§ 131 — Local opt-out; municipal control and preemption

§ 131. Local opt-out; municipal control and preemption. 1. The\nlicensure and establishment of a retail dispensary license and/or\non-site consumption license under the provisions of article four of this\nchapter authorizing the retail sale of adult-use cannabis to cannabis\nconsumers shall not be applicable to a town, city or village which,\nafter the effective date of this chapter, and, on or before the later of\nDecember thirty-first, two thousand twenty-one or nine months after the\neffective date of this section, adopts a local law, subject to\npermissive referendum governed by section twenty-four of the municipal\nhome rule law, requesting the cannabis control board to prohibit the\nestablishment of such retail dispensary licenses and/or on-site\nconsumption licenses contained in article four of this chapter, within\nthe jurisdiction of the town, city or village. Provided, however, that\nany town law shall apply to the area of the town outside of any village\nwithin such town. No local law may be adopted after the later of\nDecember thirty-first, two thousand twenty-one or nine months after the\neffective date of this section prohibiting the establishment of retail\ndispensary licenses and/or on-site consumption licenses; provided,\nhowever, that a local law repealing such prohibition may be adopted\nafter such date.\n 2. Except as provided for in subdivision one of this section, all\ncounty, town, city and village governing bodies are hereby preempted\nfrom adopting any law, rule, ordinance, regulation or prohibition\npertaining to the operation or licensure of registered organizations,\nadult-use cannabis licenses or cannabinoid hemp licenses. However,\ntowns, cities and villages may pass local laws and regulations governing\nthe time, place and manner of the operation of licensed adult-use\ncannabis retail dispensaries and/or on-site consumption site, provided\nsuch law or regulation does not make the operation of such licensed\nretail dispensaries or on-site consumption sites unreasonably\nimpracticable as determined by the board.\n 3. (a) As used in this subdivision and for purposes of any local law\nadopted pursuant to it, the following terms shall have the following\nmeanings: "person" shall have the meaning provided for in subdivision\nforty-a of section three of this chapter; "unlicensed activity" shall\nrefer only to unlawfully selling cannabis, cannabis product, or any\nproduct marketed or labeled as such without obtaining the appropriate\nregistration, license, or permit therefor, or engaging in an indirect\nretail sale; "indirect retail sale" shall have the meaning provided for\nin subdivision forty-six-a of section three of this chapter, except that\nit shall not include cannabinoid hemp or hemp extract product; "place of\nbusiness" shall not include a residence or other real property not\notherwise held out as open to the public or otherwise being utilized in\na business or commercial manner, or any vehicle associated with the\nbusiness, unless probable cause exists to believe that such residence,\nreal property, or vehicle, is being used in such business or commercial\nmanner for the unlicensed activity.\n (b) Any county or city may adopt a local law authorizing an officer or\nagency to conduct regulatory inspections of any place of business\nlocated within the county or city, including a vehicle used for such\nbusiness, not listed on the directory maintained by the office pursuant\nto subdivision thirteen of section eleven of this chapter. Any such\nregulatory inspection shall only occur during the operating hours of a\nplace of business and be conducted for purposes of civil administrative\nenforcement with respect to premises lacking applicable registrations,\nlicenses or permits issued pursuant to this chapter, and in furtherance\nof its purposes, provided that nothing herein shall limit any\nenforcement action under law when illegal activity is observed or occurs\nduring such inspection.\n (c) A local law adopted by a county authorizing regulatory inspections\nshall not apply in any city included within the boundaries of such\ncounty that adopts a local law authorizing regulatory inspections within\nsuch city.\n (d) The local law adopted by a county or a city pursuant to this\nsubdivision shall also:\n (i) require procedures sufficient to ensure that any regulatory\ninspections are conducted in a reasonable manner, are administrative in\nnature, designed to detect administrative violations, in furtherance of\nthe regulatory scheme established pursuant to this section, and designed\nto guarantee certainty and regularity of application;\n (ii) designate a local official who shall serve as the liaison to the\noffice and who shall: (1) be required to ensure that updates to the\ndirectory are immediately incorporated into the local inspection\nprocess, coordinate with the office on efforts to inspect such\nunlicensed businesses and related local enforcement efforts; (2) send\nbi-weekly reports to the office in a manner and format prescribed by the\noffice detailing recent enforcement efforts, including information\nregarding the number and location of inspections conducted, notices of\nviolation issued, and orders to seal issued and executed, and the amount\nand nature of the cannabis, cannabis products, or products marketed as\nsuch seized; and (3) serve as the primary contact for the office in\nconnection with the office's training program and the sharing of\nmaterials made available to counties and cities with regard to the\ninspection and enforcement of unlicensed