$15.2 Million Ruling Against Illicit Cannabis Shop Owner

Governor Kathy Hochul announced a significant ruling against illegal cannabis operations as the Office of the Attorney General and the Office of Cannabis Management secured a court decision to impose a $15.2 million fine—the largest to date in New York State—against David Tulley, the owner of an unlicensed business operating six illicit cannabis shops in Oswego, Cayuga, and Wayne counties.

“We are putting an end to unlicensed cannabis shops that are undermining our laws and putting public safety at risk," Governor Hochul said. “I committed to safeguarding our communities and supporting legal cannabis businesses by swiftly closing down these illegal operations. This ruling serves as a clear message to unlawful operators that New York State will not tolerate illicit cannabis activities and that the consequences will be severe."

New York State Attorney General Letitia James said, “David Tulley illegally sold cannabis in multiple stores across upstate and central New York and sold unregulated products to underage customers. These illegal and unlicensed stores are budding up throughout the state and are hurting our communities. Today, David Tulley is paying the $15 million price for his repeated illegal activity. 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.”

This historic penalty results from the November 21, 2023, action filed by the Office of the Attorney General (OAG) on behalf of the Office of Cannabis Management (OCM), which was its inaugural petition for emergency relief under Section 16-a of the Cannabis Law, a freshly enacted provision.

The court ruling against Tulley will require the forfeiture of 90 percent of their illicit earnings from cannabis sales between February 2022, and May 2023, across all their locations. Tulley faces a penalty of $10,000 per day for selling cannabis without a license, escalating to $20,000 per day for continuing unlicensed sales after receiving a Notice of Violation. Additionally, Tulley incurred a $5,000 penalty for removing a notice of violation from their Lyons, NY location on June 27, 2023. Tulley is also responsible for reimbursing the Office of the Attorney General $1,324.98 for their costs. In total, the judgment against Tulley amounts to $15,253,954.10 in disgorgement and penalties, plus interest.

This judgment, occurring just a month after Governor Hochul enacted new enforcement powers, sets a crucial precedent empowering the State to pursue prolonged closures for establishments found guilty of unlawful cannabis sales. In April, Governor Kathy Hochul unveiled new initiatives to shut down illicit cannabis operations and protect the legal marketplace as part of the FY25 Enacted Budget. The plan provides the Office of Cannabis Management and local municipalities with new authority to take action against illicit storefronts and those who enable them. The initiatives are the strongest set of policies enacted thus far to tackle the illicit cannabis marketplace.

Director of Enforcement for the New York State Office of Cannabis Management Daniel Haughney said, “This significant fine sends a clear message to illicit operators that the State will vigorously enforce cannabis regulations to ensure the safety and integrity of the industry. Our decisive action against unlawful activities demonstrates our commitment to protecting consumers and maintaining a level playing field for legitimate businesses. This is a pivotal moment for New York State, demonstrating our unwavering dedication to upholding the law and rooting out illegal operators from our communities, your time in town is up. Also, we would like to thank Sheriff Rob Milby and the Wayne County Sheriff's Office for their invaluable assistance in executing this enforcement task. Their dedication and support were instrumental in carrying out the operations smoothly and effectively, ensuring that the enforcement actions were executed with precision and safety. The collaboration between the Office of Cannabis Management, the Office of the Attorney General, and local law enforcement agencies like the Wayne County Sheriff's Office demonstrates the importance of a united front in upholding the law and protecting our communities from illegal cannabis activities.”