New York court issues $15M fine to unlicensed cannabis operator

A New York court has ordered David Tulley to pay a $15.2 million fine for operating six unlicensed cannabis stores in Cayuga, Oswego and Wayne counties, the largest penalty levied in a multiagency effort to curb illicit operations statewide.

Tulley, the owner of the I’m Stuck stores and two additional unlicensed shops in Monroe County, had been operating without a license since early 2022, according to a news release.

Despite receiving cease-and-desist letters from the Office of Cannabis Management (OCM) and notices of violations, he continued to operate his stores, describing them as “consulting” businesses, state regulators said.

In response to Tulley defying the cease-and-desist order, the OCM inspected his stores in June and July 2023 and seized an undisclosed amount of cannabis products.

Undercover investigations by the Office of the Attorney General also revealed sales to minors, tax-exempt sales and deceptive advertising, including an Easter egg hunt offering cannabis products as prizes.

The landmark judgment came a month after New York Gov. Kathy Hochul vastly expanded enforcement authority and resources from the recently approved annual state budget to curb the proliferation of unlicensed marijuana operators.

The court order imposed several other penalties against Tulley, including:

• The forfeiture of 90% of his illicit earnings from marijuana sales from February 11, 2022, to May 2, 2023, at each of his locations.
• A $10,000 daily fine for selling cannabis without a license.
• A $20,000 daily fine for continuing unlicensed sales after receiving a violation notice.
• A $5,000 penalty for removing a violation notice from his Lyons location on June 27, 2023.
• Reimbursing the Office of the Attorney General $1.3 million for legal costs.

The ruling resulted from a November 2023 action filed by the Office of the Attorney General on behalf of the OCM.