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Tuesday, February 28, 2023

Inside NYC law enforcement efforts to stamp out illegal pot shops

 The officers tore through the seedy smoke shop in the shadow of the George Washington Bridge, packing dozens of large plastic bags with evidence and hauling them off to a waiting NYPD van.

The portly worker behind the counter at 181 Convenience pleaded with the cops to let him off the hook, even as they turned over the store, methodically collecting, cataloguing and photographing.

“I’ve only been working here a week!” he told them. “I’m only doing my job.”

The dramatic daytime Monday raid seemed reminiscent of New York’s “bad old days.” But instead of taking out a heroin mill or busting up a cocaine ring, this special task force has been targeting the Big Apple’s latest scourge: illegal pot sellers.

Cannabis is big business in the wake of New York’s 2021 decision to legalize recreational pot. And there’s been a boom of shop owners illegally selling a variety of cannabis, edibles, vape products and cigarettes — even as the city ramps up efforts to stamp the black market out.

New York City Sheriff Anthony Miranda, who invited The Post to ride along with his deputies this week, testified during a January city council hearing that law enforcement is targeting more than 1,400 stores for suspected illegal activity.

The task force is part of the city’s effort to crack down on these illegal pot shops. But officials – including Mayor Eric Adams – have said the state law that legalized the drug has kneecapped their mission.

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An officer checks his rifle ahead of a raid on illegal smoke shops Monday.
The task force conducting the raids is led by the New York City Sheriff’s Office.
Matthew McDermott
An officer walking to his car ahead of a raid on illegal smoke shops Monday.
Police have been raiding illegal smoke shops to crack down on the sale of cannabis, untaxed cigarettes and other things.
Matthew McDermott
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The reflection of a police officer's face in a rear-view mirror.
The task force includes members of the NYPD and other city agencies.
Matthew McDermott
Police drive in a cruiser on the way to raid illegal smoke shops in Washington Heights.
City officials estimate that more than 1,400 illegal shops are operating in New York.
Matthew McDermott
An officer walks into 181 Convenience in Washington Heights.
Police hit two shops in Washington Heights on Monday morning and seized thousands in inventory.
Matthew McDermott
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There’s only three legal dispensaries in the city right now. But shady merchants can typically escape with a court summons and meager fines if caught.

“We go in. We do enforcement, and I think we can only do $250 fines,” Adams said last week. “And our police officers can’t take the necessary action.”

This has created a sense among the cops that no matter how many stores they hit in their twice-weekly blitzes, it’s not going to make much of a difference.

“You’ll see – we’ll wipe them out, seize everything they have, and the next day they’re open again,” said Det. Veronica Robles, an eight-year veteran of the city Sheriff’s Office who escorted The Post on Monday.

“They’re making a lot of money. We’ve actually heard from some owners that they take us into account as the cost of doing business.”

One infamous example of this is Jungle Boys, the illegal shop that operated across the street from City Hall despite landing on The Post’s front page and being raided several times.

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Police tear through a smoke shop selling illegal cannabis, cigarettes and other things.
Police hit two shops in Washington Heights on Monday and issued thousands of dollars in violations.
Matthew McDermott
Task force members at the door of one of the smoke shops.
The task force is part of the city’s effort to crack down on the illegal shops.
Matthew McDermott
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A bag is marked as evidence.
The NYPD then filed the evidence, which included illegally-sold cannabis products.
Matthew McDermott
An officer rifles through one of the shop's inventory.
City officials have been frustrated that they can only issue meager fines against the shop owners.
Matthew McDermott
Police put the illegal goods in large plastic bags.
Police rifled through the stores, looking for evidence and hauling it away in plastic bags.
Matthew McDermott
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“We’re not worried [about another raid]. If we were worried, we wouldn’t be selling this product,” a store staffer boasted to The Post.

On Monday, the store appeared shuttered, with a locked door and empty shelves. But the worker’s attitude proliferates among illegal sellers.

Miranda said the raids, which on Monday focused on spots near schools or houses of worship, are only the beginning.

“This is just the first phase,” Miranda said. “We’re going to be moving … into more extensive investigations, looking into their background, their taxes, where the money’s going and who’s funding these locations.”

