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Transcript: Mayor Adams Joins Governor Hochul to Make Cannabis-Budget Related Announcement

April 19, 2024

Governor Kathy Hochul: Good morning. This is a great day. We've waited far too long for this reckoning with all the illegal shops and your day has come. First of all, I want to acknowledge people you'll be hearing from momentarily, but Mayor Eric Adams, representing all the frustrated local elected leaders across our state, but more so here in New York City, where this proliferation of illegal shops has been a source of enormous frustration. I want to thank the mayor for championing this effort that we're announcing here today to get this done with our state legislators and to have a win for the people who want to do the right thing. Let's give a round of applause to Mayor Adams.

Councilmember Gale Brewer, never get in her way. It's just not worth it. She's been a friend of mine for many, many years and I admire her tenacity. She never gives up and we'll be hearing from her in a couple of moments. Steven James, the Superintendent of the New York State Police, who's redefining the role of our state police as SWAT teams that I can deploy when an issue arises. For example, yesterday we spoke about how we're going to be using our State Police heading 100 officers, and members of the State Police to fight retail theft. The same coordination is going to occur here with this initiative, so I want to thank him as well.

Osbert Orduña, the chief executive officer of The Cannabis Place, one of the most patient men I've ever met. He has brought this to our attention. He is legal, he's been surrounded by illegals, and he is waiting for some relief. I thank him for coming here, coming to Albany, and being a voice of reason for all. Daniel Haughney, the director of Investigation Enforcement at the Office of Cannabis Management, and of course our Sheriff Miranda has joined us as well. I want to thank him because he and the men and women of his department have a key role in helping restore sanity to our neighborhood, so I want to thank him. Let's give them all a round of applause.

To all the business owners and the community leaders who brought us to this point today with their insistence that the law had changed, and I'm so glad we could get that over the finish line. A day ago, I stood here talking about my promise to protect small businesses from the scourge of retail theft. I made another promise to the legal cannabis dispensaries and the communities where the illegal shops just seem to lie in every other corner. The illicit operators who flout the rules because they know at most they'll be slapped with a fine that they have also figured out will take months and months to collect, if ever.

Frustrated local leaders have been powerless as these unlicensed shops operate right under their noses, sowing chaos, destabilizing neighborhoods, and attracting other types of crime. License owners like Osbert and so many others like him, they stake their entire futures on New York's legal cannabis industry. They did everything right. They pay their taxes, source their product from New York Farms, and they don't sell to miners. Yet they're forced to compete with rampant bad actors who play by an entirely different set of rules.

People who run these illicit shops engage in fraudulent advertising about what's in their products because they don't really care about your health. They'll source their product from anywhere because they don't care about New York farmers. They'll sell cannabis, gummy rings, ice cream cones, chocolate bars because they don't care about your kids. They'll evade the taxes because they don't care about the communities where they operate. In so doing, they make a mockery of our laws and believe that nothing will ever stop them.

Until today, they've mostly been right. My friends, the insanity stops right now. Why? Because I kept my promises, we kept our promises in doing exactly what we said we would do. I'm using the power of the state budget to give us the tools we need at the state and local level to shutter these illegal shops once and for all. We got it done, and we did it in partnership with our extraordinary leaders: Assembly Speaker Carl Heastie, Senate Majority Leader Andrea Stewart-Cousins, and all the other champions.

The architect of these laws, Liz Krueger, Crystal Peoples-Stokes, and the many others who participated in formulating this package with us. At a future date, we'll be having a bill signing and inviting all of them when they've completed their business, which hopefully will be any day now and all the other legislators who've been supportive of this. We'll be celebrating with them at the conclusion of the session, as I mentioned. Now, we'll celebrate because very soon, we will restore stability and order in these neighborhoods.

