly came up during OCM’s Cannabis Conversations, a series of online events throughout the state during which Tremaine Wright, executive director of the Cannabis Control Board within the OCM, fielded questions about a wide spectrum of cannabis regulatory topics.
During the Central region event in February, Wright answered a question from an attendee about whether the state allowed “sticker stores,” and if not, how they’re being “handled.” Sticker stores have cropped up, especially upstate, where cannabis consumers can purchase stickers and receive cannabis as a “gift.”
“All of them are absolutely illegal. They are offering you cannabis if you purchase something else, and it doesn’t matter if it’s a sticker or if it is a can of coffee or if it’s a t-shirt, all of those exchanges are illegal,” Wright said. “These products are not known to be tested. You don’t know that they’re safe. We’re asking you not to participate in those sales.”
In April, OCM reported that 52 cease and desist letters had been sent. Cannabis Wire asked OCM on May 16 to “share the names of the businesses that received these cease and desist letters” and whether there were “plans for any further enforcement related to unlicensed cannabis operators.”
OCM didn’t answer those specific questions, but commented in part that “these letters are part of active enforcement investigations, at this stage we do not want to do anything to compromise these investigations. We will continue to work with our partners across government to enforce the law.”
Meanwhile, Cannabis Wire filed a public records request seeking the specific names and addresses of the unlicensed operators that received cease and desist letters from OCM.
Cannabis Wire’s request was rejected.
In the rejection response from Rashied McDuffie, deputy general counsel and FOIL records access officer for OCM, he wrote, in part, that OCM “acknowledges the existence of the letters and that an investigation is ongoing based on this review,” however, “the actual letters, particularly the names and addresses contained in said letters, as well as details of the ongoing investigation, are exempt from disclosure because the records were ‘compiled for law enforcement purposes that, if disclosed would (i) interfere with law enforcement investigations or judicial proceedings; (ii) deprive a person of a right to a fair trial or impartial adjudication; (iii) identify a confidential source or disclose confidential infliction; or (iv) disclose confidential information or (v) reveal criminal investigative techniques or procedures, except routine techniques and procedures.’”
The rejection continued, “As you are aware, OCM’s position is that the letters sent to specific entities are all part of OCM’s ongoing investigations. While OCM issued a press release announcing the investigation, only the recipient entities and OCM are aware of the contents of the letters. The release of the entities’ names and addresses in response to your FOIL request may jeopardize the investigation by allowing outside entities to interfere. Furthermore, if such information was made public, future cooperation with OCM from the recipients of those letters or material witnesses whose anonymity is critical to the success of future investigative techniques could be jeopardized. As a result, the specific letters at issue in this FOIL request are being withheld in accordance with Public Officers Law 87(2)(e).”
When Cannabis Wire asked OCM on July 7 why the entities and addresses of the people who received cease and desist letters were released to the public, OCM spokesperson Aaron Ghitelman told Cannabis Wire that OCM has “determined it is in the public’s interest to know the names of these operators so they can be avoided as, despite appearances, they are not licensed and are selling product which has not been tested as required by the MRTA.”
