A judge found that New York City officials and State officials charged with the enforcement of cannabis laws acted beyond their jurisdiction when they conducted warrantless raids on licensed hemp businesses.
A lawsuit claims that the raids conducted by New York City’s (NYC’s) Sheriff’s Office, and New York’s Office of Cannabis Management officials (OCM), are related to the unlicensed shops which have proliferated throughout the state since former Governor. Andrew Cuomo signed adult-use cannabis laws into law in march 2021.
In New York it took an additional 15 months before 100 licensed dispensaries opened their doors. The illicit market thrived in this time between the launch of adult-use cannabis sales by one retail location in December 20,22 and the opening of the licensed facilities. According to the NYC Sheriff’s Office, there are more than 3,600 cannabis stores in NYC that do not have a license and operate in violation of law.
City officials and Governor. Kathy Hochul have waged a new war on the state’s unregulated cannabis market to shut down smoke shops, vape shops and other retailers offering products that don’t adhere to the same stiff regulatory standards as licensed dispensaries—from testing for consumer safety to paying excise taxes to fund state programs.
Thomas Marcelle, New York Supreme Court justice, says that state and local agencies went too far.
Marcelle, in an order and decision filed in Albany County on Jan. 13, wrote that “These agencies began enforcement activities, which is their responsibility, against stores selling cannabis without a licence.” According to petitioners in the case, the problem is that these enforcement activities were directed not only at shops operating against the law, they also targeted state-licensed Hemp Stories.
Five hemp companies that have filed the suit are licensed to sell cannabinoid-hemp products. The five hemp businesses that filed the lawsuit operate with cannabinoid hemp retail licenses. petitioners include:
- Super Smoke n Save LLC, located in Saratoga Springs
- Two Strains Cannabis Co. LLC is located in Queensbury.
- Brecken Gold Athletics NYC LLC, located in Manhattan
- Breckenridge Café NYC LLC (located in Brooklyn)
- 7 Leaf Clover, located in Brooklyn
In their lawsuit, petitioners assert that city and/or state officials had searched and seized their licensed goods in violation of Fourth Amendment rights guaranteed by the United States Constitution.
Super Smoke was inspected by the OCM and state Department of Tax and Finance on 5 June 2024.
According to the lawsuit, OCM officers searched the shop that same day without warning, with no warrant or assistance from armed DTF agents, as well as New York State Police troopers.
In the order dated Jan. 13, it states that OCM’s inspector found containers of THCA edibles (including edibles and concentrates), delta-8 THC edibles (including edibles and concentrated), THC P edibles and THC V edibles as well as THC B concentrates.
Marcelle wrote: “OCM asserts that these products exceeded the scope and authority of Super Smoke’s hemp license.” The OCM investigator did not base this conclusion on the results of testing, nor the required certificates for analysis.
According to the suit, as a result of this, OCM sent Super Smoke an official notice for violation. It also affixed to its front door a sticker stating that illegal cannabis had been seized on the premises.
Super Smoke has claimed that since those actions it has seen a substantial decrease in its customer base and sales. This could put the business at risk.
Marcelle ordered the OCM on Jan. 13 to remove violation notices and confiscated items from petitioners stores unless they can prove definitively that these products are contaminated with intoxicating substances or cannabinoids, as determined through testing instead of by government agents who have been trained or not.
According to the lawsuit, similar stories were told by the other four cannabinoid-hemp licensed businesses that filed the suit, as well as $100,000 worth of products seized from Brecken Gold Sports.
The five hemp companies claimed, in particular, that warrantless searches were in violation of their constitutional right against unreasonable searches and seizures. However, respondents to the case maintain that they are exempt because their searches fall under the administrative search exception.
Marcelle ruled that sales of intoxicants—such as cannabis and hemp-derived cannabinoid products—are considered prototypical examples of “pervasively regulated businesses” in a “closely regulated industry,” which fall under an administrative search exception. However, Marcelle said the exception for “closely regulated industries” does not operate automatically.
The justice stated that “rather, it is the responsibility of the legislature to pass statutes authorizing administrative searches without warrants.” The parties in this case are hotly debating whether or not it was the intent of the legislature to allow the OCM, and sheriff’s office to carry out warrantless administrative search.
Marcelle, after examining the merits and statutory authority of the case, determined that it was forbidden for the NYC Sheriff’s Office to inspect licensed OCM business, concluding these businesses were subjected to inspections only by OCM.
“As was adduced at the hearing, OCM inspectors are trained on the statutory, scientific, and administrative distinction between hemp and marijuana—sheriff deputies are not,” the justice wrote. The justice wrote: “Therefore under the law, sheriff deputies are not trained on this distinction.” [New York cannabis law]”The sheriff’s department lacks the lawful authority of conducting a regulatory or administrative check without warrant on any company that holds a license for hemp or marijuana.”
A judge has ruled that searches and seizures by the sheriff’s office at 7 Leaf Clover & Brecken gold violated their Fourth Amendment rights. The sheriff’s department can still do the majority of their enforcement against non-licensed businesses.
Marcelle, while reviewing OCM’s statutory authority said that the fact there is an exception for the warrant requirement does not give the government the right to disregard the Fourth Amendment.
“The Supreme Court has told governments that seek to conduct warrantless searches that they must place statutory limits on the administrative agents who seek out contraband without a warrant—this has not been done,” Marcelle wrote. It is therefore highly likely, in the court’s opinion, that petitioners would prevail on their claims that OCM had violated Fourth Amendment rights.
In some cases, the Constitution permits warrantless searches. Never give up on your dreams. The justice system has determined that it is not right to give the go-ahead for unreasonable people.
The searches without a warrant were conducted in all cases related to this lawsuit by “heavily-armed” law enforcement officers whose purpose was “to intimidate and force employees and customers to comply,” Marcelle stated.
According to the Justice, in addition, either the respondent or his armed accomplices turned off the surveillance cameras prior to conducting the search, raising suspicions that the search went beyond the administrative purpose.
Marcelle found that this search method was “deeply distasteful” and far removed from the reasonable administration of a search.
Justice ordered the OCM to only be allowed to conduct reasonable inspections with no more that two inspectors. They cannot carry weapons unless there is a documented “specific credible security concern” with regard the company it intends inspecting.
Justice wrote: “Perhaps most interesting is what the respondents didn’t do.” “Respondents omitted what would seem an essential step in conducting a regulatory inspection—inspect the products. Numerous products had the certificates of analysis required by OCM. The COAs for the confiscated products indicated that they were presumed to be legal. The QR codes were never scanned by the respondents to ensure compliance.
Marcelle also determined that OCM had not performed any on-site tests of the product in question.
Justice wrote: “It is shocking that the sheriff’s office destroyed all the samples upon confiscation, so there could never be any testing.” The justice wrote that “this willful disregard for the nature of these products reveals a search which is not administrative.”
According to the ruling, authorities from the state and the city also seized items that had been designated as interstate products under the Farm Bill 2018 but were not intended to be sold in New York. They were therefore outside the legal reach of the seizing authority.
Marchelle wrote that it’s “always wise to remember history,” pointing to royal customs officers from England who employed writs of assistance to search and seize untaxed contraband during colonial times—a conflict as old as “our nation.” His opposition to searches like this was the main driving force behind the American Revolution.
The justice concluded that “in sum, the enforcement actions conducted by respondents against petitioners were far from an administrative inspection seeking to cull proof of regulatory violations.” “The court often hears cases, like those from agriculture and markets, involving state inspectors inspecting businesses—there, regulators come armed with clipboards, forms and pens, and not guns, bulletproof vests and handcuffs.”