$15M fine levied against owner of unlicensed New York cannabis shops who claims he gave free samples

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The owner of seven unlicensed cannabis shops in New York whose promotions included an Easter egg hunt has been fined more than $15 million after state officials complained he repeatedly ignored notices to stop operating without approval, authorities said.

A state Supreme Court justice in Lyons, New York, imposed the fine against David Tulley on Wednesday. Acting Justice Richard Healy penalized Tulley 90% of his gross sales from February 2022 to May 2023 as well as $10,000 for each day he operated without licenses.

"This punishment should serve as a clear warning for all unlicensed cannabis stores in the state: we will enforce the law and shut down your operations," state Attorney General Letitia James said in a statement, adding that Tulley also was accused of illegally selling cannabis products to underage customers.

Tulley, who owned the I’m Stuck and Weed Warehouse businesses in Cayuga, Oswego and Wayne counties in western New York, said Thursday that he plans to appeal the fine. He also vowed to run for governor and change the licensing laws, which he said favored only certain people.

This Feb. 17, 2016 file photo shows marijuana plants at a home in Honolulu. (AP Photo/Marina Riker, File)

"It's political warfare and socialism in the United States at it's finest," Tulley said of the fine, in text messages to The Associated Press. "Comical. Can't get blood from a stone. ... And I will fix the Cannabis Program so that there is a transitional license for all and really get this market up and running."

Tulley previously said his shops did not need state licenses because they only offered consulting and education about cannabis products for a fee and provided free samples. He also denied selling products to underage people.

New York has had difficulties addressing the thousands of unlicensed retailers that have popped up after legal sales began in the state in late 2022. The problem is particularly pronounced in New York City, where unlicensed retailers have operated with impunity, often from glittering storefronts.

State officials shut down Tulley's shops in July of last year.

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In April 2023, his stores advertised Easter egg hunts in public places including playgrounds and churches, authorities said. The eggs could be redeemed for cannabis products and children’s toys, officials said. A state investigator redeemed numerous eggs for cannabis flower, edibles, cannabis seeds and other products at one of Tulley’s stores in Macedon, authorities said.