2023 New York Laws › CAN - Cannabis › Article 6 - General Provisions › 131 - Local Opt-Out; Municipal Control and Preemption.

§  131.  Local  opt-out;  municipal  control  and  preemption.  1. The
licensure and  establishment  of  a  retail  dispensary  license  and/or
on-site consumption license under the provisions of article four of this
chapter  authorizing  the  retail sale of adult-use cannabis to cannabis
consumers shall not be applicable to a  town,  city  or  village  which,
after the effective date of this chapter, and, on or before the later of
December  thirty-first, two thousand twenty-one or nine months after the
effective  date  of  this  section,  adopts  a  local  law,  subject  to
permissive  referendum  governed by section twenty-four of the municipal
home rule law, requesting the cannabis control  board  to  prohibit  the
establishment   of   such  retail  dispensary  licenses  and/or  on-site
consumption licenses contained in article four of this  chapter,  within
the  jurisdiction  of the town, city or village. Provided, however, that
any town law shall apply to the area of the town outside of any  village
within  such  town.    No  local  law  may be adopted after the later of
December thirty-first, two thousand twenty-one or nine months after  the
effective  date  of this section prohibiting the establishment of retail
dispensary  licenses  and/or  on-site  consumption  licenses;  provided,
however,  that  a  local  law  repealing such prohibition may be adopted
after such date.
2. Except as provided for in subdivision  one  of  this  section,  all
county,  town,  city  and  village governing bodies are hereby preempted
from adopting  any  law,  rule,  ordinance,  regulation  or  prohibition
pertaining  to  the  operation or licensure of registered organizations,
adult-use cannabis  licenses  or  cannabinoid  hemp  licenses.  However,
towns, cities and villages may pass local laws and regulations governing
the  time,  place  and  manner  of  the  operation of licensed adult-use
cannabis retail dispensaries and/or on-site consumption  site,  provided
such  law  or  regulation  does  not make the operation of such licensed
retail  dispensaries   or   on-site   consumption   sites   unreasonably
impracticable as determined by the board.
3.  (a)  As used in this subdivision and for purposes of any local law
adopted pursuant to it, the following terms  shall  have  the  following
meanings:  "person"  shall  have the meaning provided for in subdivision
forty-a of section three of this chapter;  "unlicensed  activity"  shall
refer  only  to  unlawfully  selling  cannabis, cannabis product, or any
product marketed or labeled as such without  obtaining  the  appropriate
registration,  license,  or  permit therefor, or engaging in an indirect
retail sale; "indirect retail sale" shall have the meaning provided  for
in subdivision forty-six-a of section three of this chapter, except that
it shall not include cannabinoid hemp or hemp extract product; "place of
business"  shall  not  include  a  residence  or other real property not
otherwise held out as open to the public or otherwise being utilized  in
a  business  or  commercial  manner,  or any vehicle associated with the
business, unless probable cause exists to believe that  such  residence,
real  property, or vehicle, is being used in such business or commercial
manner for the unlicensed activity.
(b) Any county or city may adopt a local law authorizing an officer or
agency to conduct  regulatory  inspections  of  any  place  of  business
located  within  the  county  or city, including a vehicle used for such
business, not listed on the directory maintained by the office  pursuant
to  subdivision  thirteen  of  section  eleven of this chapter. Any such
regulatory inspection shall only occur during the operating hours  of  a
place  of business and be conducted for purposes of civil administrative
enforcement with respect to premises lacking  applicable  registrations,
licenses  or permits issued pursuant to this chapter, and in furtherance
of  its  purposes,  provided  that  nothing  herein  shall   limit   any

