The New York Assembly has passed legislation designed to prevent illicit marijuana from entering the state’s regulated cannabis market, sending the measure to the Senate.
Assembly Bill 10698-B, filed by Assemblymember Landon Dais (D), was passed by the full Assembly on June 1 after advancing through the Assembly Ways and Means Committee and the Assembly Rules Committee. The measure has been referred to the Senate Rules Committee.
The legislation is titled the “Cannabis Supply Chain Integrity and Anti-Inversion Act.” It would amend state cannabis law to define “cannabis inversion” as any act or omission involving illicit marijuana, including marijuana or marijuana products brought into the regulated supply chain without required taxes being paid, products sourced from unlicensed or unauthorized entities, or products imported into New York in violation of state law.
The bill makes clear that the term would not apply to marijuana that is lawfully possessed under state cannabis law or penal law.
Under the proposal, a person who commits cannabis inversion would face a civil penalty of up to $10,000 for each day the violation continues. They could also face an additional penalty equal to the greater of three times the revenue from the illicit marijuana or three times the fair market value of the marijuana involved.
The measure would also allow illicit marijuana or marijuana products tied to cannabis inversion to be seized, forfeited and destroyed.
Assembly Bill 10698-B would also expand the state’s authority to seek suspension orders against licensed or authorized cannabis businesses when alleged violations pose a “direct and immediate threat” to public health, safety or welfare. However, the bill includes limits on how long certain suspension-pending-investigation orders may remain in place.
A registrant, licensee, permittee or laboratory testing facility subject to a suspension order could request a hearing within seven business days, and the Office of Cannabis Management would be required to hold that hearing within five business days.
The bill also states that the Cannabis Control Board would be prohibited from extending certain suspension-pending-investigation orders beyond 30 days, and barred from issuing subsequent suspension orders based on the same facts used in a prior order.
The proposal is cosponsored by numerous Democrats, including Assemblymembers Crystal Peoples-Stokes, Donna Lupardo, John Zaccaro, Albert Stirpe, Amanda Septimo, Harry Bronson, Gabriella Romero, Linda Rosenthal and others.
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