New York anti-inversion bill awaits Hochul after Curaleaf ad
Curaleaf urged a signature on Sept. 23; A10698B would let regulators seek suspensions and impose daily civil penalties.
Theo Marchetti
New York's Legislature passed a bill on June 2 to penalize the entry of illicit cannabis into the licensed supply chain, with fines of up to US$10,000 for each day a violation continues. Curaleaf Holdings, Inc. TSECURA OTCMKTSCURLF urged Governor Kathy Hochul to sign it in a Sept. 23 advertisement, according to Cannabis Business Times; its Toronto shares stood at C$16.48 at 12:03 p.m. EDT that day.
The proposed law would give New York another enforcement tool for sales through its licensed market, where Curaleaf operates, but neither the bill nor the company has put a dollar figure on any sales it might recover.
The official history of Assembly bill A10698B shows Assembly passage on June 1 and a Senate vote of 60 to one on June 2. Its status remains “Passed Senate & Assembly,” with no governor signature recorded on the page as of Sept. 24. Curaleaf's appeal seeks that signature, rather than a new legislative vote.
The Bill Targets Illicit Supply
The bill text would add section 125-a to New York's Cannabis Law. It applies to registered and licensed operators, permit holders and testing laboratories, and bars them from using fraudulent or materially unreliable certificates of analysis or falsifying required inventory and chain-of-custody records.
"Cannabis inversion" means any act or omission involving illicit cannabis.
That is the bill's definition of the practice it seeks to prohibit. Its provisions reach cannabis brought into New York from elsewhere and product whose required state taxes were not paid, rather than every transaction in a licensed shop.
A violation could draw a civil penalty of up to US$10,000 for each day it continues. The bill also allows an additional penalty of up to five times the revenue from a prohibited sale, or up to three times projected revenue for illicit cannabis found in someone's possession. Those are proposed maximum penalties, not fines levied against Curaleaf or any other operator.
The Office of Cannabis Management could ask the Cannabis Control Board for a suspension pending investigation of a licensee or laboratory. The Assembly's bill memorandum says the bill is intended to protect lawful sourcing, tax receipts and compliant licensees. A request for suspension would still face the bill's hearing and notice requirements.
For Curaleaf's New York business, the direct change would be stronger sanctions against illicit product passing through licensed channels, if the measure becomes law and regulators use it. The text does not set a sales target for compliant dispensaries or promise that enforcement would redirect purchases to Curaleaf. It also subjects licensed operators to the same prohibition.
Read more: Curaleaf enters FTSE Canada All Cap Index in September review
Hochul's signature or veto is the next decision after the June 2 vote. The Legislature's bill page recorded no date for that decision as of Sept. 24. If she signs it, the Assembly memorandum says the act would take effect 180 days after becoming law.
