At Empire Cannabis Clubs in Chelsea, an unlicensed cannabis dispensary, law enforcement agents on Wednesday made their way inside the store, seized product and handcuffed one of its owners.
During a simultaneous raid at the store’s Lower East Side location, co-founder Lenore Elfand was arrested after denying entry to agents from the state Department of Taxation and Finance.
What You Need To Know
- Last month, Gov. Kathy Hochul announced a stepped-up enforcement campaign against unlicensed cannabis sellers, highlighting tough new state laws
- Of the 22 stores in the city initially targeted with violations, only six remain closed; most continue to openly sell cannabis
- Empire Cannabis Clubs in Chelsea was raided by state Department of Taxation and Finance agents Wednesday, but immediately reopened
- State officials say unlicensed sellers face fines of $10,000 a day, going up to $20,000 a day for repeat violators, but businesses first get an administrative hearing
Elfand said she spent five hours being processed at a local police precinct. But the business hardly missed a beat.
“Oh, we reopened right when they walked out,” Elfand said of the Chelsea location.
A similar pattern has played out at other unlicensed stores, where state officials have conducted raids in recent weeks only to see stores quickly re-open and continue to flout the law.
Last month, Gov. Kathy Hochul announced a new crackdown made possible by new, tougher laws passed as part of the state budget.
“I want to send a message loud and clear across this state that if you’re operating illegally, you will be caught, and you will be stopped,” she said at an announcement in June.
During an initial enforcement blitz, Hochul said agents seized more than 1,000 pounds of cannabis products worth almost $11 million, and issued notices of violation to 31 stores across the state.
But of the 22 stores that were issued violations in the city, only six have closed down. Most reopened for business and continue to openly sell cannabis in violation of the law.
Empire Cannabis Clubs has long maintained its stores are legal because they operate as a membership club. Its owners are considering legal action.
“They were attempting to come in to seize product, saying that we weren’t paying taxes,” Elfand said. “We are, in fact, paying taxes, and we have paid somewhere just shy of $3 million in tax collected and accepted by the state of New York.”
Not only is Empire Cannabis Clubs undeterred by the latest crackdown, but the company is also in the process of expanding from five locations to seven.
The state says unlicensed sellers face fines of $10,000 a day, going as high as $20,000 a day for repeat violators, who could be shut down altogether.
But businesses that have been issued a violation get an administrative hearing, where initial fines and penalties are determined.
In the meantime, at most shops, it’s business as usual — state law be damned.