Where T-shirts are Expensive – But the Pot is “Free”

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HempSol CBD brand t-shirts in Henrietta cost $ 65 a piece, but the accompanying bag of marijuana is free.

“It’s an expensive T-shirt, isn’t it?” Said an employee at a recent sale. “But, we are giving you a free gift.”

The “gift” was an eighth of an ounce of a pungent herb variety called Rocket Fuel, known for its fast, sedating effect.

While recreational cannabis use is now legal in New York City, state law bans retail as lawmakers craft the infrastructure that will govern the regulated market, which is expected to be at least a year away. .

But that hasn’t stopped HempSol from putting marijuana in the hands of paying customers by taking advantage of a provision in the law that allows adults to transfer or give each other up to three ounces of the plant without compensation.

The idea is that customers pay for the t-shirt, not the weed. Wink wink. Nudge, nudge.

“It’s one of those cute kinds of arguments that, ‘Oh, we’re offering it,’ said Jason Klimek, a lawyer at Barclay Damon in Rochester who specializes in cannabis law. “But this clearly violates the spirit” of the law.

HempSol owner Jim Mackenzie has defended the practice as legal. He said his store had marijuana as a “gift” with other purchases since recreational use was legalized in the spring, and claimed to have a list of 16 different strains and cash in stock.

“We started doing this after talking with our lawyer,” Mackenzie said. “They said it was a gray area, basically. If you don’t sell it in New York State, by law, it’s legal.

Companies that exploit “giveaway” clauses are not a local or new phenomenon. Reports of such activity have surfaced in almost every state that has legalized the recreational use of cannabis – sometimes before, and sometimes after the regulatory framework for legal sales was put in place.

In Massachusetts, for example, a juice delivery company called High Speed ​​transported drinks with “free” bags of marijuana. Another company called Duuber dropped t-shirts with weed as a “gift”.

The legalization of cannabis in Washington, DC, has spawned a cottage industry of “donations”. Dozens of shops, delivery services, dating and even tour guides in the city have taken to “gifting” cannabis products.

One of these stores, Gifted Curators DC, sells digital street art prints by local artists and “offers” a variety of buds, edibles, cartridges and extracts. Another company, Bagged Buds, delivers vintage cars to paying customers. The accompanying ounce of bud is a thank you for their business.

Despite proclamations from elected officials, law enforcement and cannabis lawyers in other states that these transactions violate the law, criminal prosecution reports are rare.

“At the local level, you know, it was sort of city by city, county by county, but you haven’t really seen a lot of political will at the local level in a lot of places to prosecute these kinds of crimes,” said Scott Roberts, a cannabis lawyer in Detroit, who analyzed the legality of the “gift” when it surfaced in Michigan.

“As cannabis lawyers, we believe it’s still technically illegal,” Roberts wrote about the practice. “However, the risks of donating marijuana as described are probably more related to where you settle than anything else.”

The Marihuana Regulation and Taxation Act, which legalized recreational cannabis in New York City, does not specifically mention the “gift”. But he is referring to “sale” and “transfer”.

“Selling,” the law says, “does not include the transfer of cannabis or concentrated cannabis between persons 21 years of age or older without compensation” in amounts up to three ounces of cannabis and 24 grams of concentrated cannabis.

Senator Jeremy Cooney, a strong advocate for establishing a legal recreational market in New York City, said companies finding workarounds to retail sales through mechanisms such as “giveaways” are a consequence the slowness of the state to develop a clear policy.

“In the absence of a legal market, these types of shenanigans, I guess I’ll call them, are going to happen,” Cooney said. “This is not in the spirit of the law we passed in the spring.”

The Senate met on Wednesday to appoint the heads of the Cannabis Management Office.

“If we have a fully functioning cannabis management office, we will move to full legalization and a legal market,” Cooney said. “In the absence of state leadership, we will not have the regulations and will continue to see these kinds of workarounds.”

Michael Roche, a lawyer practicing cannabis law at Harter Secrest and Emery in Rochester, said he had not heard of many New York “giveaway” companies and would not recommend it.

“There’s an argument that you could do it, but I think it’s pretty clear that he’s a loser,” Roche said. “The reason I say this is that the law is quite clearly geared towards the sale of cannabis.”

“If you think about the way the alcohol law works,” he continued, “and the cannabis law is very heavily modeled on the alcohol law, you can’t give away. alcohol without a license. “

There is also the question of taxation. By law, when legal cannabis retail stores open, sales will be subject to a 13% tax.

“Say you go to a local butcher and buy a steak and get an eighth free, it’s not even subject to sales tax,” Roche said. “There would be no tax, and New York State will not allow that to happen.”

Includes reporting by David Andreatta.

Gino Fanelli is a CITY staff writer. He can be reached at (585) 775-9692 or [email protected].

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