The owner of a chain of unlicensed cannabis stores has been slapped with a massive fine as part of a statewide crackdown on illegally operating dispensaries.
$15 Million Cannabis Fine
An unlicensed chain of cannabis dispensaries across multiple counties in New York has been fined $15 million by the state after the owner ignored several notices from state officials ordering him to cease operations.
Lyons Judge
Supreme Court Justice Richard Healy passed down the judgment to owner David Tulley on Wednesday, at a court in Lyons, New York.
Across Seven Stores
The $15 million fine accounts for 90% of Tulley’s gross sales across his seven stores made between February 2022 and May 2023 and $10,000 for every day his stores remained open unlicensed.
$20,000 Per Day
He will also be charged an additional $20,000 per day for every day that he continues to operate after receiving notices and orders from the Office of Cannabis Management (OCM), which makes up $4.34 million of the overall fine.
Permanent Industry-Wide Ban
Tulley will also be permanently banned from operating stores in the legal cannabis industry in New York State.
Registration Required
In accordance with New York Cannabis Laws, all cannabis suppliers and sellers must be registered with the New York State Cannabis Control Board.
Letitia James on the Case
The judgment was secured by NY Attorney General Letitia James, who pursued the case on behalf of several state officials and the OCM who made complaints against Tulley.
“Hurting Our Communities”
“These illegal and unlicensed stores are budding up throughout the state and are hurting our communities,” James said in a public statement. “Today, David Tulley is paying the $15 million price for his repeated illegal activity and will be permanently banned from the cannabis industry in New York.”
“A Clear Warning for All”
“This punishment should serve as a clear warning for all unlicensed cannabis stores in the state: we will enforce the law and shut down your operations,” she continued.
Across Three Counties
Tulley owned two cannabis dispensary businesses, called ‘I’m Stuck’ and ‘Weed Warehouse’ that operated across three counties in the state – Cayuga, Oswego, and Wayne.
More Accusations Fly
During the case, he was also accused of selling cannabis products to underage people, which also violates state laws.
He Will Appeal It
Tulley slammed the verdict, calling it “comical” and “dumb” and making it clear that he plans to appeal the fine.
“No One Has $15 Million”
“It’s comical, it’s dumb,” said Tulley. “No one has $15 million. What does it do for them? Other than let them go to every pot store and say ‘Oooh, if you don’t shut down you’re going to be like Dave Tulley.'”
“Political Warfare and Socialism”
“It’s political warfare and socialism in the United States at its finest,” he continued in a series of texts to reporters.
You Can’t Get Blood from a Stone
“Can’t get blood from a stone. … And I will fix the Cannabis Program so that there is a transitional license for all and really get this market up and running,” he continued.
Denying Claims of Underage Customers
When asked about claims that he had sold cannabis to minors, Tully strenuously denied the allegations, claiming that he “never, ever, ever — not any one of us, ever — sold to minors.”
Protected by OCM Regulations?
He also claimed that according to OCM regulations, he was not required to be licensed because he was only offering consultations and education about cannabis, and would offer free samples as a part of his paid services.
A New State Initiative
Over the last year state authorities have begun cracking down on unlicensed stores, including an initiative announced by Gov. Kathy Hochul last month which will focus on closing “illicit” and unlicensed cannabis stores.
HY25 Enacted Budget
The new initiative, which was enacted as part of the FY25 Enacted Budget has extended further authority to the OCM, allowing the agency to take action against illegal dispensaries through inspections and forced closures when necessary.
Landlords Also Under Scrutiny
Under the FY25 Budget, landlords will also be given steep fines for “turning a blind eye” to tenants violating cannabis laws. Landlords will also be able to legally evict tenants if they can provide proof the tenants are “customarily or habitually” growing and/or selling cannabis without a license.
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Featured Image Credit: Shutterstock / Chris J Bradshaw.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
