Local Law 107 was recently enacted to prohibit owners of commercial spaces from knowingly leasing to unlicensed sellers of marijuana or tobacco products, and imposing fines of up to $10,000 on landlords for violations. This new legislation is in response to the explosion of unlicensed smoke shops in NYC – currently there are an estimated 8,000 unlicensed smoke shops in NYC.
Under Local Law 107, state enforcement agencies, such as the Attorney General or the New York State Office of Cannabis Management ("OCM"),conduct inspections for unlicensed marijuana or tobacco sales. If they findsuch activity has occurred, they may provide written notice to the property owner, requiring they ensure such unlicensed activity is ceased, serving as the basis of violation. Any subsequent inspection that finds continued violation would make the landlord/property owner subject to a $5,000 civil penalty, and a $10,000 penalty for each subsequent violation. The commencement of an eviction proceeding is considered an affirmative defense for a landlord/property owner. The law also requires the submission of quarterly reports to the Mayor and the Council a quarterly report on enforcement relating to illicit cannabis or unlicensed tobacco product sellers.
By Rachel Sigmund McGinley, the Chair of Adam Leitman Bailey, P.C.'s Cooperative & Condominium Representation Group.
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