enforcement action under law when illegal activity is observed or occurs
during such inspection.
(c) A local law adopted by a county authorizing regulatory inspections
shall  not  apply  in  any  city  included within the boundaries of such
county that adopts a local law authorizing regulatory inspections within
such city.
(d) The local law adopted by a county  or  a  city  pursuant  to  this
subdivision shall also:
(i)  require  procedures  sufficient  to  ensure  that  any regulatory
inspections are conducted in a reasonable manner, are administrative  in
nature,  designed to detect administrative violations, in furtherance of
the regulatory scheme established pursuant to this section, and designed
to guarantee certainty and regularity of application;
(ii) designate a local official who shall serve as the liaison to  the
office  and  who  shall:  (1)  be required to ensure that updates to the
directory  are  immediately  incorporated  into  the  local   inspection
process,   coordinate  with  the  office  on  efforts  to  inspect  such
unlicensed businesses and related local enforcement  efforts;  (2)  send
bi-weekly reports to the office in a manner and format prescribed by the
office  detailing  recent  enforcement  efforts,  including  information
regarding the number and location of inspections conducted,  notices  of
violation issued, and orders to seal issued and executed, and the amount
and  nature  of the cannabis, cannabis products, or products marketed as
such seized; and (3) serve as the primary  contact  for  the  office  in
connection  with  the  office's  training  program  and  the  sharing of
materials made available to counties  and  cities  with  regard  to  the
inspection and enforcement of unlicensed cannabis businesses;
(iii)  be  filed  with  the  office,  as  well  as  any  procedures or
regulations promulgated pursuant to the local law.  Notwithstanding  the
effective  date  of  any  such local law, the local law shall not become
effective until ten days after it is filed with the office;
(iv) establish a system for receiving complaints  of  such  unlicensed
activity by any business within the county or city, as the case may be;
(v)  provide  that  any  person  who  engages  in the unlawful sale of
cannabis, cannabis product, or any product marketed or labeled as  such,
or  in indirect retail sales, shall be subject to a civil penalty of not
less than one hundred dollars and not more than ten thousand dollars for
each day during which such violation continues, with a  maximum  penalty
of  no  more than twenty-five thousand dollars. The penalty provided for
in this subparagraph may be recovered by an action or  proceeding  in  a
court of competent jurisdiction brought by the county or city to enforce
the  notice  of violation referred to in clause one of subparagraph (vi)
of this paragraph; and
(vi)  provide  that  the  officer  or  agency  designated  to  conduct
regulatory  inspections  of  any  place  of  business  not listed on the
directory maintained by the office shall have the authority to:
(1) issue a notice of violation and order to cease unlicensed activity
setting forth the nature of the unlawful conduct along with any fines or
penalties for such conduct in amounts not to exceed the fines set  forth
in  subparagraph  (v)  of  this  paragraph  and  order any person who is
unlawfully selling cannabis, cannabis product, or any  product  marketed
or  labeled  as  such  without  obtaining  the appropriate registration,
license, or permit therefor, or engaging in  indirect  retail  sale,  to
cease  such  prohibited  conduct,  provided  that  any  such  notice  of
violation and order to cease unlicensed  activity  may  only  be  issued
against  the  business  that is conducting the unlicensed activity or an
individual owner of the business. Any notice of violation and  order  to
cease  unlicensed  activity  shall be served by delivery of the order to

the owner of the business or other person of suitable age or  discretion
in  actual  or  apparent  control  of  the  premises  at the time of the
inspection and shall be posted at the building  or  premises  that  have
been  sealed,  secured  and  closed.  A  copy of the order shall also be
mailed to any address for the owner  of  the  business  at  any  address
provided by the person to whom such order was delivered pursuant to this
paragraph;
(2)  seize  any cannabis, cannabis product, or any product marketed or
labeled as such, found in the possession of  a  person  engaged  in  the
conduct  described in clause one of this subparagraph and in their place
of business, including a vehicle used for such business, providing  that
the business that is conducting the unlicensed activity or an individual
owner of the business, maintain documentation of the chain of custody of
such seized products, and ensure that such products are properly stored,
catalogued,  and  safeguarded  until  such  time as they may properly be
destroyed by the county or the city;
(3) issue an order to seal the building or premises  of  any  business
engaged  in  unlicensed  activity,  when  such  activity  is  conducted,
maintained, or permitted in such building or  premises,  occupied  as  a
place  of  business subject to the procedures and requirements set forth
in this subparagraph:
A. The officer or agency may issue an order to seal with an  immediate
effective  date  if such order is based upon a finding by the officer or
agency of an imminent threat to the public health, safety, and welfare.
B. Any order to seal shall be served by delivery of the order  to  the
owner  of  the business or other person of suitable age or discretion in
actual or apparent control of the premises at the time of the inspection
and shall be posted at the building or premises that have  been  sealed,
secured  and  closed.  A  copy  of the order shall also be mailed to any
address for the owner of the business provided by  the  person  to  whom
such  order  was  delivered  pursuant to this paragraph. The order shall
remain in effect pending a hearing and final determination of  a  court,
or  until such order is vacated by the officer or agency pursuant to the
local law adopted pursuant to this subdivision. An order to  seal  shall
explicitly  state  that  a  request  for  a  hearing may be submitted in
writing to  the  corporation  counsel  or  to  the  county  attorney  as
applicable  within  seven  days.  Upon  receiving  such  a request for a
hearing, the corporation counsel or county attorney shall file a copy of
the request with the clerk of the city court or county court in the city
or county where the building or premises is located.
C. The court that receives notice of a request for a  hearing  from  a
corporation  counsel  or  a  county  attorney shall fix the date of such
hearing no later than three business days from the date such  notice  is
received  by  the  court  and provide notice to the parties of the date,
time, and location of the hearing. Upon such date, or  upon  such  other
date  to  which  the  proceeding  may  be  adjourned by agreement of the
parties, the court shall hear testimony and receive  evidence  presented
by  the  parties. The city or county, as applicable, and the person that
requested the hearing shall be parties to the  proceeding.  Within  four
business  days  of the conclusion of the hearing, the court shall make a
determination as to: (i) whether the person upon which the order to seal
was issued was engaged in unlicensed activity, (ii)  if  the  person  is
found  to  have  engaged  in  unlicensed  activity,  then  whether  such
unlicensed activity presents an imminent threat to public health, safety
and welfare  according  to  subdivision  four  of  section  one  hundred
thirty-eight-b  of  this  article,  and  (iii)  whether  the  unlicensed
activity as described in this section is more than a de minimis part  of
the  business  activity  on the premises or in the building to be sealed

