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Governor Hochul Proposes New Legislation to Improve New York’s Nation-Leading Adult-Use Cannabis Industry by Cracking Down on Illegal Cannabis Stores

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Governor Kathy Hochul today proposed new legislation to increase civil and tax penalties for the unlicensed and illicit sale of cannabis in New York. The legislation would also provide additional enforcement power to the Office of Cannabis Management and the Department of Taxation and Finance to enforce the new regulatory requirements and close stores engaged in the illegal sale of cannabis.

“Over the past several weeks I have been working with the legislature on new legislation to improve New York’s regulatory structure for cannabis products,”Governor Hochul said.“The continued existence of illegal dispensaries is unacceptable, and we need additional enforcement tools to protect New Yorkers from dangerous products and support our equity initiatives. I am proud of our continued progress creating the entirely new legal cannabis industry and helping legal dispensaries open their doors to offer safer cannabis products to New Yorkers.”

The new legislation, which is being introduced as a Governor’s program bill in the Senate and Assembly, amends the Tax Law and the Cannabis Law to enable the Office of Cannabis Management (OCM), the Department of Taxation and Finance (DTF) and local law enforcement to enforce restrictions on unlicensed storefront dispensaries. The legislation does not impose any new penalties related to cannabis possession by an individual for personal use and does not allow local law enforcement to perform enforcement actions against individuals.

This legislation, for the first time, would allow OCM and DTF to crack down on unlicensed activity, protect New Yorkers, and ensure the success of new cannabis businesses in New York. The legislation would restructure current illicit cannabis penalties to give DTF peace officers enforcement authority, create a manageable, credible, fair enforcement system, and would impose new penalties for retailers that evade State cannabis taxes. Additionally, it would clarify and expand OCM’s authority to seize illicit product, establish summary procedures for OCM and other governmental entities to shut down unlicensed businesses, and create a framework for more effective cross-agency enforcement effort. Violations of the law could lead to fines of $200,000 for illicit cannabis plants or products and would allow OCM to fine businesses $10,000 per day for engaging in cannabis sales without a license.

Office of Cannabis Management Executive Director Chris Alexander said,“The success of New York’s historic equity-based approach to the cannabis industry depends on upholding our cannabis laws. Entrepreneurs looking to participate in our legal cannabis industry — especially justice-involved individuals looking for a CAURD license — are being economically harmed by bad actors filling their storefronts with products that are questionable, unregulated and potentially dangerous. The Office of Cannabis Management is fully committed to working with our partners across the state to permanently shut these operations down and allow legal, licensed businesses to grow and thrive.”

New York State Acting Commissioner of Taxation and Finance Amanda Hiller said,“New York State is building its cannabis market, while advancing the unique social equity components of the MRTA. Adult-use cannabis taxes fund our schools and drug treatment and public education programs. These taxes also contribute to the New York State Community Grants Reinvestment Fund, which reinvests tax revenue from cannabis sales to communities most impacted by over policing and cannabis prohibition. These new essential tax enforcement capabilities will allow us to crack down on illegal operations and help ensure these overdue opportunities exist for those communities.”

The full legislative text is availablehere.



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The Oregonian: Naked Oregon man wounded by exploding weed pen, lawsuit claims

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Thanks to Vince Sliwoski for tipping us off to this only in Oregon story !

A man who was getting baked while bare of any clothes was seriously injured when his weed pen exploded, a lawsuit filed Friday claims.

Gustavo Mendes now seeks $230,000 from the manufacturer of the malfunctioning marijuana vaporizer and the Eugene pot shop where he bought it, according to allegations in the Lane County Circuit Court suit.

The incident happened Feb. 13, 2023 as the 28-year-old was standing in his bathroom “in a state of undress,” according to the lawsuit.

Mendes took a puff or two and realized the pen was superheating in his hands, the lawsuit says; in a flash, it exploded — spraying burning chemicals onto his eyes, torso and below his waist.

The subsequent fire on the bathroom counter and floor cost $20,000 to repair, while Mendes’ medical bills at a Springfield hospital and Gresham eye care center topped $3,500, the suit says.

After previously earning $68,000 a year as a welder, Mendes is now sensitive to light and must apply eye drops regularly, necessitating a change in careers, according to his attorney.

He had purchased the pen, branded under the name Quantum Alchemy, three days prior at Hwy 99 Cannabis Co. Both the retailer and manufacturer are named as defendants in court papers.

Quantum Alchemy’s website has expired and an email inquiry bounced back.

https://www.oregonlive.com/marijuana/2025/02/naked-oregon-man-wounded-by-exploding-weed-pen-lawsuit-claims.html

 

Quantam has been getting recall notices as far back as 2022 as this OLCC alert testifies.

nr120222-Cannabis-Product-Recall-Pesticide-Bobsled-QuantumAlchemy



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EWeb Page / SEC Docs – SEC Charges Acreage Holdings, Inc. For Accounting Violations

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ADMINISTRATIVE PROCEEDING
File No. 3-22389

January 10, 2025 – The Securities and Exchange Commission today announced settled charges against Acreage Holdings, Inc. for violating the books and records provision of the federal securities laws when it created false records regarding a transfer of approximately $4 million that was temporarily moved into the company’s bank account a few days before the end of Acreage’s 2019 fiscal year.

According to the SEC’s order, Acreage caused an affiliated entity to transfer approximately $4.2 million into Acreage’s bank account on December 26, 2019, with the express understanding that Acreage would return the full amount at the beginning of the new year, which it did on January 3, 2020.  Acreage then allegedly created journal entries and other records that mischaracterized the round-trip transfer, first as a repayment of debt owed by the affiliate and later as a short-term loan to Acreage.  The SEC’s order further finds that after certain employees’ concerns about the round-trip nature of the transaction were escalated to a member of Acreage’s board of directors, Acreage recorded an additional journal entry that effectively reversed the transaction.

The SEC’s order also finds that during the audit of Acreage’s fiscal year 2019 financial statements, Acreage created and provided written documents to the accounting firm conducting the audit that misrepresented and omitted material facts about the round-trip cash transfer.  As a result, the SEC’s order finds that Acreage violated Section 13(b)(2)(A) of the Securities Exchange Act of 1934 by failing to make and keep books, records, and accounts that accurately and fairly reflected the round-trip cash transfer.

Without admitting or denying the findings in the SEC’s order, Acreage agreed to cease and desist from committing or causing violations or future violations of Section 13(b)(2)(A), and to pay a civil penalty of $225,000.

The SEC’s investigation was conducted by Kiran Patel, Nandy Celamy, Russel Feldman and George N. Stepaniuk, and was supervised by Thomas P. Smith, Jr., all of the New York Regional Office.



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Homberg Leaves Dentons For New Post At Gunnercooke

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Peter Homberg writes on Linked In Today

After more than 12 exciting years at Dentons, I’m delighted to share that I have joined the international law firm gunnercooke.

I’m excited to offer my clients truly exceptional service, leveraging gunnercooke’s flexibility, innovation, and collaborative culture to support them closely through their legal challenges, while also shaping and expanding my practice in a direction I’m passionate about.

I look forward to the many exciting projects and cases to come, please reach out if you’d like to know more.

 



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