cannabis businesses;\n (iii) be filed with the office, as well as any procedures or\nregulations promulgated pursuant to the local law. Notwithstanding the\neffective date of any such local law, the local law shall not become\neffective until ten days after it is filed with the office;\n (iv) establish a system for receiving complaints of such unlicensed\nactivity by any business within the county or city, as the case may be;\n (v) provide that any person who engages in the unlawful sale of\ncannabis, cannabis product, or any product marketed or labeled as such,\nor in indirect retail sales, shall be subject to a civil penalty of not\nless than one hundred dollars and not more than ten thousand dollars for\neach day during which such violation continues, with a maximum penalty\nof no more than twenty-five thousand dollars. The penalty provided for\nin this subparagraph may be recovered by an action or proceeding in a\ncourt of competent jurisdiction brought by the county or city to enforce\nthe notice of violation referred to in clause one of subparagraph (vi)\nof this paragraph; and\n (vi) provide that the officer or agency designated to conduct\nregulatory inspections of any place of business not listed on the\ndirectory maintained by the office shall have the authority to:\n (1) issue a notice of violation and order to cease unlicensed activity\nsetting forth the nature of the unlawful conduct along with any fines or\npenalties for such conduct in amounts not to exceed the fines set forth\nin subparagraph (v) of this paragraph and order any person who is\nunlawfully selling cannabis, cannabis product, or any product marketed\nor labeled as such without obtaining the appropriate registration,\nlicense, or permit therefor, or engaging in indirect retail sale, to\ncease such prohibited conduct, provided that any such notice of\nviolation and order to cease unlicensed activity may only be issued\nagainst the business that is conducting the unlicensed activity or an\nindividual owner of the business. Any notice of violation and order to\ncease unlicensed activity shall be served by delivery of the order to\nthe owner of the business or other person of suitable age or discretion\nin actual or apparent control of the premises at the time of the\ninspection and shall be posted at the building or premises that have\nbeen sealed, secured and closed. A copy of the order shall also be\nmailed to any address for the owner of the business at any address\nprovided by the person to whom such order was delivered pursuant to this\nparagraph;\n (2) seize any cannabis, cannabis product, or any product marketed or\nlabeled as such, found in the possession of a person engaged in the\nconduct described in clause one of this subparagraph and in their place\nof business, including a vehicle used for such business, providing that\nthe business that is conducting the unlicensed activity or an individual\nowner of the business, maintain documentation of the chain of custody of\nsuch seized products, and ensure that such products are properly stored,\ncatalogued, and safeguarded until such time as they may properly be\ndestroyed by the county or the city;\n (3) issue an order to seal the building or premises of any business\nengaged in unlicensed activity, when such activity is conducted,\nmaintained, or permitted in such building or premises, occupied as a\nplace of business subject to the procedures and requirements set forth\nin this subparagraph:\n A. The officer or agency may issue an order to seal with an immediate\neffective date if such order is based upon a finding by the officer or\nagency of an imminent threat to the public health, safety, and welfare.\n B. Any order to seal shall be served by delivery of the order to the\nowner of the business or other person of suitable age or discretion in\nactual or apparent control of the premises at the time of the inspection\nand shall be posted at the building or premises that have been sealed,\nsecured and closed. A copy of the order shall also be mailed to any\naddress for the owner of the business provided by the person to whom\nsuch order was delivered pursuant to this paragraph. The order shall\nremain in effect pending a hearing and final determination of a court,\nor until such order is vacated by the officer or agency pursuant to the\nlocal law adopted pursuant to this subdivision. An order to seal shall\nexplicitly state that a request for a hearing may be submitted in\nwriting to the corporation counsel or to the county attorney as\napplicable within seven days. Upon receiving such a request for a\nhearing, the corporation counsel or county attorney shall file a copy of\nthe request with the clerk of the city court or county court in the city\nor county where the building or premises is located.