State tax agents backed up by New York City cops arrived at two Manhattan outlets of the Empire Cannabis Clubs on July 11, seizing a large amount of product at one location and making arrests at both. But the arrests were just for \u201cobstruction\u201d of the raids, which were themselves carried out without warrants.<\/p>\n
This represents a first move toward legal action against\u00a0Empire Cannabis Clubs, the most professional and high-profile of the city\u2019s membership-based dispensaries.\u00a0<\/p>\n
Empire Cannabis insists they are operating in conformity with provisions of New York state\u2019s 2021 Marihuana Regulation & Taxation Act (MRTA). This spring, city and state authorities did indeed launch an\u00a0aggressive crackdown<\/a>\u00a0on the Big Apple\u2019s legion of unlicensed cannabis outlets. However, despite receiving \u201ccease and desist\u201d letters from the state Office of Cannabis Management (OCM), Empire Cannabis has gone untouched\u2014until now.\u00a0<\/p>\n Both locations immediately re-opened for business as usual, and Empire Cannabis faces no charges. Empire Cannabis legal counsel Steve Zissou tells\u00a0Cannabis Now<\/em>: \u201cThere was no scheduling of an administrative hearing. No sticker was placed on the shops explaining that \u2018illicit\u2019 sales of cannabis were taking place at the club. No notice of hearing was left.\u201d\u00a0\u00a0<\/p>\n The enforcement teams arrived just before midday at the Empire Cannabis outlets on Eight Ave. in Chelsea and on Allen St. on the Lower East Side for what officials described to the\u00a0New York Times<\/em><\/a>\u00a0as a \u201croutine inspection.\u201d But neither the agents from the state Department of Taxation & Finance (DTF) nor the NYPD cops backing them up had a warrant at either location and at both locations, a standoff with management ensued.\u00a0\u00a0<\/p>\n Jonathan Elfand, one of Empire\u2019s four co-owners, tells\u00a0Cannabis Now<\/em>\u00a0that agents pushed him out of the way to enter the Chelsea location after he arrived there in response to the commotion and that he was briefly detained at the scene.\u00a0\u00a0<\/p>\n \u201cI said, \u2018You are not authorized to come in without a warrant,\u2019 but they just pushed past me,\u201d he says. \u201cI was handcuffed for about 30 minutes but then released without charge.\u201d\u00a0<\/p>\n Two employees at the Chelsea outlet were similarly detained and charged with \u201cobstruction.\u201d According to Elfand, some $30,000 worth of product was seized\u2014vape pens, edibles and flower.\u00a0<\/p>\n His sister and fellow co-owner, Lenore Elfand, was arrested at the Lower East Side location after saying she would not consent to a warrantless search of the store. She was taken to the local 7th Precinct and also charged with \u201cobstruction.\u201d Jonathan says she was actually taken to the precinct house in an unmarked DTF vehicle, an unorthodox move. She was released that afternoon. A manager at the LES location was similarly charged, although not taken into custody\u2014just ticketed.\u00a0\u00a0<\/p>\n However, officers ultimately backed down and did not actually enter the Allen Street store. No property was seized.\u00a0\u00a0<\/p>\n Attorney Zissou takes this as an implicit acknowledgment that Empire was legally in the clear. He points out that MRTA explicitly states that authorities must get an order issued by a state judge if barred access to a site for an inspection.\u00a0\u00a0<\/p>\n The crackdown on New York\u2019s unlicensed sector has been long foretold. There are currently only\u00a019 licensed adult-use dispensaries<\/a>\u00a0operating statewide, of which eight are in New York City. But there are probably upwards of 1,000 unlicensed ones, even after the crackdown that was launched this spring. The big majority of these are in NYC.<\/p>\n In June, Gov. Kathy Hochul\u00a0signed into law<\/a>\u00a0a new measure jacking up the fines for retail outlet violations\u2014$10,000 per day for \u201cillegal\u201d sales and up to $200,000 if unlicensed cannabis is found in a store\u2019s inventory.\u00a0<\/p>\n But Empire Cannabis maintains that this does not change the provisions of MRTA under which it has been\u00a0legally operating<\/a>. If no profit is made on the cannabis transfer and the real money is made on club membership fees, it is not a \u201csale\u201d under New York state law.\u00a0<\/p>\n Empire asserts that it has been paying state taxes since its flagship Chelsea outlet opened in October 2021, and the state has accepted the payments. It now has six outlets\u2014in addition to the Chelsea and LES locations, one in Manhattan\u2019s Soho, and one each in Brooklyn\u2019s Williamsburg, Greenpoint and Fulton Mall. A seventh is the works for Midtown\u2019s 34th Street, directly across from Macy\u2019s department store.