Bill Text: NY S00159 | 2023-2024 | General Assembly | Introduced

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Bill Title: Authorizes the commissioner of taxation and finance to revoke the certificate of registration of the sale of adult-use cannabis; increases certain penalties relating to the sale of illicit cannabis; authorizes the commissioner of taxation and finance and the duly authorized representatives of the office of cannabis management to provide enforcement; makes it a class A misdemeanor for a distributor of adult-use cannabis products or a retail seller of adult-use cannabis products to sell any such products while not registered to do so.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2024-01-03 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS [S00159 Detail]

Download: New_York-2023-S00159-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                           159

                               2023-2024 Regular Sessions

                    IN SENATE

                                       (Prefiled)

                                     January 4, 2023
                                       ___________

        Introduced  by Sens. KRUEGER, HOYLMAN -- read twice and ordered printed,
          and when printed to be committed to the  Committee  on  Investigations
          and Government Operations

        AN  ACT  to  amend  the tax law, in relation to making certain technical
          corrections to tax on adult-use cannabis pursuant to article  20-C  of
          such law; to amend the cannabis law, in relation to certain penalties;
          and  to  amend the penal law, in relation to clarifying the definition
          of selling cannabis

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. Subdivision (b) of section 494 of the tax law, as added by
     2  chapter 92 of the laws of 2021, is amended to read as follows:
     3    (b) [(1)] The commissioner shall refuse  to  issue  a  certificate  of
     4  registration to any applicant and shall revoke the certificate of regis-
     5  tration of any such person who does not possess a valid license from the
     6  office  of cannabis management. (1) The commissioner may refuse to issue
     7  a certificate of registration to any  applicant  where  such  applicant:
     8  (i)  has  a  past-due  liability  as that term is defined in section one
     9  hundred seventy-one-v of this chapter; (ii) has  had  a  certificate  of
    10  registration  under  this article, a license from the office of cannabis
    11  management, or any license or registration provided for in this  chapter
    12  revoked  or  suspended where such revocation or suspension was in effect
    13  on the date the application was filed or ended within one year from  the
    14  date  on which such application was filed; (iii) has been convicted of a
    15  crime provided for in this chapter within one  year  from  the  date  on
    16  which  such  application  was  filed  or  the certificate was issued, as
    17  applicable; (iv) willfully fails to file a report or return required  by
    18  this  article;  (v) willfully files, causes to be filed, gives or causes
    19  to be given a report, return, certificate or affidavit required by  this

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01101-01-3
        S. 159                              2

