James, Hochul shut down unlicensed ganja stores

New York Attorney General Letitia James, Gov. Kathy Hochul, and the Office of Cannabis Management (OCM) on Monday shut down seven unlicensed cannabis dispensaries in Cayuga, Oswego, and Wayne counties that were also illegally selling cannabis to underage customers, utilizing new enforcement powers granted to the Attorney General by legislation signed into law by the Governor as part of the FY24 Enacted Budget.

The unlicensed dispensary chain, “I’m Stuck,” has eight locations across Cayuga, Monroe, Oswego, and Wayne counties and is selling cannabis without the proper authorization from OCM.

In addition to making illicit retail sales, the attorney general said “I’m Stuck” processed and packaged cannabis products without a license, creating significant health risk to consumers.

James said the chain’s owner, David Tulley, ignored repeated notices and OCM orders to stop selling cannabis without a license at his “I’m Stuck” stores, and investigators from the Office of the Attorney General (OAG) also observed store clerks selling cannabis products to underage customers on multiple occasions.

In addition to shutting down Tulley’s stores, Attorney General James and OCM seek penalties from Tulley, his companies, and the building owners where his stores are located for allowing an unlawful business to operate on their properties. Tulley could be fined millions of dollars in penalties as a result of today’s action.

“Legalizing cannabis in New York was a historic milestone to correct the harms of the past, but there are laws that must be followed to ensure cannabis products are safe and kept out of the hands of minors,” said Attorney General James. “David Tulley brazenly violated our laws, cheated taxpayers, and endangered our kids by selling unregulated cannabis to underage customers.

“Today’s enforcement action should send a clear message that businesses that are selling cannabis without a license will be stopped,” she added. “I thank Gov. Hochul and her administration for their partnership on this effort to protect New Yorkers.”

“As we work to build and expand the legal cannabis market, it’s critical to crack down on illegal operators who are breaking the law and undermining the success of entrepreneurs and consumers who follow the rules,” said Gov. Hochul. “This year I fought to enact new legislation that protects New Yorkers by granting new power to state agencies and our Attorney General to take new enforcement actions against bad actors. New York will continue to fight for an equitable cannabis industry that rights the wrongs of the past while protecting the health and safety of all New Yorkers.”

“Selling cannabis without a license remains illegal in the state of New York. We have repeatedly warned operators who are violating the state’s cannabis laws that they would be held accountable for shortchanging communities who are counting on revenue from adult-use sales and endangering the public health of cannabis consumers with poorly processed cannabis products,” said Chris Alexander, executive director, New York State’s Office of Cannabis Management. “When visiting legal cannabis businesses in New York, you can purchase products you trust that were safely processed from seed to sale. When you buy products from unlicensed operators, you are putting your health at risk. I thank the Governor and Attorney General for their commitment to shutting down the unregulated cannabis market.”

“Untaxed cannabis sales deprive the state of revenues meant for community investment and significantly undercut licensed facilities,” said New York State Department of Taxation and Finance Acting Commissioner Amanda Hiller. “Working with OCM and our partners in law enforcement, we will continue to aggressively enforce the law.”

“Illicit retail sales of any kind will not be tolerated in New York state. Efforts to intercept illegal business practices are an integral part of protecting our communities and send a clear message to business owners that there will be consequences,” said New York State Police Acting Superintendent Steven A. Nigrelli. “I want to thank our law enforcement partners for their diligence in halting illicit operations by unlicensed cannabis dispensaries and stopping the distribution of their products. The New York State Police stands ready to assist in holding owners accountable.”

New York’s Cannabis Law requires any person who cultivates, processes, or sells any cannabis product to be registered and licensed by the New York State Cannabis Control Board (Cannabis Board). Cannabis products sold by unlicensed businesses are not lab tested by OCM facilities, can be unsafe, and are not taxed.

Hochul signed legislation earlier this year that authorizes OAG, upon request by OCM, to bring a proceeding against any person who violates the Cannabis Law.

David Tulley owns and operates eight retail cannabis stores in Cayuga, Monroe, Oswego, and Wayne counties and has been selling cannabis without a license since at least early 2022, before OCM began issuing licenses.

Tulley’s stores that were shut down on Monday are in Auburn, Lyons, Macedon, Ontario, Pulaski, and Williamson, and were shut down with the assistance and support of the New York State Police.

In February 2022, OCM sent a cease and desist letter to Tulley to stop operating without a license, but Tulley continued to operate his cannabis stores. The OCM also issued notices of violations to Tulley’s stores.

In emails to OCM, James said Tulley misleadingly described his stores as a “consulting” business that informs customers about the effects of cannabis, and in return, customers receive free cannabis products.

However, undercover OAG investigators visited six “I’m Stuck” locations owned by Tulley and were able to purchase $1,000 worth of cannabis products.

During the undercover operations, OAG investigators observed that multiple “I’m Stuck” stores made sales to individuals under the age of 21.

In April 2023, Tulley’s stores advertised an Easter egg hunt in Cayuga, Monroe, Wayne, Onondaga, and Yates counties, where Easter eggs were scattered around public places and could be redeemed for prizes, including cannabis products and children’s toys.

A Facebook page offered hints that the Easter eggs can be found in various places, including playgrounds, trails, and churches.

An OAG investigator collected numerous Easter eggs and redeemed cannabis flower, edibles, cannabis seeds, and other products at the “I’m Stuck” store in Macedon, New York.

In May 2023, an undercover OAG investigator was accompanied by an underage undercover at the “I’m Stuck” store in Auburn, New York.

Despite not showing an ID, the store clerk showed the underage undercover various cannabis options. The clerk sold the products to the undercover investigator and handed them to the underage undercover at checkout.

At the “I’m Stuck” location in Ontario, an undercover OAG investigator was able to purchase $200 worth of cannabis products for an underage undercover. New York Cannabis Law prohibits access to cannabis for anyone under the age of 21.

In late June and early July 2023, inspections conducted by OCM seized more than 47 pounds of cannabis flower, 244 pounds of cannabis edibles, and 89 pounds of cannabis concentrate. Following issuance of an order to cease unlicensed activity at seven of these locations, David Tulley declared that he would defy OCM’s orders and remain open for business.

After verifying continued unlawful activity, OCM requested assistance from the Attorney General to file this action to permanently close the location.

On a number of occasions, James said undercover OAG investigators asked store clerks if taxes were included in the price of the products they were purchasing and each time clerks informed them that taxes were not included.

This petition seeks to immediately shut down Tulley’s stores and stop his companies from distributing, delivering, and dispensing cannabis products in New York. In addition, the petition seeks to require Tulley and his companies to pay penalties for violating New York’s Cannabis Law.

The Cannabis Law imposes a $10,000 penalty for each day in which an individual sells cannabis without a license, and a $20,000 penalty for each day an individual continues to sell cannabis after receiving an order to cease operating from OCM.

In addition, the petition seeks civil penalties from seven building owners where Tulley’s stores are located for permitting an unlawful business to operate within their properties. Under the Cannabis Law, building owners can be fined a penalty of $10,000 per day for allowing the unlicensed sale of cannabis at their property.