New York Governor calls on Google, Yelp to stop listing unlicensed stores

New York State Governor Kathy Hochul on Wednesday called out social media companies for helping to promote unlicensed stores and New York legislators for not allowing more strict enforcement.

Hochul was joined by social justice dispensary owners as she addressed the proliferation of unlicensed stores in the state. She noted that the stores are selling untested products and evading taxes.

The governor also pointed out that these outlets sell to minors and engage in fraudulent advertising.

Google & Yelp don’t help

Hochul’s big ask was for social media companies, such as like Alphabet (Nasdaq: GOOG), which is the parent company of Google, and Yelp (NYSE: YELP), to stop listing unlicensed stores. She acknowledged that Google could argue it couldn’t know what isn’t licensed, but noted that the state could provide that information to them.

She also pointed out that some licensed stores aren’t listed by Google, but unlicensed ones are.

“We’re calling on these platforms to do the right thing,” Hochul said.

The governor said the social media platforms are sowing confusion among consumers who believe if it is listed on Google Maps, it must be legitimate.

In response to a question about the state only providing a list of licensed stored, Hochul pledged to look into ways to provide a map to help consumers.

Legislators need to step up

The governor also called out state legislators for not allowing more strict enforcement laws to be passed, despite concern that stronger enforcement could be seen as a return to unfair incarceration practices.

Hochul pointed out that most of the open licensed cannabis stores belong to social justice applicants., so the illicit shops are hurting the very groups that that concern addresses.

The limited laws to enforce cannabis compliance and that assessing fines are having little success, she noted. Raising the fine amounts didn’t help, and collecting the fines has been a slow, arduous process. Hochul called on legislators to allow the state and local municipalities to help close the shops, including padlocking unlicensed stores.

“They can appeal fines and closures, but while that plays out in the courts, they will be shuttered and out of business. The padlock stays on,” she said.

Hochul didn’t directly address whether there should be a change in the cannabis regulators – a concern that has been raised around the troubled rollout – but dhe did say they would do a deep dive to see where they could improve.

Hochul cited the litigation that has affected the program and hurt the regulators who have tried to keep the rollout on schedule.

Legal pays the price

The state, the stores, and the farmers are all paying the price of the illicit shops, the governor pointed out. The state misses out on the tax collections, and the stores miss out on the sales. The New York farmers are competing against out-of-state untested products and have limited stores to sell their products to.

Alfredo Angueira, co-founder of ConBUD, a dispensary on the lower east side of Manhattan, said that many legal operators face dire immediate economic harm with bankruptcy looming over their heads.

“They are undercut and outmaneuvered by illicit operators who have been operating with impunity for far too long,” Angueira said. “From marketing to store design to retail location to products, the illicit storefront market has flouted every single rule and created an unbalanced market for New York state.”

Anguira added that his dispensary is surrounded by 71 illicit stores within 1,000 feet and that roughly equates to at least $20 million in sales.

Sandra Jaquez, president of the Latino Cannabis Association, said her group supports the governor’s efforts and urged the lawmakers to support it as well.

Retired marine Osbert Orduna, CEO of The Cannabis Place, said he represented many minority cannabis organizations in New York and they support the governor’s position. “These aren’t legacy to legal operators,” he said.

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