We'll weed out the illegitimate shops and clear the way for the licensed owners so they can grow their budding businesses and realize their dreams. Remember, many of these are Black, Latino, women, immigrant, military, veteran, entrepreneurs. Some have been harmed by the long and futile war on drugs. These are the people that our cannabis laws were meant to empower. I'm fighting for them. Now, just like our efforts to combat retail theft, we have a five-point plan. Point one, the state will have the power to padlock the doors of these illicit shops. I'd like to point out that I have a padlock here.

Mayor Eric Adams: You can borrow mine.

Governor Hochul: All right, mayor, let's hold up the padlock, mayor. We got the padlock. Is this really a strong one, mayor?

Mayor Adams: Yes it is.

Governor Hochul: All right, there you go. You can keep your padlock. We're going to be able to padlock these illicit shops. All we have to do is verify that you're selling products not tested or labeled in accordance with our laws. Once we do that, the padlock goes on immediately. See, we hit these shops with a fine, hearings and appeals, they drag on. Guess what? During that process, they stay open and haul in more and more cash and everybody knows it.

Right now, these fines are just a small cost of doing business in their minds, but you know what's hard to factor in your business model, having your front door padlocked for up to a year. You could appeal the fine. You'll get your due process, but while the due process plays out, the padlock stays on. It won't just be the state coming after you, which brings me to point two. We're finally giving local governments authority to create their own laws to padlock illicit shops. Shockingly, the way this was designed, localities were stuck on the sideline in this fight. That ends right now. Now they have the power to enforce. Like I said, this should have been the case all along.

Here in New York City, I have no doubt that enforcement will start immediately. We're marshaling the power of the New York City Sheriff's Office, and I want to thank again Sheriff Miranda for being such a great partner in writing the laws, but also implementing them. They'll be able to ramp up enforcement, and to add even more resources to this, the Sheriff's Office can then deputize the NYPD to help with these enforcement efforts. See what we're doing here? Bringing a lot of people out to say, "The gig is up."

Remember, right now, up until now, the Office of Cannabis Management and the Department of Tax and Finance have been the only agencies empowered to enforce the cannabis laws. Not a good model. There are not exactly thousands of them out in the streets. By listing the localities, not just here in New York, but all across the state, this is not confined to New York City at all. We'll have exponentially more people investigating and eventually helping shut these illegal stores. We're not just focused on the flagrant illegal smoke shops either. That brings me to point three, routing out illegal cannabis products out of the bodegas.

Now, let me be clear, we're not out to close down bodegas, but under our new law, we'll notify bodega owners if they continue to sell illegal products, we'll take away their liquor, tobacco, and lottery licenses. If they still don't comply, then we can put a padlock on their doors. Point four, we're going after the landlords who knowingly give cover to illicit cannabis operators. Here in New York City, if you fail to evict a tenant you know who's selling cannabis illegally, we can hit you with a fine of up to $50,000. Point five, I mentioned the state police.

We're forming a statewide task force that will carry out civil enforcement to close the illegal stores, also while going after their suppliers and busting up the pipeline of illegal cannabis coming in from other states, for much of it is. That's what the illegal storefronts are relying on. This will require close collaboration between state agencies and local law enforcement, something from the beginning of my term, we've proven we're very good at.

New York State Police will play a key role here, and we're already recruiting personnel from other agencies to join the effort. We'll have more details about the formal launch of this task force in the near future. Now, let me be clear. I want to right-size expectations. They got a head start. There's a lot of them out there. Meanwhile, we're pushing and pushing and pushing to get more legal licenses in the pipeline, approved, and get more legal shops open. That is a top priority of mine. We have a lot of catch-up to do.

The illegal shops will not disappear overnight, but New Yorkers eventually will see a change in their communities, and that's we're looking for. Throughout the negotiations, I'll also say this, a lot of tension on this issue, believe it or not. I heard pundits weigh in about the enforcement. I would have to say they're misguided, that they think that somehow this is going to return us to the battle days of mass incarceration of people of color, making cannabis illegal itself. Nothing could be further from the truth.

