Matter of George F. West v Chris Alexander, as Acting Executive Director of Cannabis Management
Attorneys and Parties
Brief Summary
Enforcement under the Marihuana Regulation and Taxation Act (MRTA) against unlicensed retail cannabis sales; scope of regulatory inspections and notice-of-violation requirements.
An Office of Cannabis Management (OCM) Administrative Law Judge (ALJ) found West committed unlicensed cannabis sales in June and July 2023 and failed to properly display notice and warning stickers, imposing $35,000 in penalties.
The findings and penalties for the July 2023 unlicensed sale ($20,000) and failure to properly display warning stickers ($5,000).
OCM conceded it never served a notice of violation (NOV) for those specific charges; without timely notice of charges, the penalties were improper and remittal was not permitted (see CPLR article 78 [special proceeding to review administrative action]; CPLR 7804[g] [requires transfer to the Appellate Division when a substantial evidence question is raised]).
Background
West owned a retail store in Canandaigua. In September 2022, an OCM investigator saw cannabis products offered without a license (Cannabis Law § 125[1] [prohibits unlicensed sale of cannabis]). OCM issued a cease-and-desist order (Cannabis Law § 138-a[1] [authorizes cease-and-desist orders and prohibits sale of cannabis or any product marketed or labeled as such without a license]). In June 2023, OCM conducted a regulatory inspection (Cannabis Law § 11[3] [authorizes OCM to conduct regulatory inspections of any business where cannabis or cannabinoid hemp products are cultivated, processed, stored, or sold, irrespective of licensure, excluding residences absent probable cause]) and observed cannabis/hemp products offered for sale, seizing over 200 pounds and issuing an NOV with public warning stickers. In July 2023, an undercover officer bought cannabis at the store; OCM later emailed another copy of the June NOV for reposting. West then posted multiple copies of the NOV and stickers on his storefront in a mocking manner. At a September 2023 hearing, the ALJ found unlicensed sales in June and July 2023 and a failure to properly display notices, imposing $35,000. West commenced a CPLR article 78 proceeding; Supreme Court transferred the matter to the Appellate Division under CPLR 7804(g). Separately, in June 2024, OCM obtained a permanent injunction closing the store under Cannabis Law § 16-a.
Lower Court Decision
The OCM ALJ determined that West engaged in unlicensed cannabis sales on June 28, 2023 (Cannabis Law § 125[1]) and on July 13, 2023, and that he failed to properly display the NOV and public warning stickers, imposing $35,000 in penalties.
Appellate Division Reversal
Modified on the law: annulled the findings and vacated the $25,000 in penalties tied to the July 2023 sale and the failure to properly display warning stickers because OCM never served an NOV charging those violations. The court declined to remit for further proceedings in the absence of timely notice. As modified, the determination was otherwise confirmed. The court upheld the June 28, 2023 violation, holding that OCM’s warrantless regulatory inspection of the public portions of the store during business hours was lawful under Cannabis Law § 11(3) and the Fourth Amendment’s plain-view doctrine; entry into certain nonpublic areas was permissible based on probable cause that cannabis products were present. Due process and discovery claims were rejected; there is no automatic right to Brady/Rosario/Giglio materials in this setting (9 NYCRR 133.15 [OCM hearing rule providing limited pre-hearing disclosure of intended exhibits and witness identifications]), bias was not shown, and lab testing was unnecessary because products were marketed/labeled as THC (Cannabis Law § 138-a[1]).
Legal Significance
Clarifies that OCM must serve a timely NOV for each discrete charged violation before imposing administrative penalties; absent timely notice, the agency cannot cure by remittal. Affirms OCM’s broad regulatory inspection authority under Cannabis Law § 11(3) and the applicability of the plain-view doctrine in public areas, with limited entry into nonpublic areas upon probable cause. Confirms limited discovery rights in OCM administrative proceedings (9 NYCRR 133.15) and that labeling/marketing as THC can constitute substantial evidence of cannabis without chemical testing under Cannabis Law § 138-a(1).
OCM can lawfully conduct warrantless regulatory inspections of public business areas and rely on plain-view evidence, but it must strictly provide timely notice of each charged violation. Products marketed or labeled as THC can support unlicensed-sale findings without lab tests; discovery is limited in these administrative proceedings.