pursuant to the order. However, when an order to seal  has  been  issued
upon  a  second or subsequent inspection in which unlicensed activity is
confirmed to be continuing more than ten calendar days after a notice of
violation  and order to cease unlicensed activity was previously issued,
the court need only determine: (i) whether the  person  upon  which  the
order  to  seal  was  issued  was  engaged  in unlicensed activity; (ii)
whether a notice of violation and order to cease unlicensed activity had
been issued eleven or more days prior to the issuance of  the  order  to
seal;  and (iii) whether the order to seal was issued in compliance with
paragraph (a) of subdivision six of section one  hundred  thirty-eight-b
of  this  article. If the court determines that an order to seal was not
properly issued, the court shall vacate such  order.  If  the  court  is
satisfied  that  an  order  to  seal  was properly issued, the court may
render a judgment affirming the issuance of an order to seal, and direct
the closing of the building or premises by any police officer  or  peace
officer   with  jurisdiction  to  the  extent  necessary  to  abate  the
unlicensed activity and shall direct any police officer or peace officer
with jurisdiction to post a copy of the judgment and a printed notice of
such closing conforming to the requirements of this chapter. The closing
directed by the judgment shall be for  such  period  as  the  court  may
direct  but  in  no event shall the closing be for a period of more than
one year from the posting of the judgment provided for in this  section.
Failure  of  a  party  that requested a hearing to appear at the hearing
will result in a default and order of sealing to remain  in  effect  for
such  period  as the court may direct but in no event shall the order be
in effect for a period of more than one year from  the  posting  of  the
judgment  unless  otherwise  vacated  pursuant  to the local law adopted
pursuant to this subdivision.
D. The local law adopted pursuant to this subdivision  shall  include,
without alteration the provisions of subdivisions four through twelve of
section  one  hundred  thirty-eight-b  of  this  article. Any provisions
adopted by a local law to the contrary shall be considered  specifically
preempted  by  this  paragraph,  provided  however that a county or city
shall be permitted to substitute the officer or agency authorized by the
county or city  to  conduct  regulatory  inspections  pursuant  to  this
subsection for any reference to the office or board;
(4)  seek  injunctive relief against any person engaging in conduct in
violation of this section,  including  through  an  action  pursuant  to
section sixteen-a of this chapter.
(e)  Upon  a  demand  by the county or city, a respondent or defendant
shall provide to the county or city  prior  to  a  hearing  pursuant  to
subparagraph  (v)  of  paragraph  (d) of this subdivision or an order to
seal pursuant to clause three of subparagraph (vi) of paragraph  (d)  of
this subdivision, within five days after a demand or sooner if a hearing
is  scheduled  less  than  five days from the date of demand, a verified
statement setting forth:
(i) If the responding party is a natural  person,  such  party's:  (1)
full  legal name; (2) date of birth; (3) current home or business street
address; and (4) a unique identifying  number  from:  (A)  an  unexpired
passport;  (B)  an unexpired state driver's license; or (C) an unexpired
identification card or document issued by a state  or  local  government
agency  or  tribal  authority  for the purpose of identification of that
individual;
(ii) If the responding  party  is  a  partnership,  limited  liability
partnership,   limited   liability   company,  or  other  unincorporated
association,  including  a  for  profit  or  not-for-profit   membership
organization  or club, the information required pursuant to subparagraph

(i) of this paragraph for all of its partners or members, as well as the
state or other jurisdiction of its formation;
(iii)  If  the  responding  party is a corporation, its state or other
jurisdiction of incorporation, principal  place  of  business,  and  any
state or other jurisdiction of which that party is a citizen;
(iv)  If the responding party is not an individual, in addition to any
information provided pursuant to subparagraphs (ii) and  (iii)  of  this
paragraph,  and  to  the extent not previously provided, each beneficial
owner of the responding party by: (A)  full  legal  name;  (B)  date  of
birth;  (C)  current  home  or business street address; and (D) a unique
identifying number from: (1) an unexpired  passport;  (2)  an  unexpired
state  driver's  license;  or  (3)  an  unexpired identification card or
document issued  by  a  state  or  local  government  agency  or  tribal
authority  for the purpose of identification of that individual. As used
in this section, the term "beneficial owner" shall have the same meaning
as defined in 31 U.S.C. § 5336(a)(3), as amended,  and  any  regulations
promulgated thereunder.
(f)  Notwithstanding  any provision to the contrary in this section, a
city with a  population  of  more  than  one  million  may  enforce  any
violations,  orders  to  cease, and orders to seal related to unlicensed
activity through an administrative hearing process.