Rosenberg & Estis Secures Win for Retail Landlord as Crackdown on Illegal Cannabis Shops Intensifies

Case highlights growing pressure on property owners to understand their obligations and rights

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NEW YORK, July 1, 2026 – As New York intensifies its crackdown on illegal cannabis retailers, Rosenberg & Estis, P.C. has secured a favorable judgment for a commercial landlord in a case that illustrates the growing challenges property owners face when state regulators target unlicensed cannabis activity. 

Members Devin Kosar and Ariel Bresky represented the owner of a commercial property after the New York State Office of Cannabis Management (OCM) determined that a tenant was allegedly operating an unlicensed cannabis business. State investigators issued a Notice of Violation, an Order to Cease Unlicensed Activity and an Order to Seal, shutting down the business and placing the landlord under strict deadlines to take action against the tenant. 

The case was brought under RPAPL § 715-a, a law that requires landlords to remove commercial tenants accused of selling cannabis without a license. If landlords fail to act, they can face penalties, legal costs and other consequences. 

After efforts to resolve the matter without judicial intervention proved unsuccessful, Rosenberg & Estis commenced eviction proceedings and ultimately prevailed at trial, securing possession of the premises on behalf of its client and obtaining an award of use and occupancy damages and attorneys’ fees.  

The outcome comes as enforcement activity across New York reaches new levels. Since the launch of the “Operation Padlock to Protect” enforcement initiative in 2024, nearly 1,400 illegal cannabis businesses have been sealed and $95 million in illicit products seized, according to the Office of the Mayor.  

“Section 715-a makes the property owner the State’s enforcement arm,” said Bresky. “The agency makes the determination, but the statute puts the burden on the landlord to bring the case and bear the cost. Our client never engaged in the conduct, but still had to prosecute its own tenant to judgment.” 

He warned that stepping back does not relieve the owner of cost or exposure. “Property owners can’t afford to ignore a notice from the OCM. If they don’t act, the state can step in and pursue the case itself, and the owner may end up paying the legal fees and costs. Responding quickly and working with regulators gives owners more control over the process and can help them avoid additional expenses.” 

According to Bresky, the result of the recent case reflects what the statute actually demands. “Many of these cases end up in court because tenants refuse to leave voluntarily. In those situations, the landlord has to take legal action and prove the allegations.” 

“Property owners need to know that these enforcement actions are becoming more common and that waiting to respond can be a costly mistake,” said Kosar. “They’re expected to act quickly, make difficult decisions, and navigate a process that is still evolving, and that’s why it’s critical to understand your rights and obligations before a problem arises.” 

Rosenberg & Estis advises commercial landlords to vet prospective tenants thoroughly, secure personal guarantees on commercial leases, and seek legal counsel immediately upon receiving notice from OCM or another enforcement agency. 

According to the New York State Office of Cannabis Management, enforcement actions against illicit operators have coincided with significant growth in the regulated market. In a recent announcement marking five years of the Marihuana Regulation and Taxation Act, Governor Kathy Hochul said New York’s cannabis market has generated $3.3 billion in total retail sales and expanded to more than 600 licensed dispensaries statewide. 

 

About Rosenberg & Estis, P.C. 

Founded in 1975, Rosenberg & Estis, P.C. is widely recognized as one of New York City’s preeminent real estate law firms. R&E provides full-service representation and advice in every aspect of real estate, from performing due diligence and evaluating financing, to handling joint ventures, acquisitions and leasing, construction and design team agreements, property tax exemptions and abatements, land use and zoning matters, Real Property Income & Expense (RPIE) filings, real estate tax certiorari, co-op and condo offering plan filings and board representation, distressed situations workouts, foreclosures and bankruptcies, trust and estate planning, as well as the litigations and negotiations which sometimes ensue when deal-making. R&E’s wealth of experience in New York real estate makes it the ideal partner for owners, developers, not-for-profit corporations, educational institutions, sponsors, equity investors and lenders in both real estate transactions and in all court venues.