Dozens of businesses that have been shut down in the cannabis enforcement blitz that New York City Mayor Eric Adams launched in early May are filing a class-action lawsuit against the city to stop the expedited closures, claiming they’re unconstitutional.
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The enforcement effort, dubbed “Operation Padlock to Protect,” closed more than 300 stores suspected of making unlicensed cannabis sales between May 7 and June 3, according to Adams' office. The current pace of closures is fueled by state cannabis reforms passed in April that allow the NYPD and the local sheriff’s office to padlock a store suspected of selling cannabis without a license on the first inspection, without first obtaining a court order.
The lawsuit, which was filed by 27 businesses on Wednesday, alleges that this practice violates the shop owners’ constitutional due process rights because it lacks judicial oversight. The complaint seeks an injunction to halt the practice, and compensation from the city for lost revenue and other damages.
In a statement sent to Gothamist, Liz Garcia, a spokesperson for Adams' office, didn't specifically address the lawsuit's concerns about stores being immediately locked without judicial oversight.
“The Adams administration has been clear that the purpose of ‘Operation Padlock to Protect’ is to close down illegal cannabis and smoke shops to protect New Yorkers and better support the legal market by allowing justice-impacted and other legal cannabis business owners to thrive," she said.
The city's and state's past crackdown attempts failed to make a dent in the 2,900 stores the sheriff’s office estimates are making unlicensed cannabis sales across the five boroughs. Shutting a store down previously required multiple inspections and months long legal proceedings, if it worked at all.
Under state law, officers can immediately lock up any store they allege poses an imminent health and safety threat. That could entail being located close to a school or church, selling to minors or processing cannabis onsite.
Store owners are entitled to hearings with the city’s Office of Administrative Trials and Hearings, also known as OATH, within five days of a raid. But the administrative officer overseeing the hearing can only recommend that a business' closure be overturned; the final decision is up to the sheriff’s office. The decision can’t be appealed to the sheriff or the OATH, and if the sheriff's office upholds the initial closure, it remains in place for a year.
“The locking of stores should never be allowed without a hearing being conducted, and the hearing shouldn't be done at OATH, which is controlled by the mayor's office,” said Lance Lazzaro, the lawyer who filed the suit. “It should be done in a court of law where you have an impartial judge.”
Recently, other attorneys have also raised due process concerns over the NYPD searching stores and seizing products without a warrant.
The lawsuit names as plaintiffs several stores that have been shut down through “Operation Padlock.” In some of these cases, the suit says, the administrative hearing officer recommended the closure be overturned but the decision was overruled by the sheriff’s office.
Lazzaro and other lawyers representing businesses that were issued citations or closed in the enforcement sweep have told Gothamist that in some cases, the sheriff followed the hearing officer’s recommendation to reopen a shop. But the sheriff’s final determinations have not been made public and the sheriff’s office has declined multiple requests to share them.
Half a dozen licensed dispensary owners told Gothamist that they had gotten a welcome bump in business from displaced customers as the city has continued its crackdown.
Wei Hu, a co-owner of Lenox Hill Cannabis Co. on the Upper East Side, praised “Operation Padlock” last month after the city shut down three shops in his neighborhood on May 11. He said some customers have come in with products they purchased at unlicensed shops and asked if his store sells anything similar.
But advocates for the shop owners who have been accused of making unlicensed cannabis sales said their livelihoods are also at risk.
“A closure order can mean the death of a small business,” said Charles McMellon, an attorney representing shops that have been shut down but aren't named in the current class-action lawsuit. “The businesses run from only cannabis sales to bodegas that have everything from sandwiches to potato chips and soda.”
So far, 133 licensed cannabis vendors have opened statewide. Gov. Kathy Hochul is in the process of overhauling the state Office of Cannabis Management to try to speed up licensing.
This story has been updated to reflect a statement from Mayor Eric Adams' office.
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