In New York, hundreds of padlocked marijuana dispensaries have been convicted of violating the law but avoided paying millions of dollars in fines, according to a New York City Council analysis.
Since April, administrative judges have substantiated 516 violations against operators of illegal marijuana dispensaries, imposing fines totaling $5.21 million.
An investigation by the council's Oversight and Investigations Committee found that only 21 fines had been paid, totalling $210,000.
That means $4.98 million in fines remain unpaid for 495 violations, according to the report, which was based on data from the city's sheriff's office and finance department.
“The amount of unpaid fines is staggering,” said City Councilman Gayle Brewer, who chairs the investigation committee.
Since the Adams administration's “Operation Padlock” began in the spring, the city's sheriff's office has issued 1,178 violations to 1,107 unlicensed marijuana retailers, and nearly all of the stores have been padlocked or at least temporarily closed.
Of the 991 violations that went through legal proceedings, 516 were substantiated and 288 were defaulted, resulting in penalties of $2.85 million.
Another 188 violations have been dismissed and 187 are pending review by the city's Administrative Trial Hearings Office.
A measure approved by Gov. Kathy Hokul earlier this year gives the sheriff's office and the New York Police Department the power to immediately padlock unlicensed stores, pending the conclusion of administrative hearings into alleged misconduct.
Unlicensed businesses can be fined $10,000 per day they sell cannabis without a license, increasing to $20,000 per day if they continue to sell without a license after receiving a notice of violation.
Landlords who don't begin eviction proceedings against illegal marijuana dispensaries they rent to could face a $50,000 fine.
Brewer, who will hold a public hearing on the city's marijuana enforcement program on Tuesday, praised the crackdown that has forced hundreds of unlicensed marijuana stores to close.
“This crackdown has hit the illegal market and helped the legal market, so that's good news,” said the city council member who represents an Upper West Side neighborhood overrun with unlicensed smoking-accessory stores.
The analysis found that in one-third of the city council's 51 districts, more than 20 percent of violations were dismissed.
Brewer also is trying to find out how many of the stores that were locked down after being accused of selling marijuana without a license have reopened.
Before the crackdown, Mayor Eric Adams and Sheriff Anthony Miranda estimated there were 2,200 unlicensed smoking paraphernalia stores.
According to the state Bureau of Cannabis Control, there are 189 licensed cannabis dispensaries and delivery shops across New York state, 79 of which are in the city.
The mayor's office said many fines have yet to be collected because the city does not have the authority to collect them, but they are expected to be collected soon.
“We hope to begin collection processes soon, but have already seized $64 million worth of illegal product and are hitting bad actors where it hurts by pursuing their revenue streams. The goal of these operations is always to protect the public safety and health, especially young New Yorkers, and it's clear we are succeeding,” City Hall said in a statement.