Miranda’s office leads the task force, which includes members of the NYPD, the New York City Department of Consumer and Worker Protection and the New York State Office of Cannabis Management.

They hit stores throughout the five boroughs based on a review of complaints to 311, referrals from elected officials and internal intelligence reports.

“Everybody walking into the location has a particular authority of oversight and inspection, so we go in and inspect all the products on the shelves,” Miranda said.

Since its inception in November, the task force has inspected 142 sites and issued more than 285 violations worth more than $500,000 in fines. It’s also seized more than $8 million in illicit products.

In February alone, the group seized more than $262,000 in cannabis-related merchandise and $45,000 in untaxed cigarettes.

Still, street enforcement can only go so far.

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An officer walks down the street with evidence bags in both hands.
The Sheriff’s Office leads the task force, which focused on spots near schools and houses of worship on Monday.
Matthew McDermott
Officers go through store inventory during raids in Washington Heights.
Since its inception, the task force has inspected 142 sites and issued more than 285 violations worth more than $500,000 in fines.
Matthew McDermott
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A collection of bongs at one of the stores.
In February alone, the group seized more than $262,000 in cannabis-related merchandise and $45,000 in untaxed cigarettes.
Matthew McDermott
Officers talk to each other during a raid at an illegal smoke shop.
Despite minor fines criminal fines, the raids can get pricey for the shops when lost inventory and civil penalties are included.
Matthew McDermott
Police collect evidence at a smoke shop.
A Monday raid on Bavaro Smoke Shop on 181st Street netted police about $50,000 worth of illegally-sold merchandise.
Matthew McDermott
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Robles, the Sheriff’s Office detective, said a store can be shut down if it has three offenses. But the stores often find legal loopholes that let them reopen.

Earlier this month, Manhattan District Attorney Alvin Bragg warned hundreds of the illegal pot joints that he’s ready to start issuing eviction notices if tenants are found to be dealing illegal goods.

“It is time for the operation of unlicensed cannabis dispensaries to end,” Bragg said at a press conference. “They’ve been put on notice.”

During the raid on 181 Convenience – which is at 840 West 181st Street – cops said they seized about $73,000 worth of untaxed cigarettes, vape products, cannabis flower and THC edibles.

They also issued seven violations whose penalties will reach about $13,000.

“He’s definitely gonna get summonses,” Det. Sgt. Erin Markevitch said of the sullen store worker. “There’s a lot of edibles, a lot of flavored stuff, which he’ll get a decent amount of tickets for. There’s also cigarettes, which he doesn’t have a license for. This was all covered up when we walked in here – they hid it with a curtain. That’s another ticket. And also with the cannabis, they don’t have a license for this stuff. All those flavored vapes, you can’t have in the city, period.”

Later that day, a raid on Bavaro Smoke Shop on 181st Street netted police about $50,000 worth of the same merchandise. They also issued $17,500 worth of violations.

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Officers collect evidence during Monday's raids.
Earlier this month, Manhattan District Attorney Alvin Bragg said he’d issue eviction notices to illegal business.
Matthew McDermott
Officers collect evidence during Monday's raids in Washington Heights.
“They’ve been put on notice,” the DA said of the illegal smoke shops.
Matthew McDermott
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The Bavaro Smoke Shop in Washington Heights.
Bavaro’s was open the day after the raid, and was back to selling THC products.
Matthew McDermott
A collection of pipes and paraphernalia made to look like skulls.
Cops seized issued Bavaro’s about $13,000 worth of violations.
Matthew McDermott
A bag full of evidence seized from the smoke shops.
The colorful THC products are sometimes marketed to attract children, police have said.
Matthew McDermott
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“This is what we’re talking about,” Robles said, referencing the store’s litany of THC-laced candy and gummies. “A child will come in here and take this, thinking it’s a candy and it’s really not. And then they share it with their friends. That’s what causes the public safety problem.”

181 Convenience was closed Tuesday. Bongs and bowls lined the storefront’s shelves, but the gate was down and the shop was dark. An employee outside said he didn’t know when the store would reopen.

