§ 131. Local opt-out; municipal control and preemption. 1. The
licensure and establishment of a retail dispensary license and/or
on-site consumption license under the provisions of article four of this
chapter authorizing the retail sale of adult-use cannabis to cannabis
consumers shall not be applicable to a town, city or village which,
after the effective date of this chapter, and, on or before the later of
December thirty-first, two thousand twenty-one or nine months after the
effective date of this section, adopts a local law, subject to
permissive referendum governed by section twenty-four of the municipal
home rule law, requesting the cannabis control board to prohibit the
establishment of such retail dispensary licenses and/or on-site
consumption licenses contained in article four of this chapter, within
the jurisdiction of the town, city or village. Provided, however, that
any town law shall apply to the area of the town outside of any village
within such town. No local law may be adopted after the later of
December thirty-first, two thousand twenty-one or nine months after the
effective date of this section prohibiting the establishment of retail
dispensary licenses and/or on-site consumption licenses; provided,
however, that a local law repealing such prohibition may be adopted
after such date.

2. Except as provided for in subdivision one of this section, all
county, town, city and village governing bodies are hereby preempted
from adopting any law, rule, ordinance, regulation or prohibition
pertaining to the operation or licensure of registered organizations,
adult-use cannabis licenses or cannabinoid hemp licenses. However,
towns, cities and villages may pass local laws and regulations governing
the time, place and manner of the operation of licensed adult-use
cannabis retail dispensaries and/or on-site consumption site, provided
such law or regulation does not make the operation of such licensed
retail dispensaries or on-site consumption sites unreasonably
impracticable as determined by the board.

3. (a) As used in this subdivision and for purposes of any local law
adopted pursuant to it, the following terms shall have the following
meanings: "person" shall have the meaning provided for in subdivision
forty-a of section three of this chapter; "unlicensed activity" shall
refer only to unlawfully selling cannabis, cannabis product, or any
product marketed or labeled as such without obtaining the appropriate
registration, license, or permit therefor, or engaging in an indirect
retail sale; "indirect retail sale" shall have the meaning provided for
in subdivision forty-six-a of section three of this chapter, except that
it shall not include cannabinoid hemp or hemp extract product; "place of
business" shall not include a residence or other real property not
otherwise held out as open to the public or otherwise being utilized in
a business or commercial manner, or any vehicle associated with the
business, unless probable cause exists to believe that such residence,
real property, or vehicle, is being used in such business or commercial
manner for the unlicensed activity.

(b) Any county or city may adopt a local law authorizing an officer or
agency to conduct regulatory inspections of any place of business
located within the county or city, including a vehicle used for such
business, not listed on the directory maintained by the office pursuant
to subdivision thirteen of section eleven of this chapter. Any such
regulatory inspection shall only occur during the operating hours of a
place of business and be conducted for purposes of civil administrative
enforcement with respect to premises lacking applicable registrations,
licenses or permits issued pursuant to this chapter, and in furtherance
of its purposes, provided that nothing herein shall limit any
enforcement action under law when illegal activity is observed or occurs
during such inspection.

(c) A local law adopted by a county authorizing regulatory inspections
shall not apply in any city included within the boundaries of such
county that adopts a local law authorizing regulatory inspections within
such city.

(d) The local law adopted by a county or a city pursuant to this
subdivision shall also:

(i) require procedures sufficient to ensure that any regulatory
inspections are conducted in a reasonable manner, are administrative in
nature, designed to detect administrative violations, in furtherance of
the regulatory scheme established pursuant to this section, and designed
to guarantee certainty and regularity of application;

(ii) designate a local official who shall serve as the liaison to the
office and who shall: (1) be required to ensure that updates to the
directory are immediately incorporated into the local inspection
process, coordinate with the office on efforts to inspect such
unlicensed businesses and related local enforcement efforts; (2) send
bi-weekly reports to the office in a manner and format prescribed by the
office detailing recent enforcement efforts, including information
regarding the number and location of inspections conducted, notices of
violation issued, and orders to seal issued and executed, and the amount
and nature of the cannabis, cannabis products, or products marketed as
such seized; and (3) serve as the primary contact for the office in
connection with the office's training program and the sharing of
materials made available to counties and cities with regard to the
inspection and enforcement of unlicensed cannabis businesses;