I want to point out that two-thirds of legal dispensaries are minority and women-owned businesses thus far. Just in the last year, we've doubled the number of legal Black-owned dispensaries that exist nationwide. This isn't happening anywhere else. There's no intentionality to help people of color like we're doing here in New York. That's what sets us apart, and I'm proud of that. New York has more legal shops owned by people directly harmed by disproportionate drug enforcement than any other state combined. These are the people we're fighting for because they are harmed the most. They're harmed the most by these illicit operators. They're the ones losing money.

Our law was written to empower people with prior cannabis-related convictions as well as veterans and MWBEs to just get a jumpstart, get them in the door first. There's plenty of opportunities for everybody, and that's why in accordance with our law, we issue them with licenses first, but giving them priority means nothing if the bad actors are flooding the market with impunity. That's why I fought for these elevated enforcement measures because they actually go hand in hand with equity.

Let me say this. New York's legal cannabis industry has reached a pivotal point. Out of state corporate conglomerates that try to commandeer with a bevy of lawsuits. Jamming us up four months, six months, a year, jamming us up in court so we could not continue the rollout as planned but we fought them off. With those legal battles finally behind us, momentum is picking up. I mentioned we have more than 100 legal dispensaries across New York.

Now thanks to the budget we've negotiated, we have a five-point plan to shutter the illegal operators. By pad-locking illicit shops, we can finally put an end to the chaos that has permeated these neighborhoods. We can build a fair and competitive legal market where tax revenue is actually reinvested in the communities, harmed by the laws of the past, where consumers will know what's in their products, and know that they're safe, and where licensed owners can thrive and build generational wealth for themselves and their families. Thank you.

With that, let me bring up Eric Adams, the mayor of New York City, who's been an extraordinary partner in fighting crime wherever it rears its ugly head. This is just the beginning of taking on these illicit shops throughout the city of New York. Until the next challenge meets our way, we'll be ready for that as well. Mayor Adams.

Mayor Adams: Thank you. Thank you so much, governor. As I was reading the tabloids today, looking over the editorial pages and seeing how it was commented on how some of the major issues we were facing from housing to mayoral accountability, to the cannabis pursuit. The governor just has really stood up and fought for the city. I know at the beginning of the session, as we started the budget process, she made that commitment. She stated that she was going to be here for the entire state in general, but specifically for the City of New York. I cannot thank you enough. We just had this level of confidence.

As I spoke with you, you stated that, "Eric, we're going to fight hard for the city. We know what the city has gone through, dealing with the migrants and asylum seekers and the over-proliferation of illegal cannabis shops." She heard us. Her team sat down at the table and really was extremely thoughtful, engaging, collaborative, made sure that we all came together. I cannot thank you enough for what you have done for the City of New York. As the budget continues to unfold, you will see issue after issue was addressed.

This was one of the top issues. We've heard about the cannabis problem throughout the state. In the city, every town hall meeting I held, someone would stand up and talk about the issues around cannabis. They have become a magnet for impacting our quality of life. When you have an all-cash business, it attracts those who commit robberies. We've had a number of shootings inside our cannabis shops, the selling of the edibles that are not protected with the right regulations. When you look at some of the products that attract young people, the vape products, all those things that we said would not be tolerated in the city, in the state of New York.

This illegal market has destabilized the legal market, and it was a bold decision led by the governor, the speaker, Majority Leader [Andrea Stewart-Cousins] and Speaker of the Assembly Carl Heastie. This is a great moment for our city as we identified a problem and effectively used government to put the tools in place for us to address the problem. Probably all the way from the council chamber, everyone heard the voices of those who stated — the electeds throughout the city who stated, "We must do something for our constituencies on the ground." I want to thank our partners in Albany.

As the governor stated, it could have been a contentious battle as people were really weighing on are we going backwards? Are we going to criminalize those who use legal cannabis? This was a fight that I was part of during my days of 100 Blacks in Law Enforcement Who Care. I fought to make sure we did not criminalize people who had small quantity of marijuana. We saw it happen in the past. This is not a step backwards. This is a step forward to ensure we have legalized cannabis shops and we know New Yorkers, they're fed up.

