The decision dismissed the argument that state regulators’ “warrantless military style” searches on cannabis retailers are unconstitutional. 

Starting in late 2023, regulators and law enforcement agencies began cracking down on cannabis retailers under enhanced inspection and seizure powers enacted by the Cannabis Control Board (CCB) and the Office of Cannabis Management (OCM).

In August 2024, a group of pot businesses across the state, including Brecken Gold in Midtown Manhattan, brought a case alleging that OCM and the CCB’s raids were constitutional protections against unreasonable search and seizure.

Albany County Supreme Court Justice Thomas Marcelle agreed with the businesses and issued a preliminary injunction that stopped warrantless inspections of cannabis shops, reversed certain punitives notices and returned seized property

The Appellate Division, Third Department, based in Albany, overturned the Albany County Supreme Court’s order restricting key parts of OCM’s enforcement on June 11.

“We find that the public health and safety risks caused by the unlicensed sale of cannabis products outweigh any contingent injury claimed by petitioners,” the appellate court panel wrote in its decision. “Accordingly, we find that Supreme Court abused its discretion in restraining respondents from conducting administrative inspections of petitioners’ businesses in advance of an adjudication on the merits of their petition.”

The court’s decision comes at a turning point for cannabis enforcement in New York City after the head of the New York City Sheriff’s Office, the law enforcement in charge of hemp compliance, was replaced in part due to the office’s handling of illegal cannabis enforcement.

In the Super Smoke N Save LLC et al. v. New York State Cannabis Control Board case, cannabis stores had challenged OCM’s search and inspection regulations as unconstitutional on their face and argued that local law enforcement had violated the law in searching their stores.

In appealing the case, regulators relied on an exception to the constitutional protections when it concerns a commercial property in a “closely” or “pervasively” regulated industry. In those instances, federal law loosens the privacy interests of the owner in the interest of public safety.

The appeals court reasoned that for law enforcement to conduct warrantless inspections, they must fulfill three requirements: there must be a “substantial government interest” in enforcement, warrantless searches must be deemed necessary to enforcement, and the inspection must “provide a constitutionally adequate substitute for a warrant.”

The cannabis businesses argued that the statute fails the third prong because it provides virtually no limits on the search. But the appeals court disagreed with this argument, concluding that licensed retailers agree in advance to be inspected as part of licensure — and that these inspections come with defined limits on the locations and hours.

In the case of Brecken Gold, which was raided in July 2024, they alleged that over a dozen heavily armed police in bulletproof vests burst into the store and proceeded block entry and exit as an OCM inspector seized products that did not have the New York seal of approval, even though the store argued that the products were for online retail only. The retailer argued that many of $130,000 worth of products that the regulators took were never properly tested for compliance.

The court didn’t consider whether these specific inspections referenced in the suit violated state regulations because they had not been subjected to administrative review.

In a press release on Tuesday, the cannabis agency praised the appellate court’s decision as a win for public safety, and said that now that the lower court’s injunction has been lifted, OCM will continue with its expanded enforcement operations.

“While the OCM fully respects the rights of business owners and maintains a structured process for administrative review,” OCM Executive Director John Kagia said in a press release. “We must decisively discharge our statutory duties to mitigate any immediate risks to public health and safety.”