N.Y. Comp. Codes R. & Regs. tit. 9 § 133.23

Current through Register Vol. 46, No. 25, June 18, 2024

Section 133.23 - [Effective until 4/2/2024] Actions Relating to Unlicensed Activities

(a) The office may issue a notice of violation and order to cease unlicensed activity to any person, as defined in subdivision 40-a of section 3 of the Cannabis Law, who is cultivating, processing, distributing or selling cannabis, cannabis product, cannabinoid hemp or hemp extract product, or any product marketed or labeled as such in this state, or engaging in an indirect retail sale, without obtaining the appropriate registration, license, or permit therefor.

(b) In the event that the office issues a notice of violation and order to cease unlicensed activity to a person:

(1) that person must cease all cannabis or cannabinoid hemp related activity as described in subdivision (a) of this section;

(2) t he office may seize any cannabis, cannabis product, cannabinoid hemp or hemp extract product, or any product marketed or labeled as such, found in the possession of a person engaged in the conduct described in subdivision (a) of this section;

(3) the office may require that any books and records of all transactions involving the sale cannabis product and security, tracking, record keeping, record retention and surveillance systems, relating to all cannabis at every stage of acquiring, possession, manufacture, sale, delivery, transporting, testing or distributing, be turned over to them for inspection, examination, or audit.

(4) the office may affix a copy of such notice of violation and order to cease unlicensed activity on the front window, door, or exterior wall of the location where such activity is taking place. The notice and order shall be within five feet of the front door or other opening to such location where customers enter from the street, at a vertical height no less than four feet and no more than six feet from the ground or floor. When an establishment does not have a direct entrance from the street, the person shall permit the office to post such notice of violation and order to cease unlicensed activity at its immediate point of entry in a place where potential customers or members of the public are likely to see it;

(5) such notice of violation and order to cease unlicensed activity shall not be removed, altered, covered, or defaced in any way except when authorized by the office. Any removal of such notice of violation and order to cease unlicensed activity shall constitute a violation of these regulations and shall be punishable by a fine of up to $5,000 in accordance with subdivision 1 of section 16 of the Cannabis Law;

(6) the person served with such notice of violation and order to cease unlicensed activity shall also permit the office to affix one or more warning notice at or near the front door or other opening to such location where customers enter from the street advising the public that the business is ordered to stop the unlawful activity and of the public health and safety concerns relating to illicit cannabis;

(7) such warning notice shall not be removed altered, covered, or, defaced in any way except when authorized by the office. Any removal of the warning notice constitutes a violation of these regulations and shall be punishable by a fine of up to $5,000 in accordance with subdivision 1 of section 16 of the Cannabis Law.

(c) Having been served with the above-mentioned notice of violation, order to cease and warning notice pursuant to Cannabis Law section 138-a, any person, as defined in section 3, subdivision 40-a of the Cannabis Law, who is cultivating, processing, distributing, or selling cannabis, cannabis product, cannabinoid hemp or hemp extract product, or any product marketed or labeled as such in this State, or engaging in an indirect retail sale, without obtaining the appropriate registration, license, or permit must submit a verified affidavit of compliance attesting that the person has ceased the activity constituting the violation and, if applicable, complied with the office's order to cease within seven business days of service of a blank verified affidavit of compliance on such person.

(d) Such verified affidavit of compliance shall be completed by the business owner, signed under penalty of perjury, and mailed to the office via certified mail to the mailing address referenced on the notice of violation within seven business days of service of the blank verified affidavit of compliance upon such person.

(e) Failure to submit the verified affidavit of compliance within the timeframe required by subdivision (d) of this section will result in the rebuttable presumption of continued unlicensed business activity and subsequently subject said place of business and/or the owner/principal of the business to ongoing daily penalties of $20,000 per day pursuant to section 132 of the Cannabis Law for each day after the date of the notice of violation and order to cease unlicensed activity until such verified affidavit of compliance is submitted to the office. If a verified affidavit of compliance is submitted and thereafter the business and/or the owner/principal of the business is in violation of any section of the Cannabis Law sections 101, 125, or 132, a rebuttable presumption of continued unlicensed business activity will have been established and said place of business and/or the owner/principal of the business will be subject to ongoing daily penalties of up to $20,000 per day pursuant to section 132 of the Cannabis Law for each day after the date of the notice of violation and order to cease unlicensed activity.

(f) The office may initiate an administrative proceeding to enforce the order to cease the unlicensed activity and order the financial penalty that the office assessed for the violation. The proceeding will be subject to Articles 3 and 4 of the State Administrative Procedure Act and sections 133.8(a) and (b), 133.9, 133.10(a) and (c), 133.11, 133.12, 133.13, 133.14, 133.15, and 133.16, 133.19(b) of this Part. Any references to 'licensee' in such sections shall be read to apply to persons subject to enforcement pursuant to this section.

(1) Notwithstanding subdivision (c) of section 133.8 of this Part and pursuant to subdivision 3 of section 17 of the Cannabis Law, the notice of hearing may provide for a hearing date on less than fifteen days' notice.

(2) The office may issue subpoenas pursuant to the CPLR.

(3) The parties may enter a stipulation for the resolution of any and all issues at any time prior to issuance of a decision by the assigned administrative law judge. The office may issue a consent order upon agreement or stipulation of the parties. A consent order shall have the same force and effect as an order issued after a hearing.

(4) After the hearing, the administrative law judge shall issue a decision based on the administrative law judge's findings of fact and conclusions of law. Such decision shall be final and binding when issued.

(5) Any of the parties may appeal the administrative law judge decision within 30 calendar days of receipt. Such an appeal shall be made by filing with the board, and serving on the other party or parties, a written memorandum stating the appellant's arguments and setting forth specifically the questions of procedure, fact, law or policy to which exceptions are taken, identifying that part of the administrative law judge's decision and order to which objection is made, specifically designating the portions of the record relied upon, and stating the grounds for exceptions. A party upon whom an adverse party has served an appeal may file and serve a memorandum in opposition and cross-appeal within 30 calendar days after such service. A response to a cross-appeal may be filed and served within 15 calendar days after service of the cross-appeal. The failure of any party to respond shall not be deemed a waiver or admission. The record on appeal shall consist of the evidentiary exhibits from and transcript of the hearing, and the memorandums of appeal, opposition, and cross-appeal. The board or the board's designee may, in their discretion, stay the effective date of the decision, and shall, based solely on the record on appeal, either confirm the decision in writing, make a written, superseding decision including a statement as to why they have not confirmed the administrative law judge's decision, or remand the matter to the administrative judge for additional proceedings.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 133.23

Adopted New York State Register June 21, 2023/Volume XLV, Issue 25, eff. 6/6/2023 (Emergency)

Amended New York State Register August 16, 2023/Volume XLV, Issue 33, eff. 8/4/2023, exp. 12/4/2023 (Emergency)

Adopted New York State Register December 20, 2023/Volume XLV, Issue 51, eff. 12/4/2023, exp. 4/2/2024 (Emergency)