Meanwhile, Bavaro’s was selling THC products the next day.

“The state sells it, why can’t we sell it?” said Jamel Zak, an store employee. “It is what it is.”

https://nypost.com/2023/02/28/nyc-law-enforcement-raids-smoke-shops-selling-illegal-cannabis-other-products/

Previewing The Vote On ESG Investing, And A Debt Ceiling Update

 In his latest note, Stifel's chief Washington Policy Strategist Brian Gardner, discusses the potential overturn of a DOL rule regarding ESG investing, and also shares an update on the debt ceiling.

According to Gartnet, the ESG resolution is likely to pass the House and could pass the Senate, but President Biden is expected to veto the legislation and the DOL rule is likely to remain in place. Regarding the debt ceiling, it appears that budget options are limited.  These fiscal constraints create political risk for Speaker McCarthy.  This note also explores how the lack of options for budget cuts could lead to a political standoff and create market volatility this

His full note is below:

Vote on ESG Investing and Debt Ceiling Update

The House will consider legislation to overturn a DOL rule regarding ESG investing.  The resolution is likely to pass the House and could pass the Senate, but President Biden is expected to veto the legislation and the DOL rule is likely to remain in place.

Regarding the debt ceiling, it appears that budget options are limited.  These fiscal constraints create political risk for Speaker McCarthy.  This note explores how the lack of options for budget cuts could lead to a political standoff and create market volatility this summer.

ESG Vote

House Republicans are scheduled to vote on legislation that would block a Department of Labor (DOL) rule that permits fiduciaries to consider environmental, social, and governance (ESG) factors when making retirement investment decisions. The legislation in being considered under the Congressional Review Act (CRA), a mechanism through which Congress can overturn regulatory actions by federal agencies.  The significance of the CRA is that it allows the Senate to pass the legislation by a simple majority vote rather than by the typical 60-vote, super-majority threshold. 

The ESG-related bill is likely to pass the House and while the outcome in the Senate is unclear, the CRA procedure makes Senate passage more plausible than it would be under regular order.  However, even if the ESG bill passes both chambers of Congress, President Biden is expected to veto the resolution and the chances of Congress over-riding the president’s veto are remote.  The DOL rule is likely to remain in place for now.

Debt Ceiling/Budget Options

A recent Congressional Budget Office (CBO) report estimated that Treasury will exhaust its extraordinary measures to manage the debt ceiling (“X-date”) sometime between July and September.  Thus, Congress and the Biden administration are still months away from concluding a debt ceiling agreement.  However, the parameters of a potential deal are emerging, and it is becoming increasingly likely that a debt ceiling deal will be limited in scope. 

Key congressional Republicans have already acknowledged that Social Security and Medicare are off-the-table.  Those two programs combined with interest payments on the national debt account for approximately 71 percent of federal spending.  Congressional Republicans also seem committed to current levels of defense spending despite a loud minority within the party that seem to want defense cuts. Defense accounts for another 14 percent of federal spending which means that negotiations will focus on only 15 percent of federal spending.

Further underlining how difficult it will be to achieve large budget cuts, the Chairman of the House Budget Committee, Rep. Jody Arrington (R-TX) released a list of items to be considered during budget talks. Some of these cuts are one-time savings which others are spread over multiple years which further illustrates that limited amount of spending each party will be fighting over.

Chairman Arrington’s list includes:

  • Recapture unobligated COVID money ($100 billion)

  • Reinstating work requirements in welfare programs (“tens of billions”)

  • Reduce fraud in the Child Tax Credit (CTC) and SNAP (Food Stamp) Program ($70 billion).

  • Capping Obamacare subsidies at 400 percent of poverty and recovering overpayments ($65 billion).

  • Cancel some EPA programs from the Inflation Reduction Act ($27 billion for the EPA with no specific programmatic purpose and $60 billion for “environmental justice” programs).

  • End President Biden’s student loan initiatives – ($25 billion from ending loan repayment moratorium and $379 billion from prohibiting debt cancellation).

