Groundbreaking Judgment Against Illicit Cannabis Sales
New York Attorney General Letitia James has successfully wrapped up a landmark legal case against an unlicensed cannabis dispensary chain, imposing a hefty $15.2 million judgment. The fine was levied against David Tulley, owner of "I'm Stuck" and "Weed Warehouse," for illegal operations across multiple locations in New York.
Tulley's operations, spanning Cayuga, Oswego, and Wayne counties, faced severe penalties for selling cannabis without proper licensing and to minors. The judgment issued by New York Supreme Court Judge Richard Healy specifies that the $15 million settlement includes a mixture of disgorgement and penalties.
Details of the Financial Penalties
David Tulley is required to disgorge $7 million of the profits garnered from these unlicensed sales from February 11, 2022, through May 2, 2023. Furthermore, he must pay $8.2 million in penalties for operating without a license and for not adhering to multiple notices from the Office of Cannabis Management (OCM) demanding cessation of the illegal activities.
In an additional breakdown, there are daily penalties amounting to $10,000 for each day Tulley sold cannabis without a license. After receiving an official notice of violation, the penalty escalated to $20,000 per day for continuing the illicit sales.
Enforcement and Public Safety Statement
In her statement, Attorney General Letitia James emphasized that unlicensed operations like those run by Tulley damage local communities and undermine legitimately licensed cannabis businesses. She noted that this case should serve as a stern warning to similar operators across the state.
The OCM echoed her sentiments, noting in their statement that the judgment against Tulley is the largest of its kind to date against an unlicensed cannabis retail outfit and marks a significant enforcement action within the cannabis industry.
Operational Details and Future Implications
David Tulley operated two dispensaries in Auburn, one in Lyons, Ontario, Williamson, Macedon, and Pulaski. Despite being on OCM's radar since early 2022 and receiving several cease-and-desist letters, Tulley persisted in his operations, which he misleadingly described as "consulting" businesses.
Subsequent undercover investigations and complaints about deceptive advertising practices, including selling cannabis to minors, culminated in significant actions during June and July 2023. These actions included inspections, seizures of large quantities of cannabis products, and firm measures to close the operations, leading to the sweeping financial judgment.
Enforcing Regulations for a Fair Marketplace
Daniel Haughney, Director of Enforcement for OCM, stated that this major fine sends a crystal clear message to illicit operators that strict enforcement of regulations is a priority to ensure the safety and integrity of the cannabis industry. He stressed the state's dedication to protecting consumers and establishing a fair playing field for legitimate businesses.
This milestone case is touted as a pivotal moment for New York State, demonstrating the state's resolve to uphold the law and eliminate illegal cannabis operations. Attorney General Letitia James's firm action underscores the state's commitment to rigorous law enforcement and maintaining the integrity of the burgeoning legal cannabis market.
