Gov. Kathy Hochul wants to use the state budget process to address the proliferation of unregulated and illegal sales of cannabis that she worries could hinder the growth of the legal marketplace. 

Lawmakers and Hochul are working to finalize a budget this week, but the discussion surrounding enforcement of illegal cannabis in the state has created a snag in the budget negotiations with the spending plan now more than a month late. 

Hochul, speaking with reporters on Tuesday, said she wants to either take steps to shut down businesses that sell marijuana illegally or "get them on the path to legal activity."

"Number one, we're trying so hard to stand up a legal industry," she said. "This is not easy to do. But when you set up these businesses to fail already because of illegal competition, we have to take some dramatic steps now and give some enforcement tools to the proper agencies."

Hochul previously this year introduced a measure that would expand the enforcement powers of the state Office of Cannabis Management and the state Department of Taxation and Finance, as well as boost fines for illegal cannabis retail operations. 

"I'm optimistic we can use that window of the budget to make that happen," Hochul said. 

But the specifics can be tricky. Democrats who control the state Legislature could be hesitant to back legislation that is too punitive for stores. Assembly Speaker Carl Heasite on Monday said lawmakers were working through the details of a potential provision to do so in the budget, but did not want to "overreach" on enforcement.