(iii) be filed with the office, as well as any procedures or
regulations promulgated pursuant to the local law. Notwithstanding the
effective date of any such local law, the local law shall not become
effective until ten days after it is filed with the office;

(iv) establish a system for receiving complaints of such unlicensed
activity by any business within the county or city, as the case may be;

(v) provide that any person who engages in the unlawful sale of
cannabis, cannabis product, or any product marketed or labeled as such,
or in indirect retail sales, shall be subject to a civil penalty of not
less than one hundred dollars and not more than ten thousand dollars for
each day during which such violation continues, with a maximum penalty
of no more than twenty-five thousand dollars. The penalty provided for
in this subparagraph may be recovered by an action or proceeding in a
court of competent jurisdiction brought by the county or city to enforce
the notice of violation referred to in clause one of subparagraph (vi)
of this paragraph; and

(vi) provide that the officer or agency designated to conduct
regulatory inspections of any place of business not listed on the
directory maintained by the office shall have the authority to:

(1) issue a notice of violation and order to cease unlicensed activity
setting forth the nature of the unlawful conduct along with any fines or
penalties for such conduct in amounts not to exceed the fines set forth
in subparagraph (v) of this paragraph and order any person who is
unlawfully selling cannabis, cannabis product, or any product marketed
or labeled as such without obtaining the appropriate registration,
license, or permit therefor, or engaging in indirect retail sale, to
cease such prohibited conduct, provided that any such notice of
violation and order to cease unlicensed activity may only be issued
against the business that is conducting the unlicensed activity or an
individual owner of the business. Any notice of violation and order to
cease unlicensed activity shall be served by delivery of the order to
the owner of the business or other person of suitable age or discretion
in actual or apparent control of the premises at the time of the
inspection and shall be posted at the building or premises that have
been sealed, secured and closed. A copy of the order shall also be
mailed to any address for the owner of the business at any address
provided by the person to whom such order was delivered pursuant to this
paragraph;

(2) seize any cannabis, cannabis product, or any product marketed or
labeled as such, found in the possession of a person engaged in the
conduct described in clause one of this subparagraph and in their place
of business, including a vehicle used for such business, providing that
the business that is conducting the unlicensed activity or an individual
owner of the business, maintain documentation of the chain of custody of
such seized products, and ensure that such products are properly stored,
catalogued, and safeguarded until such time as they may properly be
destroyed by the county or the city;

(3) issue an order to seal the building or premises of any business
engaged in unlicensed activity, when such activity is conducted,
maintained, or permitted in such building or premises, occupied as a
place of business subject to the procedures and requirements set forth
in this subparagraph:

A. The officer or agency may issue an order to seal with an immediate
effective date if such order is based upon a finding by the officer or
agency of an imminent threat to the public health, safety, and welfare.

B. Any order to seal shall be served by delivery of the order to the
owner of the business or other person of suitable age or discretion in
actual or apparent control of the premises at the time of the inspection
and shall be posted at the building or premises that have been sealed,
secured and closed. A copy of the order shall also be mailed to any
address for the owner of the business provided by the person to whom
such order was delivered pursuant to this paragraph. The order shall
remain in effect pending a hearing and final determination of a court,
or until such order is vacated by the officer or agency pursuant to the
local law adopted pursuant to this subdivision. An order to seal shall
explicitly state that a request for a hearing may be submitted in
writing to the corporation counsel or to the county attorney as
applicable within seven days. Upon receiving such a request for a
hearing, the corporation counsel or county attorney shall file a copy of
the request with the clerk of the city court or county court in the city
or county where the building or premises is located.

