Amd §132, Cannabis L; amd Part 4 Title W Title Head, add Art 455 §455.00, Pen L
 
Permits municipalities to enforce licensure requirements of retail dispensaries by closing retail locations which sell cannabis without a license; allows seizure of the instrumentality of the unlawful sales, including real estate.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8428A
SPONSOR: Rajkumar
 
TITLE OF BILL:
An act to amend the cannabis law and the penal law, in relation to
forfeiture of property involved in the unlawful sale of cannabis
 
PURPOSE OR GENERAL IDEA OF BILL:
To authorize all municipalities to stop operations of unlicensed canna-
bis retailers and-seize merchandise.
 
SUMMARY OF PROVISIONS:
Section 1 is the short title.
Section 2 amends Subdivision 8 of section 132 of.the cannabis law, as
added by section 17 of part UU of chapter 56 of the laws of 2023, to
make unlawfully selling cannabis in connection with a business a class a
misdemeanor, and grants municipalities the authority to order the imme-
diate closure of such business and seize all merchandise.
Section 3 amends the title heading of title W of part 4 of the penal
law, as amended by chapter 920 of the laws of 1969, to add cannabis.
Section 4 amends the penal law by adding a new section 455 providing for
the seizure and forfeiture of property involved in the unlawful sale of
cannabis, and the'permitted sale of property other than cannabis and
cannabis-infused products.
Section 5 is the effective date.
 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
The A-print amends Section 2 to clarify the terms to order closure.
 
