New York’s retail cannabis industry is still in its infancy, but regulators are already making changes that are meant to enable home delivery.
At the same time, lawmakers are worried the current penalties for selling cannabis without a license will undermine the burgeoning marketplace, which is expected to be a multibillion-dollar sector of the economy.
The first retail businesses are expected to open in the coming weeks, ushering in a new era. But a number of questions remain, including how to punish people for selling without a license and avoiding taxes, as well as how to handle a business that relies exclusively on cash.
Democratic state Assemblywoman Amy Paulin calls out a problem around her suburban district: Stores selling cannabis without a license.
“These particular shops in my district are near schools,” Paulin said. “Little kids are seeing and smelling pot.”
Paulin said the current $250 fine for selling cannabis without a license is not nearly enough to stop the practice — and could undermine the retailers who go through the process to obtain one.
“It doesn’t dissuade the business because it’s such a small fine they make it up in one sale,” Paulin said.
She wants fines of $2,500 for the first offense and $5,000 for a second violation. A third offense could lead to the loss of the business.
“Will there be no black market? We can’t say that,” Paul said. “But will we minimize it to the point where most people have to go to legal shops to purchase it? I believe it will.”
Paulin’s bill proposed this month comes as New York cannabis regulators moved to allow licensed businesses to deliver cannabis.
The changes are being made as efforts by New York provide retail space to license holders — many of whom have prior convictions and were given priority status for licenses — have been slower than expected. Licensed business owners, meanwhile, are eager to open, said Ryan McCall, an attorney with the Capital Region-area law firm Tully Rinckey.
“They’re really just eager to get off the ground and I think the best way is allowing them to procure their own lease space and then they’re going to be able to schedule deliveries relatively soon,” McCall said.
But it will be a challenge for businesses to collect payments on deliveries. Cannabis remains a cash-only business.
“It’s going to be really tricky to see. I think the main piece really needs to come into how are they going to accept payment — whether it’s Visa or MasterCard being one of the two point of sale process system,” McCall said. “I think at some point you’re going to see one of these two players come into play.”