They watched these shops open throughout their communities, and they were tired and were fed up and we work to deal with this accordingly. We work hard to include all the voices involved, and we are proud to stand together. As the governor stated, illegal cannabis shops, this is your warning. You will be locked out if you attempt to continue to sell illegal items. The governor went further than I could ever imagine. We're now going to those stores who are selling illegal cannabis, but we're saying to them, "If you continue, you will lose your other licenses." This is so important. This was a part of the bill that we could only have hope for and you delivered on it.

It's so crucial. It empowers us to send a strong message that you're not going to circumvent the law and continue to destabilize the fight that we had. New York State can revoke tobacco, liquor, and lottery licenses, so when that jackpot gets up to a $1 billion dollars, people won't be coming in your store to buy that ticket. This is a powerful tool that we could utilize. I'm sure Sheriff Miranda is extremely happy to hear as he has been on the ground attacking this problem firsthand.

These measures combined with our already robust enforcement efforts will help keep the playing field level and push back against the quality of life issues that have resulted from the proliferation of illegal storefronts that really has become far too common in our city and this is our focus. When we came into office, the governor and I have been aligned, revitalizing our economy, protecting our residents, and ensuring we make this city and state more livable for all New Yorkers.

We are getting it done, and legalization is about following the law, not breaking the law. Today, we're taking an important step forward in supporting the legal cannabis market. Even as we work to keep New Yorkers safe from illegal cannabis products and shops, we are laser-focused on ensuring that this market can continue to grow and continue to right the wrongs of the past. We will continue to work together as we improve the quality of life of New Yorkers. It's a proud moment for me. I did not think we would get all that we have gotten on this important issue here. I heard it all the time in the city and we have responded accordingly. Governor, thank you so much. Thank you.

Governor Hochul: Thank you. Osbert Orduña will tell you the trials and tribulations he has experienced from the beginning, and hopefully, this will give a little peace of mind. Osbert.

Osbert Orduña, Founder and CEO, The Cannabis Place: Thank you very much. Let me begin by just saying as a young kid growing up in the projects here in Queens, I never thought that the governor would introduce me by name so that there is just an amazing feat, so thank you, governor. Good morning. My name is Osbert Orduña and I'm proud to say that I am the chief executive officer of The Cannabis Place dispensary, located in Middle Village, Queens. I'm also a board member of the Service-Disabled Veterans in Cannabis Association and the National Hispanic Cannabis Council.

I would like to begin by sharing some background for those of you who may not know, but I stood with you, governor, on a different stage in June of last year in Brooklyn, as you announced more funding for enforcement efforts, and you expressed your commitment to taking action against unlicensed operators. That was a step in the right direction, and that day you promised to maintain an open dialogue. We took you up on that and so just over a month ago, I penned a letter that brought together a diverse group of local and national cannabis advocacy groups.

All of these organizations are in the room right now to share in this moment. Governor, in that letter, we expressed to you the critical need for additional civil enforcement authorities being granted to municipalities. We asked for action against those who enable unlicensed operators like unscrupulous landlords who rent to these bogus storefronts and the big tech and social media companies who turn a blind eye and are complicit in facilitating the growth of these bogus operators by directly misleading New Yorkers to the doors of these unlicensed shops.

Now today, I'm here with you again, Governor Hochul and Mayor Adams and many others saying thank you on behalf of our licensed cannabis community and on behalf of the advocacy groups in the room as well, for making it happen in this budget cycle.

We are sincerely grateful to you, Governor Hochul and the legislature for your proactive leadership efforts. We want to recognize and thank you for bringing together legislators on both sides of the aisle to do what is right for New Yorkers and to take common sense measures to address and eliminate the proliferation of unlicensed cannabis storefronts in our state. We were very clear that we were not in favor of Prohibition 2.0, and you've held true to that promise.

