Allowing Illegal Cannabis Sales in Space Is Grounds to Evict Convenience Store Tenant

What Happened: A tenant leased the ground-floor store in a building for use as “a first-class convenience shop doing business as ‘AM PM Market’.” Just over a year into the 10-year lease, the landlord’s property manager discovered that a company called Bing Bong was in possession of the space and that it was selling cannabis. The manager set about to gather evidence against Bing Bong, using his iPhone to take pictures of the store’s interior and exterior and purchasing marijuana cigarettes infused with hashish oil. However, he didn’t go as far as to smoke the cigarette or perform lab tests confirming that they did actually contain cannabis. The landlord then went to court to evict the tenant that signed the lease, with the manager serving as the chief witness.

Ruling: The New York court granted eviction.

Reasoning: As in just about all states, in New York, a tenant’s use of leased premises for an illegal trade, manufacture, or other business voids the lease and entitles the landlord to reenter the premises. Landlords have the burden of proving the illegal use, along with the tenant’s knowledge of it. There was plenty of evidence in this case that Bing Bong occupied the premises and marketed itself as a cannabis store, including:

• The manager’s testimony;
• The iPhone photos of cabinets of glass vials containing cigarettes soaking in hashish oil;
• The outside awning displaying an anthropomorphic marijuana leaf between the words “Bing Bong” alongside a gorilla resembling King Kong wearing a marijuana leaf with the word “cannabis” directly underneath; and
• The fact that neither the tenant nor Bing Bong were listed among the names of the 47 dispensaries licensed to sell cannabis in New York on the government’s website.

Without confirmation of the actual presence of cannabis, this evidence wouldn’t be enough to secure a criminal conviction where charges must be proven beyond a reasonable doubt. However, the court reasoned that it was more than enough to meet the burden of proof for voiding a lease on the basis of illegal activity. As for the tenant that signed the lease, while it might not have participated in the activity, Bing Bong’s mere presence in the space supported the inference that it was aware of what was going on.

• Gur Assoc. LLC v. Convenience on Eight Corp., 2024 N.Y. Misc. LEXIS 507, 2024 NY Slip Op 24031, 2024 WL 441056