ALBANY, N.Y. (NEWS10) — The New York State Office of Cannabis Management (OCM) sent letters Tuesday ordering businesses suspected of illegally selling cannabis, including the practice of “gifting”, to cease and desist those operations. If those businesses fail to comply, they may not be able to obtain a license in the legal market and may face fines and criminal penalties. While cannabis sales have been legalized for those over the age of 21, selling it requires a license under the law.

Recent media reports have described businesses as selling a product or service, like club memberships, and providing cannabis as a “gift” in return. Under the Marijuana Regulation and Taxation Act, this practice is illegal. Through an initial investigation, the OCM has identified over two dozen alleged violators and sent letters to each educating them on the law and directing them to stop their illegal activity immediately. OCM spokesperson Freeman Klopott told NEWS10 that they cannot identify the businesses in question, as investigations are ongoing.

“We have an obligation to protect New Yorkers from known risks and to strengthen the foundation of the legal, regulated market we are building.  We will meet the goals of the MRTA to build an inclusive, equitable, and safe industry,” said Cannabis Control Board Chair Tremaine Wright.  “Therefore, these violators must stop their activity immediately, or face the consequences.”

No adult-use licenses have been issued in New York State to date. The only legal means of procuring safe cannabis products is through the Medical Cannabis Program, where becoming a patient requires certification from a medical provider. “New York State is building a legal, regulated cannabis market that will ensure products are tested and safe for consumers while providing opportunities for those from communities most impacted by the over criminalization of the cannabis prohibition, and illegal operations undermine our ability to do that,” said OCM Executive Director Chris Alexander.

Under the MRTA, OCM’s role is to enforce the rules it develops for the Medical Cannabis Program, the Cannabinoid Hemp Program, and the Adult-use Cannabis Program. The office works with governmental partners to enforce the law. To report illicit activity to the OCM, send an email to