Tag Archives: Governor Kathy Hochul

New York Citizens Sue State over Financing of Pot Shops

A group of New York taxpayers, along with two supporting organizations, filed a lawsuit in the New York Albany County Supreme Court on July 29, 2024.

The Cannabis Impact Prevention Coalition and Cannabis Industry Victims Seeking Justice are the primary plaintiffs.   They list the state cannabis agencies and the state tax commissioner as defendants. The suit is called CIPC, et. al. v. New York State Cannabis Control Board, et. al. Index No. 907269-24.  

The lawsuit claims that the defendants would unlawfully use state funds to finance state marihuana/cannabis retail stores.  (The marijuana industry calls pot stores “dispensaries,” and the lawsuit follows this misleading word.) The defendants are using tax funds to pay for the administration and capitalization of these stores. Low and zero-interest loans will be given to certain licensees chosen by the state.

The tax funds will assist with the manufacture, distribution, and/or sale of federally illegal drugs.

Beset by problems from the start, many lawsuits against the New York program have come and gone.  Much of the bickering came from those not favored by the state.  Disabled veterans complained that ex-convicts were given preference over them.  Most recently, Mayor Adams and Governor Hochul claim success for shutting down 1,000 illegal pot shops.

The New York Cannabis Control Board

The Defendants’ program identifies locations for retail marihuana/cannabis stores and negotiates and signs leases for those locations and designs, renovates, and furnishes ready-to-operate facilities, and pays design/build teams to provide these services to enhance the licensees’ ability to successfully conduct a marihuana trafficking business.

How Expensive is it?

The program will spend as much as $200,000,000 out of which initially will be $50,000,000 in tax funds. The defendants will use these funds to enter into leases, subleases or other arrangements and will furnish construction and construction management services for qualified dispensaries and servicing non-recourse loans.

As a result of spending state funds, participating licensees would receive a turn-key cannabis dispensary in a retail location.  Licensees would be obligated to repay the investment over time, but the costs to them would be minimal.

“We are not aware of any business or industry receiving this kind of preferential state funding, especially one that sells addiction for profit.” stated David G. Evans, spokesperson for Cannabis Industry Victims Seeking Justice. “The cannabis of today is very high in potency and causes mental illness, addiction and a host of other social and medical conditions. Many young people are becoming mentally ill from high potency marihuana/cannabis,” noted Evans.

The Plaintiffs’ Claims


The plaintiffs, New York taxpayers, claim the defendants, by financing and money laundering, engage in a federally illegal activity involving financing and money laundering. These actions imperil public interests by conflicting with and violating federal law.  They usurp powers not granted under the United States Constitution.

Plaintiffs have specifically identified wrongful expenditures and continuing wrongful expenditures of State funds by Defendants to bring them within the New York State Finance Law 123-b

Evans further claimed that: “If any landlords are thinking about renting properties to these stores they had better think twice because they are subject to prosecution. It is unlawful to knowingly open, lease, rent, maintain, or use property for the manufacturing, storing, or distribution of controlled substances such as marihuana under 21 U.S.C. 856. This may also violate landlords’ loan agreements with banks. In addition, income from these stores including employee salaries may be subject to federal money laundering laws.”

The plaintiffs are seeking a permanent injunction.   They stand on good ground since the Department of Justice reiterated the fact that cannabis users may not own g

Poppot took the above photo from a seller in New York, probably illegal.  The illegal market, despite efforts to shut it down, is much bigger than the legal market.