C. The court that receives notice of a request for a hearing from a
corporation counsel or a county attorney shall fix the date of such
hearing no later than three business days from the date such notice is
received by the court and provide notice to the parties of the date,
time, and location of the hearing. Upon such date, or upon such other
date to which the proceeding may be adjourned by agreement of the
parties, the court shall hear testimony and receive evidence presented
by the parties. The city or county, as applicable, and the person that
requested the hearing shall be parties to the proceeding. Within four
business days of the conclusion of the hearing, the court shall make a
determination as to: (i) whether the person upon which the order to seal
was issued was engaged in unlicensed activity, (ii) if the person is
found to have engaged in unlicensed activity, then whether such
unlicensed activity presents an imminent threat to public health, safety
and welfare according to subdivision four of section one hundred
thirty-eight-b of this article, and (iii) whether the unlicensed
activity as described in this section is more than a de minimis part of
the business activity on the premises or in the building to be sealed
pursuant to the order. However, when an order to seal has been issued
upon a second or subsequent inspection in which unlicensed activity is
confirmed to be continuing more than ten calendar days after a notice of
violation and order to cease unlicensed activity was previously issued,
the court need only determine: (i) whether the person upon which the
order to seal was issued was engaged in unlicensed activity; (ii)
whether a notice of violation and order to cease unlicensed activity had
been issued eleven or more days prior to the issuance of the order to
seal; and (iii) whether the order to seal was issued in compliance with
paragraph (a) of subdivision six of section one hundred thirty-eight-b
of this article. If the court determines that an order to seal was not
properly issued, the court shall vacate such order. If the court is
satisfied that an order to seal was properly issued, the court may
render a judgment affirming the issuance of an order to seal, and direct
the closing of the building or premises by any police officer or peace
officer with jurisdiction to the extent necessary to abate the
unlicensed activity and shall direct any police officer or peace officer
with jurisdiction to post a copy of the judgment and a printed notice of
such closing conforming to the requirements of this chapter. The closing
directed by the judgment shall be for such period as the court may
direct but in no event shall the closing be for a period of more than
one year from the posting of the judgment provided for in this section.
Failure of a party that requested a hearing to appear at the hearing
will result in a default and order of sealing to remain in effect for
such period as the court may direct but in no event shall the order be
in effect for a period of more than one year from the posting of the
judgment unless otherwise vacated pursuant to the local law adopted
pursuant to this subdivision.

D. The local law adopted pursuant to this subdivision shall include,
without alteration the provisions of subdivisions four through twelve of
section one hundred thirty-eight-b of this article. Any provisions
adopted by a local law to the contrary shall be considered specifically
preempted by this paragraph, provided however that a county or city
shall be permitted to substitute the officer or agency authorized by the
county or city to conduct regulatory inspections pursuant to this
subsection for any reference to the office or board;

(4) seek injunctive relief against any person engaging in conduct in
violation of this section, including through an action pursuant to
section sixteen-a of this chapter.

(e) Upon a demand by the county or city, a respondent or defendant
shall provide to the county or city prior to a hearing pursuant to
subparagraph (v) of paragraph (d) of this subdivision or an order to
seal pursuant to clause three of subparagraph (vi) of paragraph (d) of
this subdivision, within five days after a demand or sooner if a hearing
is scheduled less than five days from the date of demand, a verified
statement setting forth:

(i) If the responding party is a natural person, such party's: (1)
full legal name; (2) date of birth; (3) current home or business street
address; and (4) a unique identifying number from: (A) an unexpired
passport; (B) an unexpired state driver's license; or (C) an unexpired
identification card or document issued by a state or local government
agency or tribal authority for the purpose of identification of that
individual;

(ii) If the responding party is a partnership, limited liability
partnership, limited liability company, or other unincorporated
association, including a for profit or not-for-profit membership
organization or club, the information required pursuant to subparagraph
(i) of this paragraph for all of its partners or members, as well as the
state or other jurisdiction of its formation;

(iii) If the responding party is a corporation, its state or other
jurisdiction of incorporation, principal place of business, and any
state or other jurisdiction of which that party is a citizen;

(iv) If the responding party is not an individual, in addition to any
information provided pursuant to subparagraphs (ii) and (iii) of this
paragraph, and to the extent not previously provided, each beneficial
owner of the responding party by: (A) full legal name; (B) date of
birth; (C) current home or business street address; and (D) a unique
identifying number from: (1) an unexpired passport; (2) an unexpired
state driver's license; or (3) an unexpired identification card or
document issued by a state or local government agency or tribal
authority for the purpose of identification of that individual. As used
in this section, the term "beneficial owner" shall have the same meaning
as defined in 31 U.S.C. § 5336(a)(3), as amended, and any regulations
promulgated thereunder.

(f) Notwithstanding any provision to the contrary in this section, a
city with a population of more than one million may enforce any
violations, orders to cease, and orders to seal related to unlicensed
activity through an administrative hearing process.