Unregulated marijuana retailers are being punished in another state that has legalized weed. This time, it is lawmakers in Connecticut who are taking on the practice of “gifting,” through which illicit weed shops sell a product (say, a T-shirt) that comes with a cannabis “gift.”

Now, under a bill signed into law last week by the state’s Democratic Gov. That loophole may be closing under Ned Lamont.

According to Connecticut Post, cities in the state “can now fine residents up to $1,000 for gifting a cannabis plant or other cannabis-related product to another individual in exchange for any kind of donation, including an admission fee, or as part of any giveaway such as a swag bag,” while the state itself can “can also separately issue $1,000 fines for failing to pay sales taxes.”

“Gifting” has become a go-to practice for marijuana retailers who haven’t gone through the proper regulatory channels to obtain a license, or who operate in states where cannabis is legal for adults but the regulated market has not yet launched.

The Associated Press reported that unregulated “cannabis bazaars have cropped up [in Connecticut] since the drug was legalized last year,” and “[t]housands of people have attended the events, often paying a fee to be admitted, and exchanged cannabis-related products for other items or received them along with the purchase of an item such as a T-shirt.”

In New York, where adult-use cannabis has been legal since March of last year, regulators have targeted businesses that have purportedly taken part in “gifting,” warning them that the legal retail market does not officially begin until later this year.

In March, the New York Office of Cannabis Management issued cease-and-desist notices to several businesses that it believed were using this practice. It warned them that their chances of getting retail licences could be endangered if they continue to use it.

“New York State is building a legal, regulated cannabis market that will ensure products are tested and safe for consumers while providing opportunities for those from communities most impacted by the over-criminalization of the cannabis prohibition and illegal operations undermine our ability to do that. We encourage New Yorkers to not partake in illicit sales where products may not be safe and we will continue to work to ensure that New Yorkers have a pathway to sell legally in the new industry,” OCM executive director Chris Alexander said in a statement at the time.

And in Washington, D.C., where voters approved a ballot initiative legalizing recreational pot in 2014, medical cannabis suppliers have objected to the practice of “gifting,” arguing that the illicit businesses are hurting their own legal operations.

Despite cannabis’s legal status in the nation’s capital, weed sales remain illegal due to an ongoing Congressional ban on the commercialization of pot there. 

This bill was introduced earlier in the year to curb gifting in Connecticut.

Some cannabis industry owners supported the bill, while others opposed it. Gifting is a practice that has been defended by businesspeople.

“I do not deserve to be punished for this, nor does anyone else,” Justin Welch, a member of CT CannaWarriors and the New England Craft Cannabis Alliance, said in defense of the practice at the time of the bill’s introduction. “For too long now, good people have been persecuted for their involvement with cannabis. No matter what bill you pass, Connecticut’s grassroots cannabis community won’t disappear. Moving forward we need sensible cannabis policy that looks more like a craft beer policy.”