Your dedication to finding inclusive solutions to this issue is commendable and greatly appreciated by our cannabis community. The unchecked growth of unlicensed cannabis establishments and the unscrupulous landlords who enable them create significant risk to our public safety, consumer health, and the integrity of the legal cannabis industry. Your leadership in taking proactive measures to address this critical issue in your landmark 2025 budget demonstrates your commitment to protecting our citizens, supporting and empowering our cities and municipalities, and upholding the principle of the nation's most comprehensive and inclusive, regulated cannabis market in our entire nation.

That is the New York licensed cannabis market. I applaud your commitment to inclusivity and developing solutions that consider the needs of all stakeholders, including licensed cannabis businesses, our communities, local governments, and cannabis consumers. By fostering collaboration and dialogue, you have created a more equitable and sustainable cannabis industry, and it will remain in our state for generations to come.

As a member of the legal cannabis community, I stand in full support of your efforts and pledge to continue advocating for and bringing together diverse groups of cannabis advocacy groups in support of responsible cannabis regulations and responsible enforcement measures. Together, we can work towards a safer and more transparent cannabis market that benefits everyone and raises much-needed tax revenue that will go directly back into our communities, helping our neighborhoods, our seniors, and our youth.

Thank you again, Governor Hochul, for your proactive leadership, advocacy, and dedication for finding common-sense solutions to the many challenges that are facing our state. On behalf of our team at The Cannabis Place dispensary, I would like to give both you and Mayor Adams an open invite to come to our dispensary at 74-03 Metropolitan Avenue in Queens and meet our 22-person team that is made up of a diverse group of individuals: Black, Latino, women, LGBTQ+, and veterans.

These 22 cannabis careers exist today because of the MRTA and your leadership efforts to bring legal adult-use cannabis to the state. Thank you for that. Thank you for your time, everyone, and most importantly on this 4/20 eve, look forward to seeing everyone tomorrow. Thank you.

Governor Hochul: All right. Thank you. To close out our program, let me bring up the unstoppable Councilmember Gale Brewer.

Councilmember Gale Brewer: Thank you very much, governor and mayor. I want to say that one of the reasons I spent so much time trying to close, and I want to thank all the agencies involved, but certainly, picking up on what everyone else said to thank the governor for this legislation is because, and the mayor knows this, you're finding high school students in these shops and then going to high school and vaping. It's outrageous.

They pick locations within feet of a high school. No liquor store can come within 500 feet. Nobody should be able to do that, so that's number one. Second, they put candy in the window. They put balloons in the window, and young 11-year-olds go by and say mommy, daddy, can I go in? Is that candy? Is that something for me? Put cartoons in the window. They're attracting the wrong group of people, number one.

Number two, they're illegal. All these wonderful individuals not only doing their wonderful work of legal cannabis shops but also just legal stores trying to make a business successful have to deal with this next door. I have one individual store that I focused on, Zaza Waza, and it's closed, but as much thanks Mr. Mayor to your wonderful Consumer and Worker Protection, because we went after them on tobacco. They had 47 summonses, six visits, and they were still open.

We padlocked them with the help of Consumer Affairs and PD and they broke the lock that night. To the credit of Consumer Affairs, they came with three huge locks and they're still closed. Because guess what, they went back the next day and illegally sold tobacco again. These are folks who are not good human beings. I'll be honest with you, you can't do that. I'm here to thank also the sheriff who has been unstoppable. He's a real unstoppable person, going store to store trying to figure out with the Office of Cannabis Management, I want to give them a lot of support also, trying to figure out how to make sure that we have legal stores.

The two legal stores that have opened out of 90 illegal ones on the Upper West Side are fantastic. Fantastic owners, fantastic, beautiful spots, and I loved it because the people next door complained about it, and the next thing I knew all their neighbors were coming in to make purchases. I'm here to say thank you to the governor because we really have to close particularly for those high school students, we've got to close those illegal stores. Thank you very much.

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