In a stern warning to the cannabis industry, New York’s Attorney General Letitia James has levied a hefty $9.5 million fine against George West, owner of the unlicensed dispensary Jaydega 7.0 in Canandaigua. This significant penalty underscores the state’s commitment to regulating cannabis sales and ensuring public safety. The case highlights the severe consequences of operating without proper licensing and ignoring official closure orders.
Legal Proceedings: The Road to Judgment
George West, 33, finds himself at the center of a high-stakes legal battle following the discovery of 60 kilograms of cannabis at London Stansted Airport on September 2nd. West, a former player for Aberdeen, Queens Park Rangers, Arsenal, and Ipswich Town, continued to run his dispensary without a license despite multiple warnings from the Office of Cannabis Management (OCM).
Case Timeline:
- September 2, 2023: Authorities seize 60kg of cannabis from Jaydega 7.0 at Stansted Airport.
- September 18, 2023: West is arrested at his residence in Gourock near Glasgow.
- June 2023: OCM issues a closure order for West to cease operations.
- November 2023: Despite the order, West continues to operate, leading to further legal actions.
- October 26, 2024: New York Attorney General Letitia James announces the $9.5 million judgment against West.
Judge Christopher Morgan presided over the hearing at Chelmsford Crown Court, where West appeared via video link from HMP Durham. Alongside West, Rosie Rowland and Yasmin Piotrowska, aged 28 and 33 respectively, also face charges related to the smuggling plot. The defendants are scheduled to stand trial for up to seven days in May.
The Severity of Section 280E: Financial Implications for Cannabis Businesses
Section 280E of the Internal Revenue Code (IRC) plays a pivotal role in the financial operations of cannabis businesses. As long as cannabis remains a Schedule I substance under federal law, businesses involved in its sale are barred from deducting ordinary business expenses from their federal taxes.
Impact of Section 280E:
- Limited Deductions: Only the cost of goods sold (COGS) can be deducted, excluding other operational expenses.
- Higher Tax Liability: Businesses face significantly higher effective tax rates, often exceeding 70%, which impedes profitability.
- Operational Challenges: High tax burdens restrict reinvestment and growth opportunities, placing unlicensed businesses at a severe disadvantage.
The AICPA (American Institute of Certified Public Accountants) has advocated for the removal or modification of Section 280E, especially in light of potential cannabis rescheduling. By moving cannabis to Schedule III, these restrictions could be alleviated, allowing businesses to operate more sustainably and compete fairly within the market.
Enforcement Actions: A Statewide Crackdown on Illicit Cannabis Sales
The $9.5 million fine against George West is part of a broader enforcement strategy by New York state authorities aimed at curbing unlicensed cannabis sales. Earlier this year, Governor Kathy Hochul and NYC Mayor Eric Adams coordinated efforts to shut down over 1,000 illicit cannabis stores across the state, signaling a zero-tolerance approach towards illegal dispensaries.
Key Enforcement Measures:
- Joint Investigations: Collaborations between Police Scotland and the National Crime Agency (NCA) have been instrumental in identifying and dismantling smuggling networks.
- Seizures and Arrests: Rigorous inspections and intelligence-led operations have led to the seizure of significant quantities of cannabis and the arrest of key individuals involved.
- Public Safety Focus: Emphasis on the dangers posed by unlicensed dispensaries, including the lack of lab-tested products and untaxed sales, which can endanger consumers and distort the legal market.
These actions reflect the state’s determination to regulate the cannabis industry effectively, ensuring that only licensed businesses contribute to the economy while maintaining public safety standards.
The Cannabis Market Landscape in New York
Despite stringent regulations, the unlicensed cannabis market in New York remains substantial. The state continues to grapple with balancing legalization efforts with robust enforcement to eliminate illicit sales.
Market Statistics:
Metric | Value |
---|---|
Total Unlicensed Stores Shut Down | 1,000+ |
Cannabis Seized in West’s Case | 60kg |
Estimated Sales by Jaydega 7.0 | $2.4 million over 16 months |
Fine Imposed on West | $9.5 million |
Disgorged Profits | $1 million |
Penalties for Violations | $8.4 million |
These figures highlight the scale of unlicensed operations and the financial risks associated with non-compliance. The substantial fines and penalties serve as a deterrent, aiming to reduce the prevalence of illegal dispensaries and promote a lawful cannabis industry.
Preventive Measures for Cannabis Businesses
For entrepreneurs looking to enter the cannabis market, adherence to state regulations is crucial to avoid hefty fines and legal repercussions. Here are essential steps to ensure compliance:
- Obtain Proper Licensing: Ensure that all necessary permits and licenses from the Cannabis Control Board are secured before commencing operations.
- Regular Compliance Audits: Conduct internal audits to verify adherence to state laws and regulations, minimizing the risk of violations.
- Stay Informed on Legal Changes: Keep abreast of any amendments to cannabis laws and promptly adjust business practices to remain compliant.
- Engage Legal Counsel: Consult with legal experts specializing in cannabis law to navigate the complex regulatory landscape effectively.
By following these guidelines, cannabis businesses can operate legally, fostering trust with consumers and contributing positively to the economy.

Michael Brown is a seasoned journalist with a knack for uncovering compelling stories within the realm of cannabis. Through his investigative reporting and in-depth analysis, he sheds light on the regulatory challenges, market trends, and societal impacts of the burgeoning cannabis industry. Michael’s commitment to objective journalism and ethical reporting makes him a trusted voice in providing readers with balanced and informative articles about this rapidly evolving landscape.