New York City Council members revealed on Wednesday that at least 1,200 unlicensed businesses are currently selling cannabis-related products, such as flowers, edibles, vapes, and tobacco. These establishments are operating without any regulation or oversight and pose a threat to citizens’ health.
New York has only had two licensed cannabis dispensaries, Housing Works in Manhattan, and Smacked LLC which opened yesterday. But this is set to change with one more on the horizon in the coming weeks and dozens more in the coming month. Nonetheless, there is still a notable contrast between the regulated and unregulated aspects of the cannabis industry in New York City.
In response to the disproportionately small number of legal weed stores and the thriving gray market, the state said a newly assembled task force will help even the score, after seizing 100,000 products and $4 million at 53 stores over the course of two weeks at the end of last year. In November, Leafly reported the very first raids in Brooklyn and Manhattan. The latest figures are $6 million in seized products, including 600 pounds of cannabis.
The New York City law enforcement agencies have been partnering up to crack down on illegal cannabis and tobacco products since Mayor Eric Adams established a task force in November of last year. So far, a joint effort between the NYC Sheriff’s Office, OCM (Office of Cannabis Management), NYPD and other units has resulted in approximately $10 million worth of seized goods.
The New York Gray Market
In 2021, the New York State Legislature passed the Marihuana Regulation and Taxation Act (MRTA). The act legalized the possession and consumption of cannabis in the state, yet there were still no legal outlets for non-medical consumers to purchase from. This opened an 18-month opportunity for individuals of all experience levels to get involved in selling cannabis, including corner stores, tobacco shops, and businesses with no previous knowledge of sourcing or retailing marijuana.
As New York State moves to establish a legal and regulated cannabis market, the state is taking steps to distinguish between newly established illicit storefronts and legacy sellers who stopped operations in hopes of becoming licensed. With the gray market slowly closing, it’s unclear how the state will differentiate between the illegal operators they aim to shut down and the existing legacy sellers they are trying to empower through their new cannabis laws and regulations.
“New York City has a global opportunity to be a global hub of cannabis industry excellence in education and excellence,” said New York City Sheriff Anthony Miranda at the Wednesday meeting. “This administration will continue to support New Yorkers and justice-involved individuals who want to build legitimate and thriving cannabis businesses,” Sheriff Miranda added.
The Gray Market Crackdown and its effects on Consumers
Unsuspecting customers at illicit shops could find themselves arrested if they’re present while a shop gets busted. Busts of Weed World trucks in previous years have wrangled innocent bystanders and customers into messy investigations. But lawmakers and regulators have insisted they will not be heavy-handed with cannabis offenders moving forward, and that they intend to use seizures of cannabis products, fines, and summons instead of handcuffs and criminal charges. Tobacco infractions could still lead to arrests and more serious criminal penalties.
Sheriff Miranda also said the task force will investigate the people who are funding these stores, as well as New York’s many delivery services. Miranda and task force representatives did not clarify how it will distinguish legacy delivery operators from illicit ones during Wednesday’s meeting but reiterated that it only wants to shut down storefronts, not legacy growers or dealers.
Robberies and violence are also a concern at unlicensed shops. The cash-heavy businesses face a constant threat of stick-ups, mainly from teenage robbers, according to officials. The NYPD says there were 593 smoke shop robberies last year compared to 343 in 2021, an increase of nearly 73 percent, according to the New York Times cannabis beat.