S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9364
 
                           I N  A S S E M B L Y
 
                             February 23, 2022
                                ___________
 
 Introduced  by  M. of A. PEOPLES-STOKES -- read once and referred to the
   Committee on Economic Development
 
 AN ACT to amend the cannabis law, in relation to requiring that the sale
   or delivery of cannabis products by distributors to  retailers  be  in
   exchange  for  cash  to  be  paid  at the time of delivery or on terms
   requiring payment by such retailer for such cannabis products

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The cannabis law is amended by adding a new section 78-a to
 read as follows:
   § 78-A. TERMS OF SALE. 1. AS USED IN THIS SECTION:
   A.  "CREDIT  PERIOD"  MEANS  A  PERIOD  BEGINNING ON THE DATE CANNABIS
 PRODUCTS ARE DELIVERED AND ENDING THIRTY DAYS THEREAFTER.
   B. "PAYMENT PERIOD" MEANS THE PERIOD BEGINNING ON  THE  DATE  CANNABIS
 PRODUCTS  ARE  DELIVERED  AND  ENDING ON THE THIRTIETH DAY FOLLOWING THE
 DATE ON WHICH CANNABIS PRODUCTS ARE DELIVERED.
   C. "FINAL PAYMENT DATE" MEANS THE LAST DAY OF A PAYMENT PERIOD.
   D. "NOTIFICATION DATE" MEANS, NOTWITHSTANDING SECTION  TWENTY-FIVE  OF
 THE GENERAL CONSTRUCTION LAW, FOR DELIVERIES ON:
   (I) MONDAY, THE MONDAY IMMEDIATELY FOLLOWING A FINAL PAYMENT DATE;
   (II)  TUESDAY,  THE  TUESDAY  IMMEDIATELY  FOLLOWING THE FINAL PAYMENT
 DATE;
   (III) WEDNESDAY, THE WEDNESDAY IMMEDIATELY FOLLOWING THE FINAL PAYMENT
 DATE;
   (IV) THURSDAY, THE THURSDAY IMMEDIATELY FOLLOWING  THE  FINAL  PAYMENT
 DATE;
   (V) FRIDAY, THE FRIDAY IMMEDIATELY FOLLOWING THE FINAL PAYMENT DATE.
   E.  "RETAILER"  MEANS  A  PERSON LICENSED TO SELL CANNABIS PRODUCTS AT
 RETAIL  FOR  ON-PREMISE  CONSUMPTION  OR  FOR  OFF-PREMISE   CONSUMPTION
 (INCLUDING  A  PERSON  HOLDING A PERMIT GRANTED BY THE BOARD PURSUANT TO
 THIS ARTICLE).
   F. "CANNABIS PRODUCT" SHALL HAVE THE  SAME  MEANING  AS  THE  TERM  IS
 DEFINED IN SUBDIVISION NINE OF SECTION THREE OF THIS CHAPTER.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14635-01-2
              