JUSTIFICATION:
The Marihuana Regulation and Taxation Act of 2021 established a licen-
sure process for retail dispensaries legally to sell recreational adult
use cannabis. It vested a Cannabis Control Board with the authority to
issue stop work orders and direct seizure of merchandise from unlawful
retailers. The lack of authority for municipalities to interdict unlaw-
ful retailers, combined with limited resources from the Board, has
resulted in the proliferation of so-called "smoke shops" openly selling
illegal, unregulated cannabis and other contraband with near total impu-
nity. In New York City alone, there are an estimated 1,500 illegal smoke
shops. Mayor Eric Adams remarked, "I could clear up the smoke shops
problem in 30 days. They haven't given us the power."
The vast amount of contraband and loose cash in these smoke shops have
made them tantalizing targets for robberies and hotbeds of crime.
This has put communities, shop employees, and their customers in extreme
danger. Robberies of smoke shops in New York City increased from 137 in
2021 to 593 in 2022. At least five people were fatally shot in smoke
shops in 2023. These shops are also unfair competition to licensed
dispensaries, who cannot afford to sell their rigorously tested and
regulated cannabis at the prices, smoke shops offer.
The Stop Marijuana Over-proliferation and Keep Empty Operators of Unli-
censed Transactions (SMOKEOUT) Act grants all municipalities across our
Great State the authority to order the closure of unlicensed cannabis
retailers and seize all merchandise, swiftly ending the blight of ille-
gal smoke shops once and for all.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
8428--A
2023-2024 Regular Sessions
IN ASSEMBLY
December 29, 2023
___________
Introduced by M. of A. RAJKUMAR, ARDILA, BENEDETTO, ALVAREZ, ZACCARO,
BERGER, PHEFFER AMATO -- read once and referred to the Committee on
Economic Development -- recommitted to the Committee on Economic
Development in accordance with Assembly Rule 3, sec. 2 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the cannabis law and the penal law, in relation to
forfeiture of property involved in the unlawful sale of cannabis
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "stop mari-
2 juana over-proliferation and keep empty operators of unlicensed trans-
3 actions (SMOKEOUT) act".
4 § 2. Subdivision 8 of section 132 of the cannabis law, as added by
5 section 17 of part UU of chapter 56 of the laws of 2023, is amended to
6 read as follows:
7 8. Any person who knowingly and unlawfully sells, gives, or causes to
8 be sold or given, in connection with the operation of a business or at
9 the business location, any cannabis or cannabis products for which the
10 sale of such products requires a license, permit, or registration under
11 this chapter [where such person owns and/or is principally responsible
12 for the operation of a business where such products were sold, given, or
13 caused to be sold or given] without having obtained a valid license,
14 permit or registration therefor shall be guilty of a class A misdemea-
15 nor. A municipality shall have the authority to order the immediate
16 closure of any business which is found to have violated the provisions
17 of this section, or of any business where a violation of this section or
18 any other violation exists that poses an immediate threat to public
19 health and safety; and to seize any merchandise related to such
20 violation or violations including cannabis, cannabis related products,
21 tobacco, tobacco related products and any proceeds relating thereto
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13780-09-4
A. 8428--A 2
1 pursuant to the provisions of article four hundred fifty-five of the
2 penal law. For the purposes of this subdivision, an "immediate threat
3 to public health and safety" shall include, but is not limited to, the
4 presence of any cannabis or cannabis products in connection with a
5 violation of this section; the presence of any cigarette or tobacco
6 products in connection with a violation of section eighteen hundred
7 fourteen of the tax law; the presence of any schedule I substance as
8 defined by section thirty-three hundred six of the public health law; or
9 a violation of article thirteen-F of the public health law, including
10 the presence of a substance or product whose sale is prohibited under
11 such article. For the purposes of this section, "operation of a busi-
12 ness" shall mean engaging in the sale of, or otherwise offering for
13 sale, goods and services to the general public, including through indi-
14 rect retail sales.
15 § 3. The title heading of title W of part 4 of the penal law, as
16 amended by chapter 920 of the laws of 1969, is amended to read as
17 follows:
18 PROVISIONS RELATING TO FIREARMS, FIREWORKS, PORNOGRAPHY
19 EQUIPMENT, CANNABIS AND VEHICLES USED IN THE
20 TRANSPORTATION OF GAMBLING RECORDS
21 § 4. The penal law is amended by adding a new article 455 to read as
22 follows:
23 ARTICLE 455
24 SEIZURE AND FORFEITURE OF PROPERTY INVOLVED IN THE UNLAWFUL SALE OF
25 CANNABIS
26 Section 455.00 Seizure and forfeiture of property involved in the unlaw-
27 ful sale of cannabis.
28 § 455.00 Seizure and forfeiture of property involved in the unlawful
29 sale of cannabis.
30 1. Any property constituting the proceeds or substituted proceeds of
31 an offense involving the unlawful or unlicensed sale of cannabis; and
32 any property constituting an instrumentality of such offense, including
33 real property, is subject to forfeiture pursuant to this article. Any
34 peace officer, acting pursuant to the special duties of the peace offi-
35 cer, or police officer of this state may seize any property involved in
36 the unlawful or unlicensed sale of cannabis.
37 2. The seized property shall be delivered by the police officer or
38 peace officer having made the seizure to the custody of the district
39 attorney of the county wherein the seizure was made, except that in the
40 cities of New York, Yonkers and Buffalo, the seized property shall be
41 delivered to the custody of the police department of such cities togeth-
42 er with a report of all the facts and circumstances of the seizure.
43 3. It shall be the duty of the district attorney of the county wherein
44 the seizure was made, if elsewhere than in the cities of New York, Yonk-
45 ers or Buffalo, and where the seizure is made in either such city it
46 shall be the duty of the corporation counsel of the city, to inquire
47 into the facts of the seizure so reported to him or her and if it
48 appears probable that a forfeiture has been incurred, for the determi-
49 nation of which the institution of proceedings in the supreme court is
50 necessary, to cause the proper proceedings to be commenced and prose-
51 cuted, at any time after thirty days from the date of seizure, to
52 declare such forfeiture, unless, upon inquiry and examination such
53 district attorney or corporation counsel decides that such proceedings
54 cannot probably be sustained or that the ends of public justice do not
55 require that they should be instituted or prosecuted, in which case, the
A. 8428--A 3
1 district attorney or corporation counsel shall cause such seized proper-
2 ty to be returned to the owner thereof.
3 4. Notice of the institution of the forfeiture proceeding shall be
4 served either (a) personally on the owners of the seized property or (b)
5 by registered mail to the owners' last known address and by publication
6 of the notice once a week for two successive weeks in a newspaper
7 published or circulated in the county wherein the seizure was made.
8 5. Forfeiture shall not be adjudged where the owners established by
9 preponderance of the evidence that the use of such seized property was
10 not intentional on the part of any owner.
11 6. The district attorney or the police department having custody of
12 the seized property, after such judicial determination of forfeiture,
13 shall, by a public notice of at least five days, sell such forfeited
14 property at public sale; provided, however, that cannabis and cannabis-
15 infused products shall not be sold. Any cannabis or cannabis-infused
16 products which have been determined to be subject to forfeiture shall be
17 destroyed in accordance with regulations to be established by the divi-
18 sion of the state police. The net proceeds of any permitted sale, after
19 deduction of the lawful expenses incurred, shall be paid into the gener-
20 al fund of the county wherein the seizure was made except that the net
21 proceeds of the permitted sale of property seized in the cities of New
22 York, Yonkers and Buffalo shall be paid into the respective general
23 funds of such cities.
24 7. Whenever any person interested in any property which is seized and
25 declared forfeited under the provisions of this section files with a
26 justice of the supreme court a petition for the recovery of such
27 forfeited property, the justice of the supreme court may restore said
28 forfeited property upon such terms and conditions as he or she deems
29 reasonable and just, if the petitioner establishes the defense set forth
30 in subdivision five of this section and that the petitioner was without
31 personal or actual knowledge of the forfeiture proceeding. If the peti-
32 tion be filed after the sale of the forfeited property, any judgment in
33 favor of the petitioner shall be limited to the net proceeds of such
34 sale, after deduction of the lawful expenses and costs incurred by the
35 district attorney, police department or corporation counsel.
36 8. No suit or action under this section for wrongful seizure shall be
37 instituted unless such suit or action is commenced within two years
38 after the time when the property was seized.
39 § 5. This act shall take effect immediately.