New York State Directs Authorities To Shut Down A Cheektowaga Cannabis Lounge
The owner of a new cannabis lounge in Cheektowaga says he has unfairly been shut down by local authorities, per direction from New York State. The owner posted a letter addressed from the Town of Cheektowaga. The correspondence says that officials with Cheektowaga received guidance from the New York State Cannabis Control Board and Office of Cannabis Management to close the business. The reason stated in the letter claims that the Rolling 420s Lounge was operating without a legal cannabis permit.
Rolling 420s CEO Says There Is No License For His Business Model
The new and unique cannabis lounge opened in Cheektowaga. While adult-use recreational dispensaries and on-site consumption lounges aren't open around New York State yet, this lounge is a bit different. The Roaring 420s Lounge is actually a private club where you have to be 21-years-old or over and a member. If you're a member, you don't purchase marijuana, you get samples. The club also provides other services, according to what CEO John Averill told Channel 7,
They will roll joints for you, they will pack bongs, they will provide you edibles, they will let you sample any item in their possession. None of the cannabis we have here is for sale, we don't even buy it, it's donated to us free of charge, we don't allow anyone to leave with it. It's not even guaranteed with the membership.
Essentially, the club offers private and exclusive membership. The Rolling 420s Lounge commented on the Instagram post above about seeking a license,
Do they have a license?
@gabbykuzara there is no license for what we do, nor one planned
The club is asking for support from the community. You can sign its petition here,
A statement on the petition page says in part,
In a misguided attempt to eliminate illegal cannabis businesses from the Town of Cheektowaga New York, The Roaring 420s Lounge - a market research company - was included in a town-wide revocation of occupancy permits granted to cannabis businesses and cannabis-ancillary businesses. While that revocation acted on a guidance expressed by the Office of Cannabis Management, it was incorrect interpretation of that guidance to include The Roaring 420s Lounge.
Could The Real Issue Behind The Closure Be Taxation?
New York State predicts that the adult-use cannabis industry will generate millions, possibly billions of dollars in revenue. The state plans on taking its cut from all the money made with a robust taxation plan. In addition to taxing distributors of adult-use marijuana products in the state, there are two other taxes that consumers will pay once the first legal retail dispensaries and lounges open,
There is a state excise tax imposed on the sale of cannabis products by a retail dispensary to a cannabis consumer at 9 percent of the products’ price.
Third, there is a local excise tax imposed on the sale of cannabis products by a retail dispensary to a cannabis consumer at four (4) percent of the products’ price. This tax is distributed to local governments based on where the retail dispensary is located.
New York State Busts 52 Illegal Cannabis Storefronts And Trucks
The Rolling 420s Lounge is not the only marijuana business to be closed by the state recently. New York State isn't playing when it comes to cracking down on illegal cannabis sellers. Legal storefronts have not opened yet for adult use, but that hasn't stopped enterprising people from setting up shop.
The Office of Cannabis Management recently identified fifty-two illicit cannabis stores in the state. Each of the vendors was sent cease and desist letters, requiring that they stop selling marijuana without a proper dispensary license.
These stores falsely depict their operations as legal cannabis dispensaries, but they are not licensed by New York State and are selling untested products that put public health at risk.
The state says that these stores are putting the public at risk. While that could be true, let's keep it real, people have sold marijuana illegally for decades. The biggest difference now is the state's ability to collect tax revenue on cannabis. Tremaine Wright, Chair of New York’s Cannabis Control Board said,
There are no businesses currently licensed to sell adult-use cannabis in New York State. Selling any item or taking a donation, and then 'gifting' a customer a bag of untested cannabis does indeed count as a sale under New York’s Cannabis Law. You need a license to sell cannabis in New York. Licensed sales and a regulated market are the only way New York’s customers will be assured that the cannabis products they are purchasing have been tested and tracked from seed to sale. Sale of untested products put lives at risk. I implore these illegal store operators, and any other stores pretending to be legal operations, to stop selling cannabis products immediately.
Only dispensaries that are licensed to distribute medical marijuana are legally operating.