 A. 9364                             2
 
   G. "CASH" MEANS AND INCLUDES CURRENCY AND COIN OF THE UNITED STATES OF
 AMERICA,  CERTIFIED  CHECK, MONEY ORDER, ELECTRONIC FUNDS TRANSFER, BANK
 OFFICER'S CHECK OR DRAFT, OR A CHECK DRAWN ON THE ACCOUNT OF THE RETAIL-
 ER PAYABLE TO THE DISTRIBUTOR AND DATED NO LATER THAN THE DATE OF DELIV-
 ERY  OF  THE CANNABIS PRODUCTS AND WHICH IS HONORED UPON PRESENTMENT FOR
 PAYMENT, PROVIDED, HOWEVER,  THAT  IF  ANY  CHECK  OR  OTHER  INSTRUMENT
 DESCRIBED  HEREIN  TENDERED  BY A RETAILER ON THE DELINQUENT LIST IS NOT
 HONORED UPON PRESENTMENT FOR PAYMENT, THE LICENSE OF SUCH  RETAILER  MAY
 BE  SUSPENDED  FOR NOT MORE THAN FIFTEEN DAYS FOR THE FIRST OFFENSE, AND
 NOT MORE THAN SIXTY DAYS FOR A SUBSEQUENT OFFENSE, WHICH  PENALTY  SHALL
 BE IN ADDITION TO THE PENALTY PROVIDED FOR BY THE PROVISIONS OF SUBDIVI-
 SION  SIX  OF  THIS  SECTION,  AND PROVIDED FURTHER, THAT NOTHING HEREIN
 CONTAINED SHALL REQUIRE A DISTRIBUTOR TO ACCEPT A CHECK TENDERED  BY  OR
 DRAWN  ON  THE  ACCOUNT  OF A RETAILER ON THE DELINQUENT LIST UNLESS THE
 SAME HAS BEEN CERTIFIED.
   H. "DISTRIBUTOR" SHALL HAVE THE SAME MEANING AS THE TERM IS DEFINED IN
 SUBDIVISION TWENTY-FOUR OF SECTION THREE OF THIS CHAPTER.
   2. NO DISTRIBUTOR LICENSED UNDER THIS CHAPTER SHALL  SELL  OR  DELIVER
 ANY CANNABIS PRODUCT TO ANY RETAILER EXCEPT:
   (A) FOR CASH TO BE PAID AT THE TIME OF DELIVERY; OR
   (B)  ON  TERMS  REQUIRING  PAYMENT  BY SUCH RETAILER FOR SUCH CANNABIS
 PRODUCTS ON OR BEFORE THE FINAL PAYMENT DATE OF THE  CREDIT  PERIOD  FOR
 WHICH DELIVERY IS MADE.
   3.  EACH SUCH DISTRIBUTOR IS HEREBY REQUIRED, ON OR BEFORE THE RESPEC-
 TIVE NOTIFICATION DATES FOR  EACH  RETAILER  LICENSE,  TO  GIVE  WRITTEN
 NOTICE  OF  DEFAULT,  BY FIRST CLASS MAIL, TO ALL SUCH LICENSEES THEREIN
 WHO HAVE FAILED TO MAKE PAYMENT TO HIM OR HER ON OR BEFORE  THEIR  FINAL
 PAYMENT  DATE  FOR  CANNABIS PRODUCTS SOLD OR DELIVERED TO THEM DURING A
 CREDIT PERIOD ENDING ON THEIR FINAL PAYMENT DATE. NO RETAILER  SHALL  BE
 PLACED IN DEFAULT IF THE DISTRIBUTOR HAS ISSUED AN ACCOUNT CREDIT TO THE
 RETAILER,  WHICH AFTER APPLICATION TO ALL DEBTS OWED BY THE RETAILER, IS
 EQUAL TO OR GREATER THAN THE AMOUNT OF THE DEFAULT.  ANY  SUCH  RETAILER
 RECEIVING  SUCH  NOTICE  SHALL NOT THEREAFTER PURCHASE CANNABIS PRODUCTS
 EXCEPT FOR CASH UNTIL SUCH TIME AS THE BOARD DETERMINES THAT HIS OR  HER
 NAME SHALL NOT BE PUBLISHED ON THE DELINQUENT LIST AS PROVIDED IN SUBDI-
 VISION  FOUR  OF  THIS  SECTION, OR UNTIL SUCH TIME AS THE BOARD PERMITS
 SALES OR DELIVERIES TO HIM OR HER AS PROVIDED  IN  SUBDIVISION  FIVE  OF
 THIS  SECTION. EACH SUCH DISTRIBUTOR IS HEREBY REQUIRED TO FILE WITH THE
 BOARD, ON OR BEFORE EACH NOTIFICATION DATE, COPIES OF THE  NOTICES  SENT
 BY  HIM  OR HER TO ALL DELINQUENT RETAILER LICENSEES AS REQUIRED IN THIS
 SUBDIVISION, AND IN ADDITION, IF THE BOARD SHALL SO REQUIRE,  A  WRITTEN
 LIST  SETTING  FORTH  THE  NAMES  AND  ADDRESSES  OF ALL SUCH DELINQUENT
 RETAILERS. THE BOARD, IN ITS DISCRETION, MAY EXTEND  FOR  A  PERIOD  NOT