\u00a0<\/p>\n \u201cWe run under the \u2018safe harbor\u2019 provision of MRTA,\u201d Jonathan Elfand says. \u201cEverything we\u2019re doing is completely legal. I\u2019m not making any profit here.\u201d\u00a0<\/p>\n He says he told that to the agents at the Chelsea store. \u201cThey said, \u2018Even if you\u2019re not profiting, any distribution of product means you\u2019re required to get a license from OCM,\u2019\u201d he relates. \u201cI said, \u2018No, I\u2019m not profiting so I\u2019m not doing business, I\u2019m providing an experience for New Yorkers.\u2019\u201d\u00a0<\/p>\n Elfand elaborates on how this model works: \u201cWe do free concerts for members, vendor days when you can meet vendors from all over the country, consumption lounges, with free use for all members. I don\u2019t just charge a membership fee to acquire cannabis. It\u2019s a full experience. You get to acquire cannabis from other members of the club, who provide it on a non-profit basis.\u201d\u00a0\u00a0<\/p>\n And Elfand says he isn\u2019t just waiting for the other jackboot to drop\u2014he\u2019s going on the offensive.\u00a0<\/p>\n \u201cI\u2019m going to court to demand the return of my property,\u201d he says. \u201cIf they say it\u2019s contraband, I\u2019ll say it\u2019s legal under the MRTA. If they bring up the quantity, I\u2019ll point to the MRTA provisions saying that if you have their permission, you\u2019re allowed to possess cannabis for someone else. You wanna tell me I\u2019m not allowed to have this much? Yes, I\u2019m allowed to have this much. Here are the contracts; here\u2019s the company statement that we sent to the OCM. You show me where in the MRTA it says I have to have a license.\u201d\u00a0<\/p>\n He dismisses Hochul\u2019s new provision as irrelevant to his operation. \u201cAll the new law does is raise the fines on people who are doing illegal actions,\u201d Elfand exhorts. \u201cI\u2019m not doing illegal actions.\u201d\u00a0<\/p>\n As for the taxation question, Elfand and Zissou explain that Empire Cannabis Clubs has been happily paying sales tax and the other taxes required of general businesses in New York\u2014but not the special excise tax for cannabis instated under MRTA. This is because a \u201csale\u201d under general state law is not limited to non-compensatory transfers\u2014but the definition of a \u201csale\u201d under MRTA is.\u00a0\u00a0<\/p>\n \u201cI\u2019m not required to pay that tax because I\u2019m not selling it,\u201d Elfand insists. \u201cI\u2019m not getting any compensation. I don\u2019t have to get a license and I don\u2019t have to pay the excise tax because I don\u2019t sell cannabis.\u201d\u00a0<\/p>\n \u201cI\u2019ve been waiting for this court battle for two years,\u201d Elfand happily concludes. \u201cLet\u2019s do it. I\u2019m ready for this. All this is doing is allowing me to get into court and prove exactly what I\u2019ve been telling them from day one.\u201d<\/p>\n The Department of Taxation & Finance did not respond to a request for comment from\u00a0Cannabis Now<\/em>\u00a0by press time.\u00a0<\/p>\n The post Empire Cannabis Club Co-Owner, Staff Arrested in NYC for \u2018Obstruction\u2019<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
State tax agents backed up by New York City cops arrived at two Manhattan outlets of the Empire Cannabis Clubs on July 11, seizing a large amount of product at one location and making arrests at both. But the arrests were just for \u201cobstruction\u201d of the raids, which were themselvesContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":190,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[50,213,1365,5838,16490,90,65,17314,3941,208,593,16173],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/66885"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/190"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=66885"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/66885\/revisions"}],"predecessor-version":[{"id":66886,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/66885\/revisions\/66886"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=66885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=66885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=66885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Arrests \u2014But for \u2018Obstruction,\u2019 Not Cannabis\u00a0<\/h4>\n
The Courts Will Decide\u00a0<\/h4>\n
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\nRead More: Empire Cannabis Club Co-Owner, Staff Arrested in NYC for \u2018Obstruction\u2019<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"