     1  article which is false; or (vi) willfully fails to collect or truthfully
     2  account for or pay over any tax imposed by this article.
     3    (2) The commissioner may revoke the certificate of registration issued
     4  to any person who:  (i) has had a certificate of registration under this
     5  article,  or  any  license  or registration provided for in this chapter
     6  revoked or suspended; (ii) has been convicted of a crime provided for in
     7  this chapter; (iii) willfully fails to file a report or return  required
     8  by  this  article;  (iv)  willfully  files, causes to be filed, gives or
     9  causes to be given a report, return, certificate or  affidavit  required
    10  by  this  article  which  is false; or (v) willfully fails to collect or
    11  truthfully account for or pay over any tax imposed by this article.
    12    (3) In addition to the grounds for revocation in [paragraph (1)] para-
    13  graphs one and two of this subdivision,  where  a  person  who  holds  a
    14  certificate  of  registration  is  determined  to have possessed or sold
    15  illicit cannabis: [(1)] (i) such registration may be revoked for a peri-
    16  od of up to one year for the first such possession or sale;  [(2)]  (ii)
    17  for  a  second  such possession or sale within a period of five years by
    18  such person, the registration of such person may be revoked for a period
    19  of up to three years; [(3)] (iii) for a third such  possession  or  sale
    20  within  a period of up to five years by such person, the registration of
    21  such person may be revoked for a period of five years. A certificate  of
    22  registration  may be revoked pursuant to this paragraph immediately upon
    23  such person's receipt of written notice of revocation from  the  commis-
    24  sioner.
    25    (4)  Where  a person who has been determined to have possessed or sold
    26  illicit cannabis does not possess a certificate  of  registration  under
    27  this  section,  the  commissioner  may revoke a certificate of authority
    28  issued to such person pursuant to section eleven hundred thirty-four  of
    29  this chapter. Such certificate may be revoked: (i) for a period of up to
    30  one  year  for the first such possession or sale; (ii) for a second such
    31  possession or sale within a period of five years  by  such  person,  the
    32  registration  of  such person may be revoked for a period of up to three
    33  years; (iii) for a third such possession or sale within a period  of  up
    34  to  five  years  by  such person, the registration of such person may be
    35  revoked for a period of five years.
    36    § 2. Section 496-c of the tax law, as added by chapter 92 of the  laws
    37  of 2021, is amended to read as follows:
    38    §  496-c. Illicit cannabis penalty. (a) In addition to any other civil
    39  or criminal penalties that may apply, any person knowingly in possession
    40  of or knowingly having control over  illicit  cannabis,  as  defined  in
    41  section  four  hundred  ninety-two  of this article, after notice and an
    42  opportunity for a hearing, shall be liable for a civil  penalty  of  not
    43  less than [two] four hundred dollars per ounce of illicit cannabis flow-
    44  er,  [five] ten dollars per milligram of the total weight of any illicit
    45  cannabis edible product, [fifty] one hundred dollars  per  gram  of  the
    46  total weight of any product containing illicit cannabis concentrate, and
    47  [five  hundred] one thousand dollars per illicit cannabis plant, but not
    48  to exceed [four] eight hundred dollars per  ounce  of  illicit  cannabis
    49  flower,  [ten]  twenty  dollars per milligram of the total weight of any
    50  illicit cannabis edible product, [one] two hundred dollars per  gram  of
    51  the total weight of any product containing illicit cannabis concentrate,
    52  and  [one]  two  thousand dollars per illicit cannabis plant for a first
    53  violation, and for a second and subsequent violation within three  years
    54  following  a  prior violation shall be liable for a civil penalty of not
    55  less than [four] eight hundred dollars per  ounce  of  illicit  cannabis
    56  flower,  [ten]  twenty  dollars per milligram of the total weight of any
        S. 159                              3