 EXCEEDING  THREE  DAYS  THE DATE FOR GIVING WRITTEN NOTICE OF DEFAULT TO
 DELINQUENT RETAILERS AND EXTEND FOR THREE DAYS THE DATE FOR FILING  WITH
 THE  BOARD THE COPIES OF NOTICES SENT TO SUCH RETAILERS AND/OR THE WRIT-
 TEN LIST OF DELINQUENT RETAILERS AS REQUIRED IN  THIS  SUBDIVISION.  THE
 BOARD,  IN  ITS DISCRETION, MAY LIMIT THE DOCUMENTS TO BE FILED TO THOSE
 RELATING TO RETAILERS WHO ARE TO BE ADDED OR DELETED  FROM  THE  DEFAULT
 LIST  AND DIRECT THAT THE DISTRIBUTOR SHALL MAINTAIN COPIES OF ALL OTHER
 DOCUMENTS REQUIRED UNDER THIS  SECTION  FOR  FUTURE  INSPECTION  BY  THE
 BOARD.  THE  BOARD SHALL, AS SOON AS PRACTICABLE AFTER EACH NOTIFICATION
 DATE, COMPILE AND PUBLISH AND FURNISH EACH DISTRIBUTOR  A  LIST,  TO  BE
 DESIGNATED  THE  DELINQUENT  LIST, CONTAINING THE NAMES AND ADDRESSES OF
 ALL RETAILERS WHO HAVE BEEN REPORTED BY  DISTRIBUTORS  PURSUANT  TO  THE
 PROVISIONS  OF THIS SECTION AS HAVING FAILED TO MAKE PAYMENT AS REQUIRED
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 BY THIS SECTION FOR CANNABIS PRODUCTS SOLD OR DELIVERED TO THEM, AND  NO
 SUCH  DISTRIBUTOR,  ON  OR AFTER THE FIFTH DAY AFTER THE RECEIPT OF SUCH
 DELINQUENT LIST, SHALL KNOWINGLY, WILLFULLY  OR  INTENTIONALLY  SELL  OR
 DELIVER ANY CANNABIS PRODUCTS TO ANY SUCH RETAILER WHOSE NAME APPEARS ON
 SUCH LIST, EXCEPT FOR CASH, UNTIL SUCH TIME AS THE NAME OF SUCH RETAILER
 IS  REMOVED THEREFROM, EXCEPT AS HEREINAFTER PERMITTED. THE RECEIPT OF A
 DELINQUENT LIST BY A DISTRIBUTOR SHALL CONSTITUTE KNOWLEDGE OF THE NAMES
 OF THE RETAILERS WHO HAVE FAILED TO MAKE PAYMENT FOR  CANNABIS  PRODUCTS
 AS  REQUIRED  BY  THIS SECTION. THE FAILURE OF ANY DISTRIBUTOR TO COMPLY
 WITH THE FOREGOING PROVISIONS OF THIS SECTION MAY, AT THE DISCRETION  OF
 THE BOARD, SUBJECT THE LICENSE OF SUCH DISTRIBUTOR TO SUSPENSION FOR NOT
 MORE THAN FIVE DAYS FOR THE FIRST OFFENSE, AND NOT MORE THAN THIRTY DAYS
 FOR  A  SUBSEQUENT OFFENSE. THE BOARD MAY PUBLISH THE DELINQUENT LIST ON
 ITS WEBSITE; PROVIDED, HOWEVER, THAT FULL ACCESS SHALL BE RESTRICTED  TO
 THOSE DISTRIBUTORS AND ACCESS TO THEIR SPECIFIC STATUS SHALL BE PROVIDED
 TO  RETAILERS.  SUCH  PUBLICATION SHALL BE CONSIDERED RECEIPT THEREOF BY
 ALL DISTRIBUTORS.
   4. IN THE EVENT THAT ANY DISPUTE SHALL EXIST BETWEEN  ANY  DISTRIBUTOR
 AND  A  RETAILER  TO  WHOM  HE OR SHE SHALL HAVE SOLD CANNABIS PRODUCTS,
 EITHER AS TO THE FACT OF PAYMENT OR AS TO THE AMOUNT DUE FOR SUCH CANNA-
 BIS PRODUCTS OR AS TO THE QUANTITY OF  THE  CANNABIS  PRODUCTS  SOLD  OR
 DELIVERED,  WHICH  DISPUTE CANNOT BE ADJUSTED BETWEEN THEM, THE BOARD IS
 HEREBY AUTHORIZED TO RECEIVE STATEMENTS FROM EACH OF THE PARTIES TO SUCH
 DISPUTE AS TO THE FACTS  AND  CIRCUMSTANCES  THEREOF  AND  TO  DETERMINE
 WHETHER OR NOT SUCH RETAILER'S NAME SHOULD BE PUBLISHED ON THE APPROPRI-
 ATE DELINQUENT LIST.
   5.  THE  BOARD IN THE CASE OF A RETAILER WHO HAS ACTUALLY MADE PAYMENT
 FOR CANNABIS PRODUCTS, OR ON GOOD CAUSE SHOWN TO IT, MAY PERMIT SALES OR
 DELIVERIES TO ANY RETAILER WHO HAS RECEIVED NOTICE OF DEFAULT OR WHO  IS
 NAMED  ON  ANY DELINQUENT LIST, ON TERMS OTHER THAN FOR CASH, BUT WITHIN
