New York said it cracked down on marijuana ‘gifting’ — Or did it?

New York was trying to send a message.

The state permitted marijuana possession last year, but recreational sales of the drug remain illegal until regulators can set up business licenses. This process has been slow — with the first legal sales still months away. But recreational dispensaries didn’t want to wait and began “gifting” their customers weed with the purchase of, say, a digital video – exploiting a potential loophole in the state law.

So New York’s Office of Cannabis Management (OCM) organized a public crackdown in February – complete with a press release touting its efforts – announcing it mailed out cease-and-desist letters to what it claimed were more than two dozen retailers engaging in unlicensed, unlawful sales.

Or at least that’s what the state agency said at the time.

In an email to Gothamist last week, OCM refused to acknowledge whether the cease-and-desist letters actually exist.

Rashied McDuffie, the office’s deputy general counsel, wrote on May 2nd that OCM had conducted a “diligent search” for the letters after Gothamist filed a Freedom of Information Law, or FOIL, request for them in February.

“Based upon this search, OCM does not confirm nor deny the existence of a letter sent by it to any entity,” wrote McDuffie, who went on to say that if the letters do exist, they would be exempt from public disclosure because they were “compiled for law enforcement purposes.”

The confusing case of the cease-and-desist letters comes as state officials struggle to rein in the legal gray area of “gifting” marijuana, despite threatening to withhold cannabis licenses from anyone found to engage in the practice. Officials have also pledged to impose fines or criminal penalties.

But OCM has repeatedly refused to say which businesses it sent the letters to, leaving unanswered questions about what areas of the state have been targeted for enforcement and how successful or unsuccessful the crackdown effort has been. Gov. Kathy Hochul also pledged a new era of transparency when she took office last August.

Gifting is one of the models being used by gray-market dispensaries in New York City and other parts of the state in recent months. Even though dispensary licenses haven’t been issued yet, it’s become easier for customers to get THC products from stores since legalization took effect, rather than relying solely on underground dealers.

In New York City, the NYPD has made only 17 arrests for marijuana sales since the drug was legalized in March 2021, including five in the first three months of 2022, according to city data. Asked whether any of those arrested were selling cannabis out of a storefront, the NYPD directed Gothamist to file a Freedom of Information Law request.

Gothamist filed its formal request for the state’s cease-and-desist letters on February 8th, the same day OCM issued a press release and “sample letter” detailing its efforts. The request was made to determine which businesses received the letters and where they were located, something OCM had declined to provide.

Under FOIL, state and local entities are required to hand over public records upon request. But the government can hold things back under certain exemptions, including when officials believe releasing documents could “interfere with law enforcement investigations” or “deprive a person of a right to a fair trial or impartial adjudication.”

McDuffie cited that exemption when declining to hand over the letters – “If there were such a letter,” as he put it.

OCM says its decision to avoid acknowledging the existence of the cease and desist letters is largely about declining to reveal the letters’ recipients.

In response to questions about McDuffie’s decision, OCM spokesperson Freeman Klopott said the office received a number of different FOIL requests for the letters and settled on a uniform response. Some requests, like the one filed by Gothamist, were broad, seeking all letters sent. Other requests were specific to a particular business, meaning that recognizing the existence of the letter “would have inherently implied a specific business was under investigation,” Klopott said in a statement.

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