The New York Supreme Court has ruled that state cannabis regulators have the authority to search and seize marijuana from unlicensed dispensaries, rejecting arguments that such enforcement actions violate the U.S. Constitution.
The decision strengthens the Office of Cannabis Management’s (OCM) efforts to crack down on illegal marijuana operations through its ongoing inspections program. These inspections often involve undercover purchases, seizures of unlicensed products, and joint operations with local law enforcement.
Felicia Reid, acting executive director of OCM, called the ruling “a powerful affirmation of the work of OCM’s efforts across the State in tackling the illicit market,” adding that enforcement helps protect public safety and supports legal marijuana businesses.
The case was brought by the Elfand Organization, which operates Empire Cannabis Clubs—six unlicensed membership-based cannabis storefronts in New York City. While the clubs didn’t directly sell marijuana, they charged a membership fee and allowed members to access cannabis at cost. The organization argued this model didn’t qualify as a traditional sale, claiming the businesses operated legally under the state’s marijuana law.
Empire Cannabis Clubs opened in 2021, after New York legalized recreational marijuana but before the first licensed dispensaries began operations. At the time, numerous businesses tried to exploit perceived legal gray areas, offering cannabis as a gift with the purchase of merchandise or via exclusive club memberships.
In 2023, OCM targeted the Empire Cannabis Clubs in a series of inspections that led to five store raids, the arrest of eight employees, and the seizure of cannabis and $1,653 in cash. The operators sued, calling the enforcement actions unconstitutional warrantless searches and violations of their Fourth Amendment rights.
“These raids caused near-total destruction of an otherwise law-abiding business,” the group argued in court filings.
Judge Inga O’Neale disagreed, ruling that the OCM acted within its legal authority as a regulatory agency and that the inspections were constitutional under the state’s marijuana laws.
The Elfand decision isn’t the only legal challenge to OCM’s enforcement strategy. A separate lawsuit filed by Super Smoke-n-Save in Albany alleges the agency is unfairly targeting businesses that sell legal hemp products. That case remains pending.
