Letitia James' Historic Case Ends With $15 Million Verdict

New York Attorney General Letitia James has secured a landmark $15.2 million judgment against a New York cannabis dispensary chain that sold products illegally at multiple locations in three counties.

David Tulley, owner of the unlicensed dispensary chain "I'm Stuck" and "Weed Warehouse," operated stores without a license in Cayuga, Oswego and Wayne counties and illegally sold cannabis to underage customers, according to a judgment issued on Thursday by New York Supreme Court Judge Richard Healy.

Tulley's fine includes $7 million in disgorgement, or paying back illegal profits made from selling cannabis without a license, in addition to $8.2 million in penalties for operating without a license and "ignoring repeated notices" from the Office of Cannabis Management (OCM) to stop operations.

As part of disgorgement, Tulley must forfeit 90 percent of his illicit earnings between February 11, 2022, and May 2, 2023, at each of his locations.

Other penalties include $10,000 per day for selling cannabis without a license, $20,000 per day for continuing unlicensed sales after receiving a notice of violation, a $5,000 penalty for removing the violation notice from his Lyons location, and $1,324.98 in costs incurred by James' office.

"These illegal and unlicensed stores are budding up throughout the state and are hurting our communities," James said in a statement on Thursday. "David Tulley is paying the $15 million price for his repeated illegal activity and will be permanently banned from the cannabis industry in New York. This punishment should serve as a clear warning for all unlicensed cannabis stores in the state: we will enforce the law and shut down your operations."

OCM, which in its own statement, described the largest penalty to date against an unlicensed cannabis retail business as "groundbreaking," said the judgment "delivers an unequivocal message to rogue operators that there is no sanctuary for illicit cannabis in New York State and [that] the ramifications will be impactful."

Tulley was fined based on operating two dispensaries in Auburn, one in Lyons, one in Ontario, one in Williamson, one in Macedon, and one in Pulaski.

He has reportedly balked at the fines, claiming he has "never ever" sold to minors. He plans to appeal.

"It's comical; it's dumb," Tulley said, according to Rochester ABC affiliate WHAM-TV. "No one has $15 million. What does it do for them? Other than let them go to every pot store and say, 'Oh, if you don't shut down you're going to be like Dave Tulley.'"

Tulley was on OCM's radar in early 2022 when he began receiving cease-and-desist letters from OCM for violations. In response, he purportedly described the operations as "consulting" businesses.

James' office reportedly conducted undercover investigations that revealed cannabis was being sold to minors with "deceptive" advertising practices, including an Easter egg hunt that offered cannabis products as prizes. Investigators became privy to instances of store clerks not including taxes in purchase prices.

In June and July 2023, OCM inspections resulted in the seizure of "significant quantities" of cannabis products. Tulley continued to operate and sell products, however, leading to the involvement of James' office to permanently close the locations.

"This significant fine sends a clear message to illicit operators that the State will vigorously enforce cannabis regulations to ensure the safety and integrity of the industry," Daniel Haughney, director of enforcement for OCM, said in a Thursday statement. "Our decisive action against unlawful activities demonstrates our commitment to protecting consumers and maintaining a level playing field for legitimate businesses. This is a pivotal moment for New York State, demonstrating our unwavering dedication to upholding the law and rooting out illegal operators from our communities. Your time in town is up."

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