State lawmakers are considering how to curtail the sale of illegal cannabis in New York as part of the state budget negotiations, Assembly Speaker Carl Heastie said Monday.

The push to address illegal cannabis sales in New York has been brewing for the last several weeks in Albany as the legal market has struggled to expand amid court challenges and unlicensed sales.

"I think the issue is how do you shut down the illegal stores, so trying to come up for language for that to happen," Heastie said. "We want the legal cannabis industry to thrive so coming up with a mechanism for that to happen without overreaching is, I would say, the issue."

Heastie did not embrace Gov. Kathy Hochul's proposal for illegal sales, which would increase fines as well as expand enforcement powers by the Office of Cannabis Management as well as the state Department of Taxation and Finance to address illegal sales.

The Hochul-backed bill would allow cannabis regulators and state tax officials to enforce illegal cannabis activity. Violations of the law could lead to fines of $200,000 for illegal cannabis plants or products. Regulators would be allowed to fine a business $10,000 a day for selling cannabis without a license.

State lawmakers in recent weeks have also proposed changing the tax structure of cannabis sales in New York.

Lawmakers and then-Gov. Andrew Cuomo in 2021 approved a plan to legalize cannabis in New York, with regulators developing provisions to address retail sales. But illegal sales in parts of New York have continued in retail locations.

Hochul this month also announced a public service campaign urging New Yorkers to buy legal cannabis.