New York regulators are cracking down on unlicensed marijuana companies engaged in “gifting.” a practice in which businesses allegedly sell a product or service and give away cannabis in return.
The state’s Office of Cannabis Management sent cease-and-desist letters warning that “illicit sales must stop immediately” or companies involved risk losing their ability to get a license in the legal industry as well as fines and criminal penalties.
According to a state news release, the letters explain that while cannabis use has been legalized for those 21 and older, by law, the drug cannot be sold without a business license.
The letter stipulated that the practice of gifting is illegal under the state’s Marijuana Regulation and Taxation Act (MRTA).
Regulators identified more than two dozen alleged violators and sent them cease-and-desist letters.
“We want to make sure these operators fully understand the law and the consequences they face and now that these letters have been sent, we fully expect them to cease and desist their activities – if they don’t, we will take action,” OCM Executive Director Chris Alexander said in the release.
Get the MJBizDaily Extraction Buyers Guide, now available.
This free resource offers practical business tips and valuable insights from cannabis extraction professionals to help plan or scale your extraction or processing operation with confidence.
Inside the MJBizDaily Extraction Buyers Guide:
- In-depth guidance for planning a CBD extraction business
- Best practices in sourcing solvents + solventless materials
- Lessons in shopping for extraction/processing equipment
- Tips for outfitting a facility for psilocybin mushroom extraction
- And more!
The only legal way to buy marijuana in the state is through the licensed medical cannabis program.
Though a recreational marijuana program was signed into law last March, no adult-use business licenses have been issued to date.