 THE LIMITATIONS OF THIS SECTION, PRIOR TO THE PUBLICATION  OF  THE  NEXT
 APPROPRIATE DELINQUENT LIST.
   6.  THE  LICENSE  OF ANY RETAILER WHO PURCHASES OR ACCEPTS DELIVERY OF
 CANNABIS PRODUCTS ON ANY TERMS, OTHER THAN AS PROVIDED IN THIS  SECTION,
 MAY  BE  SUSPENDED FOR NOT MORE THAN FIVE DAYS FOR THE FIRST OFFENSE AND
 NOT MORE THAN THIRTY DAYS FOR A SUBSEQUENT OFFENSE. THE FAILURE  OF  ANY
 SUCH  RETAILER TO PAY ANY AMOUNT IN DEFAULT BEFORE THE EXPIRATION OF THE
 PERIOD OF SUSPENSION SHALL BE DEEMED  AND  PUNISHABLE  AS  A  SUBSEQUENT
 OFFENSE  UNTIL PAID. IN ADDITION, THE BOARD MAY REQUIRE ANY SUCH RETAIL-
 ER, AFTER DEFAULT IN MAKING PAYMENT IN ACCORDANCE WITH THE PROVISIONS OF
 THIS SECTION TO MAKE PAYMENT IN CASH FOR CANNABIS PRODUCTS  SUBSEQUENTLY
 DELIVERED.
   7.  ALL  RETAILERS  WHO FAIL TO PAY DISTRIBUTORS FOR CANNABIS PRODUCTS
 SOLD OR DELIVERED TO SUCH RETAILERS BY SUCH DISTRIBUTORS  SUBSEQUENT  TO
 THE  EFFECTIVE DATE OF THIS SECTION, SHALL LIQUIDATE AND PAY SUCH UNPAID
 BALANCES TO SUCH DISTRIBUTORS IN EQUAL MONTHLY INSTALLMENTS OVER A PERI-
 OD OF THREE MONTHS FROM THE DATE UPON WHICH SUCH UNPAID BALANCES  BECOME
 DUE.   THE BOARD, SHALL NOT, HOWEVER, BECAUSE OF SUCH AN INDEBTEDNESS OR
 FAILURE TO PAY SUCH BALANCE REFUSE TO RENEW  THE  LICENSE  OF  ANY  SUCH
 LICENSEE.
   8. NOTHING HEREIN CONTAINED SHALL BE CONSTRUED TO REQUIRE ANY DISTRIB-
 UTOR  TO  EXTEND  CREDIT TO ANY RETAILER NOR TO RESTRAIN ANY DISTRIBUTOR
 FROM SEEKING TO ENFORCE BY LEGAL ACTION OR OTHERWISE, PAYMENT OF ANY SUM
 OR SUMS OF MONEY DUE OR ALLEGED TO BE DUE TO ANY  SUCH  DISTRIBUTOR  FOR
 CANNABIS PRODUCTS SOLD OR DELIVERED TO ANY SUCH RETAILER.
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   9.  THE  BOARD  IS  HEREBY  AUTHORIZED TO DO SUCH ACTS, PRESCRIBE SUCH
 FORMS AND MAKE SUCH RULES, REGULATIONS AND ORDERS AS IT MAY DEEM  NECES-
 SARY  OR  PROPER  FULLY  TO  EFFECTUATE  THE PROVISIONS OF THIS SECTION,
 INCLUDING BUT NOT LIMITED TO THE CHANGING OF ANY DATE ON WHICH  ANY  ACT
 OR  FUNCTION PURSUANT TO THIS SECTION IS TO BE PERFORMED BY ANY LICENSEE
 OR BY THE BOARD.
   10. FOR THE PURPOSE OF RAISING THE  MONEYS  NECESSARY  TO  DEFRAY  THE
 EXPENSES  INCURRED  IN  THE ADMINISTRATION OF THIS SECTION, ON OR BEFORE
 THE TENTH DAY AFTER THIS SECTION BECOMES A LAW, THERE SHALL BE  PAID  TO
 THE BOARD BY EACH DISTRIBUTOR LICENSED UNDER THIS CHAPTER TO SELL CANNA-
 BIS  PRODUCTS  TO  RETAILERS,  A SUM EQUIVALENT TO TEN PER CENTUM OF THE
 BIENNIAL LICENSE FEE PRESCRIBED BY THIS CHAPTER FOR EACH SUCH  LICENSEE.
 A  LIKE SUM SHALL BE PAID BY EACH PERSON HEREAFTER APPLYING FOR ANY SUCH
 LICENSE OR THE RENEWAL OF ANY SUCH LICENSE, AND SUCH SUM SHALL ACCOMPANY
 THE APPLICATION AND THE LICENSE FEE PRESCRIBED BY THIS CHAPTER FOR  SUCH
 LICENSE OR RENEWAL, AS THE CASE MAY BE.
   §  2. This act shall take effect January 1, 2023. Effective immediate-
 ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
 necessary  for  the implementation of this act on its effective date are
 authorized to be made and completed on or before such effective date.