     1  illicit cannabis edible product, [one] two hundred dollars per  gram  of
     2  the total weight of any product containing illicit cannabis concentrate,
     3  and  [one]  two  thousand dollars per illicit cannabis plant, but not to
     4  exceed [five hundred] one thousand dollars per ounce of illicit cannabis
     5  flower,  [twenty] forty dollars per milligram of the total weight of any
     6  illicit cannabis edible product, [two] four hundred dollars per gram  of
     7  the total weight of any product containing illicit cannabis concentrate,
     8  and [two] four thousand dollars per illicit cannabis plant.
     9    (b)  No enforcement action taken under this section shall be construed
    10  to limit any other criminal or civil liability of anyone  in  possession
    11  of illicit cannabis.
    12    (c)  The  penalty  imposed  by this section shall not apply to persons
    13  lawfully in possession of less than two ounces of adult-use cannabis  or
    14  ten  grams  of concentrated cannabis in accordance with the cannabis law
    15  or penal law.
    16    (d) The commissioner or his or her duly authorized representatives, or
    17  the duly authorized representatives of the office  of  cannabis  manage-
    18  ment,  shall  seize  any illicit cannabis found on any person engaged in
    19  the cultivation, processing, distribution or sale of adult-use  cannabis
    20  products;  or  in  any  premises  or  vehicle  where  adult-use cannabis
    21  products are cultivated, processed, distributed, placed, stored, sold or
    22  offered for sale; or on any person in possession, control  or  occupancy
    23  of such premises or vehicle.
    24    §  3.  The tax law is amended by adding a new section 496-d to read as
    25  follows:
    26    § 496-d. Enforcement. For purposes of the efficient administration  of
    27  the  taxes  imposed by this article, it is the intent of the legislature
    28  that the cultivation, processing, distribution  and  sale  of  adult-use
    29  cannabis  products  be  deemed  a heavily regulated industry, subject to
    30  supervision by the commissioner and the office of  cannabis  management.
    31  The  commissioner or his or her duly authorized representatives, and the
    32  duly authorized representatives of the office of cannabis management are
    33  hereby authorized: (1) to conduct regulatory  inspections  in  the  same
    34  manner  as  a  regulatory  inspection pursuant to article twenty of this
    35  chapter of any person engaged in the cultivation,  processing,  distrib-
    36  ution  or  sale  of adult-use cannabis products, any premises or vehicle
    37  where adult-use cannabis is cultivated, processed, distributed,  placed,
    38  stored,  sold or offered for sale, and any person in possession, control
    39  or occupancy of such premises or vehicle;  (2)  to  examine  the  books,
    40  papers,  invoices  and other records of any person engaged in the culti-
    41  vation, processing, distribution or sale of adult-use cannabis products,
    42  any premises or vehicle where adult-use  cannabis  products  are  culti-
    43  vated,  processed, distributed, placed, stored, sold or offered for sale
    44  and any person in possession, control or occupancy of any premises where
    45  adult-use cannabis products are placed,  stored,  sold  or  offered  for
    46  sale.  Each  such  person is hereby directed and required upon demand to
    47  give to the commissioner or his or her duly authorized  representatives,
    48  or the duly authorized representatives of the office of cannabis manage-
    49  ment, the means, facilities and opportunity for such examinations.
    50    §  4. The tax law is amended by adding a new section 1814-b to read as
    51  follows:
    52    § 1814-b. Penalties. Any person required to be registered pursuant  to
    53  article  twenty-C of this chapter as a distributor of adult-use cannabis
    54  products, or as a retail seller  of  adult-use  cannabis  products,  who
    55  sells  adult-use  cannabis  products  while  not so registered, shall be
    56  guilty of a class A misdemeanor. Any person who violates  the  provision
        S. 159                              4

     1  of this section after having previously been convicted of a violation of
     2  this  section within the preceding five years shall be guilty of a class
     3  E felony. For purposes of this section, the  terms  "adult-use  cannabis
     4  product"  and  "sale"  shall  have  the  same  meaning as such terms are
     5  defined in article twenty-C of this chapter.
     6    § 5. Subdivision 1 of section 16 of the cannabis  law  is  amended  to
     7  read as follows:
     8    1.  Any  person  who  violates,  disobeys  or  disregards  any term or
     9  provision of this chapter or of any lawful notice, order  or  regulation
    10  pursuant  thereto for which a civil or criminal penalty is not otherwise
    11  expressly prescribed by law, shall be liable to the people of the  state
    12  for a civil penalty of [not to exceed five] up to fifty thousand dollars
    13  for every such violation.
    14    §  6.  Subdivision  3  of section 222.00 of the penal law, as added by
    15  chapter 92 of the laws of 2021, is amended to read as follows:
    16    3. For the purposes of this article, "sell" shall mean to sell, trans-
    17  fer title or possess or both, exchange or barter any  commodity,  object
    18  or  any  thing  of  any  type,  rent, lease or license to use or consume
    19  conditional or otherwise, in any manner or by any means whatsoever for a
    20  consideration or any agreement therefor, or dispose of for compensation,
    21  including through a membership program or through  some  other  indirect
    22  means.    "Sell"  shall  not include the transfer of cannabis or concen-
    23  trated cannabis between persons twenty-one years of age or older without
    24  compensation in the quantities authorized in paragraph (b)  of  subdivi-
    25  sion one of section 222.05 of this article.
    26    § 7. This act shall take effect immediately.