  • Rescind $3 billion for new USPS electric vehicles, $1 billion for “clean” garbage trucks, $3.4 billion for “regional greenways” and “tree planting,” and $5.6 billion for low emissions buses.

  • End approximately $281 billion in improper payments recently identified in a Government Accountability Office (GAO) report.

  • “Stop Woke-Waste” – Eliminate a series of program all of which appear to cost less than $5 million and some less than $1 million which in a $6 trillion-plus budget are mere rounding errors.

Although it appears the differences between Democrats and Republicans will be narrow, passing a debt ceiling bill through Congress will not be a slam dunk.  Democrats are likely to dig in to protect their favorite programs.  At the same time, some Republicans could vote against any bill that they think fails to cut spending enough.  The situation puts House Speaker Kevin McCarthy (R-CA) in a tenuous position.  Speaker McCarthy has a narrow majority (currently five votes) and a group within his party that might oppose any debt ceiling bill.  This, in turn, could force McCarthy to make concessions with Democrats which could undercut McCarthy’s standing among conservative Republicans.  Disgruntled conservative Republicans could force a vote on McCarthy’s speakership and while most Republicans would vote for McCarthy again, it is unclear that there would be enough Democrats to save him. 

Most House Republicans seem open to voting for a modest debt ceiling deal but without a unanimous vote by Republicans, it could be difficult for McCarthy to reach a deal with the White House and Democrats which is why financial markets could be volatile this summer as the X-date approaches.  Investors could start to discount a negative outcome on debt ceiling negotiations when the X-date becomes more certain (rather than the current estimate of a three-month window) and if headlines start to suggest that Congress might fail to raise the debt ceiling in a timely manner.

https://www.zerohedge.com/markets/previewing-vote-esg-investing-and-debt-ceiling-update

Cytokinetics: Complete Response Letter for Heart Failure Therapy Application

 Complete Response Letter States that GALACTIC-HF Alone Does not Establish Substantial Evidence of Effectiveness Sufficient for Approval

Company Expects to Request Meeting with FDA to Discuss Potential Next Steps

Cytokinetics to Host Conference Call and Webcast on March 1, 2023 at 8:30 am Eastern Time

Cytokinetics, Incorporated (Nasdaq: CYTK) today announced that the U.S. Food and Drug Administration (FDA) issued a Complete Response Letter (CRL) regarding the New Drug Application (NDA) for omecamtiv mecarbil, an investigational, selective, small molecule cardiac myosin activator, for the treatment of heart failure with reduced ejection fraction (HFrEF).

FDA communicated that GALACTIC-HF is not sufficiently persuasive to establish substantial evidence of effectiveness for reducing the risk of heart failure events and cardiovascular death in adults with chronic heart failure with reduced ejection fraction, in lieu of evidence from at least two adequate and well-controlled clinical investigations. FDA stated that results from an additional clinical trial of omecamtiv mecarbil are required to establish substantial evidence of effectiveness for the treatment of HFrEF, with benefits that outweigh the risks. GALACTIC-HF (Global Approach to Lowering Adverse Cardiac Outcomes Through Improving Contractility in Heart Failure) was a Phase 3 clinical trial of omecamtiv mecarbil that enrolled patients with HFrEF at risk of hospitalization and death, despite being treated with standard-of-care therapy.

Cytokinetics expects to request a meeting with FDA in order to understand FDA’s views regarding the CRL and what may be required to support potential approval of omecamtiv mecarbil. However, the Company has no plans to conduct an additional clinical trial of omecamtiv mecarbil and its focus remains on the development program for aficamten, the next-in-class cardiac myosin inhibitor, currently the subject of SEQUOIA-HCM, a Phase 3 clinical trial in patients with obstructive hypertrophic cardiomyopathy (HCM).

Cytokinetics will host a conference call tomorrow, March 1, 2023 at 8:30 AM Eastern Time that will be simultaneously webcast and can be accessed from the homepage and in the Investors & Media section of Cytokinetics’ website at www.cytokinetics.com. The live audio of the event can also be accessed by telephone by registering in advance at the following link: Omecamtiv Mecarbil Regulatory Update Call. Upon registration, participants will receive a dial-in number and a unique passcode to access the call.