\n C. The court that receives notice of a request for a hearing from a\ncorporation counsel or a county attorney shall fix the date of such\nhearing no later than three business days from the date such notice is\nreceived by the court and provide notice to the parties of the date,\ntime, and location of the hearing. Upon such date, or upon such other\ndate to which the proceeding may be adjourned by agreement of the\nparties, the court shall hear testimony and receive evidence presented\nby the parties. The city or county, as applicable, and the person that\nrequested the hearing shall be parties to the proceeding. Within four\nbusiness days of the conclusion of the hearing, the court shall make a\ndetermination as to: (i) whether the person upon which the order to seal\nwas issued was engaged in unlicensed activity, (ii) if the person is\nfound to have engaged in unlicensed activity, then whether such\nunlicensed activity presents an imminent threat to public health, safety\nand welfare according to subdivision four of section one hundred\nthirty-eight-b of this article, and (iii) whether the unlicensed\nactivity as described in this section is more than a de minimis part of\nthe business activity on the premises or in the building to be sealed\npursuant to the order. However, when an order to seal has been issued\nupon a second or subsequent inspection in which unlicensed activity is\nconfirmed to be continuing more than ten calendar days after a notice of\nviolation and order to cease unlicensed activity was previously issued,\nthe court need only determine: (i) whether the person upon which the\norder to seal was issued was engaged in unlicensed activity; (ii)\nwhether a notice of violation and order to cease unlicensed activity had\nbeen issued eleven or more days prior to the issuance of the order to\nseal; and (iii) whether the order to seal was issued in compliance with\nparagraph (a) of subdivision six of section one hundred thirty-eight-b\nof this article. If the court determines that an order to seal was not\nproperly issued, the court shall vacate such order. If the court is\nsatisfied that an order to seal was properly issued, the court may\nrender a judgment affirming the issuance of an order to seal, and direct\nthe closing of the building or premises by any police officer or peace\nofficer with jurisdiction to the extent necessary to abate the\nunlicensed activity and shall direct any police officer or peace officer\nwith jurisdiction to post a copy of the judgment and a printed notice of\nsuch closing conforming to the requirements of this chapter. The closing\ndirected by the judgment shall be for such period as the court may\ndirect but in no event shall the closing be for a period of more than\none year from the posting of the judgment provided for in this section.\nFailure of a party that requested a hearing to appear at the hearing\nwill result in a default and order of sealing to remain in effect for\nsuch period as the court may direct but in no event shall the order be\nin effect for a period of more than one year from the posting of the\njudgment unless otherwise vacated pursuant to the local law adopted\npursuant to this subdivision.\n D. The local law adopted pursuant to this subdivision shall include,\nwithout alteration the provisions of subdivisions four through twelve of\nsection one hundred thirty-eight-b of this article. Any provisions\nadopted by a local law to the contrary shall be considered specifically\npreempted by this paragraph, provided however that a county or city\nshall be permitted to substitute the officer or agency authorized by the\ncounty or city to conduct regulatory inspections pursuant to this\nsubsection for any reference to the office or board;\n (4) seek injunctive relief against any person engaging in conduct in\nviolation of this section, including through an action pursuant to\nsection sixteen-a of this chapter.\n (e) Upon a demand by the county or city, a respondent or defendant\nshall provide to the county or city prior to a hearing pursuant to\nsubparagraph (v) of paragraph (d) of this subdivision or an order to\nseal pursuant to clause three of subparagraph (vi) of paragraph (d) of\nthis subdivision, within five days after a demand or sooner if a hearing\nis scheduled less than five days from the date of demand, a verified\nstatement setting forth:\n (i) If the responding party is a natural person, such party's: (1)\nfull legal name; (2) date of birth; (3) current home or business street\naddress; and (4) a unique identifying number from: (A) an unexpired\npassport; (B) an unexpired state driver's license; or (C) an unexpired\nidentification card or document issued by a state or local government\nagency or tribal authority for the purpose of identification of that\nindividual;\n (ii) If the responding party is a partnership, limited liability\npartnership, limited liability company, or other unincorporated\nassociation, including a for profit or not-for-profit membership\norganization or club, the information required pursuant to subparagraph\n(i) of this paragraph for all of its partners or members, as well as the\nstate or other jurisdiction of its formation;\n (iii) If the responding party is a corporation, its state or other\njurisdiction of incorporation, principal place of business, and any\nstate or other jurisdiction of which that party is a citizen;\n (iv) If the responding party is not an individual, in addition to any\ninformation provided pursuant to subparagraphs (ii) and (iii) of this\nparagraph, and to the extent not previously provided, each beneficial\nowner of the responding party by: (A) full legal name; (B) date of\nbirth; (C) current home or business street address; and (D) a unique\nidentifying number from: (1) an unexpired passport; (2) an unexpired\nstate driver's license; or (3) an unexpired identification card or\ndocument issued by a state or local government agency or tribal\nauthority for the purpose of identification of that individual. As used\nin this section, the term "beneficial owner" shall have the same meaning\nas defined in 31 U.S.C. § 5336(a)(3), as amended, and any regulations\npromulgated thereunder.\n (f) Notwithstanding any provision to the contrary in this section, a\ncity with a population of more than one million may enforce any\nviolations, orders to cease, and orders to seal related to unlicensed\nactivity through an administrative hearing process.\n