New York Governor Pushes Big Tech To ‘Step Up’ By Removing Illicit Marijuana Shop Listings

New York’s governor is calling on big tech companies such as Google and Meta to “do the right thing” by taking steps to stop promoting illicit marijuana shops that have proliferated across the state.

During a press briefing on Wednesday, Gov. Kathy Hochul (D) said that social media and search engine companies are passively undermining the legal market that’s being implemented by allowing unlicensed retailers to be featured on their services, giving consumers the false impression that they are legitimate businesses.

‘They’re hurting our legal shops, and we’ve been in touch with these companies, these platforms, and we’ve told them flat out, ‘You need to change this,’” she said.

Hochul added that she doesn’t expect the tech companies to proactively identify and remove illicit shop listings on their own because “they would tell us that they’re not required to.” To that end, she said her message to the businesses is, “let us help you.”

“Let us give you the list of legal vendors. I know who’s legal. We all know who’s legal. And then you have a responsibility to make sure that you’re not posting the locations of illegal shops,” the governor said. “Now I’m calling on all these platforms to step up, do the right thing and be part of the solution. Don’t be complicit in helping jeopardize the public health and the livelihoods of these legitimate business owners.”

At Wednesday’s briefing, Hochul was joined by cannabis stakeholders and advocates, including representatives of organizations that published an open letter to the governor on Tuesday that raised the alarm about social media companies promoting unlicensed retailers.

I’m with legal cannabis retailers to update New Yorkers on steps we’re taking to shut down illicit storefronts that threaten health and safety, and undermine our work to create an equitable, legal industry.

Join me live in Manhattan: https://t.co/VHXMGcXOnU

— Governor Kathy Hochul (@GovKathyHochul) February 28, 2024

“It all comes down to a simple question: What kind of cannabis marketplace do we want to have in the state of New York?” Hochul said. “I think we know the answer. We know which path we want.”

She also renewed her call for the legislature to give state and local officials the “power to padlock the doors of every illicit cannabis shop in the state of New York.”

“That’s how we take back our streets. That’s how we build the most equitable cannabis industry in the country. And that’s how we invest in the communities it was intended to help,” she said.

The governor started her speech by acknowledging that the state’s marijuana legalization rollout has been a “long journey” with “growing pains along the way,” referencing the protracted process of licensing legal storefronts that was complicated by litigation that blocked regulators for months at a time.

“Now with all the legal battles finally behind us as recently as December and hopefully no more, the momentum is finally picking up,” Hochul said. “Fifty licensed dispensaries have been opened since the injunction was lifted in December. It will be up to 80 by Friday.”

Regardless, she said “it’s just taking, in my opinion, too long,” echoing comments she made on several occasions over recent weeks where she’s expressed frustration with the rollout delays.

While litigation has contributed to those delays, Hochul has also signaled that she holds the state’s regulatory bodies partly responsible.

For example, when her office became aware that the Cannabis Control Board (CCB) only intended to approve three additional licenses at a meeting last month, they intervened and made clear that the number was insufficient. That meeting was subsequently cancelled.

The governor went so far as to say earlier this month that she was eyeing potential leadership changes within the state’s marijuana regulatory apparatus because of the implementation issues.

Regulators have since met for a rescheduled meeting this month, where they approved draft rules to allow for the home cultivation of recreational marijuana and signed off on more than 100 new cannabis business licenses that they hope will help the legal market overcome its “rocky start” this year.

Meanwhile, the governor released a budget plan last month that calls for the elimination of a THC potency tax, aiming to reduce costs for consumers in a way that could make the regulated market more competitive against illicit operators.

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Also, as New York works to expand the state’s marijuana market, a bill filed in the Assembly last month would empower individual municipal governments to shut down unlicensed cannabis businesses and seize their products, as the governor has pushed for.

Separately, the state’s Department of Labor in December published dozens of sample job descriptions for positions in the legal industry, which officials said are intended to help companies streamline hiring processes and allow prospective employees to assess their qualifications to work in various roles within the emerging cannabis industry.

Hochul, meanwhile, signed legislation in November that attempts to make it somewhat easier for financial institutions to work with state-licensed cannabis clients. She also signed a separate bill that’s meant to provide tax relief to New York City marijuana businesses that are currently blocked from making federal deductions under an Internal Revenue Service (IRS) code known as 280E.

While Hochul signed an earlier budget bill in 2022 that included provisions allow state-level cannabis business tax deductions—a partial remedy to the ongoing federal issue—New York City has its own tax laws that weren’t affected by that change. The new measure is meant to fill that policy gap.

Hochul also recently vetoed legislation that would have allowed hemp seeds to be included in animal feed for pets, horses and camelids such as llamas and alpacas.

In September, 66 state lawmakers—about a third of the entire state legislature—also wrote to Hochul urging her to sign a bill that would allow licensed marijuana producers to sell products to tribal retailers. The plan would offer a release valve to hundreds of cannabis farmers who are currently sitting on surpluses but have no place to sell their products. In December, however, Hochul vetoed that bill.

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