There are more than 1,200 unlicensed cannabis stores and one legal one in New York City
Following the legalization of cannabis in New York in 2021, at least 1,200 unlicensed businesses have reportedly popped up in New York City. Here’s what officials said they’re doing to ensure a healthy licensed market for consumers and operators.
Officials at a New York City Council meeting on Wednesday claimed that at least 1,200 unlicensed cannabis dispensaries, bodegas and smoking shops openly sell unregulated cannabis flower, edibles, vapes and tobacco products across the city.
So far, New York’s only licensed weed shop is the Manhattan-based nonprofit Housing Works, and dozens more promise to be rolling out this year. Although two more legal dispensaries are slated to open in the coming weeks (Smacked LLC at 144 Bleeker Street in Manhattan will open on January 24), unregulated cannabis stores continue to dominate the weed space by comparison.
In response to the disproportionate number of legal weed stores and the thriving gray market, the state said a newly formed task force will help even out the score after ending up with 100,000 products and $4 million in sales over the course of two weeks 53 stores were confiscated last year. In November, Leafly reported the first-ever raids in Brooklyn and Manhattan.
NYC Mayor Eric Adams established the interagency task force behind the raid in November last year. To date, the collaboration between the New York Sheriff’s Office, the Cannabis Bureau (OCM), the NYPD and other entities has seized approximately $10 million worth of illegal cannabis and tobacco products, according to figures released by the New York Sheriff’s Office and the NYPD shared on Wednesday.
How did the gray market flourish in New York?
In March 2021, the Marijuana Regulation and Taxation Act (MRTA) legalized possession and use of the plant, but did not offer legal retailers for non-medical consumers to shop from.
The law essentially opened up an 18-month green rush for vendors of all skill levels, including many corner and tobacconists, who had no prior experience sourcing or selling cannabis.
The state has made a clear distinction between these new illicit storefronts and longtime legacy sellers who either went out of business in hopes of obtaining a license or continued to operate discreetly without posing as licensed or regulated. As the gray market window closes, it’s not entirely clear how the state will differentiate the illegal operators it wants to shut down from the legacy operators looking to strengthen New York’s cannabis laws and regulators.
“New York City has a global opportunity to be a global center of excellence in the cannabis industry in terms of education and excellence,” New York Sheriff Anthony Miranda said at Wednesday’s meeting. “This administration will continue to support New Yorkers and those involved in the judiciary who seek to build legitimate and thriving cannabis businesses,” added Sheriff Miranda.
How the action on the gray market could affect consumers
During a visit to Housing Works on Wednesday, a security officer told Leafly that unsuspecting customers in illegal stores could be arrested if they were present while a store was blown up. Busts by Weed World Trucks in years past have drawn innocent bystanders and customers into chaotic investigations. Lawmakers and regulators have insisted they will not be tough on cannabis offenders and that they intend to use cannabis product seizures, fines and subpoenas instead of handcuffs and criminal charges. Tobacco violations could still result in arrests and heavier penalties.
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Sheriff Miranda also said the task force will investigate the people funding these deals, as well as New York’s many delivery services. Miranda and task force officials didn’t make clear during Wednesday’s meeting how they will distinguish legacy suppliers from illegal ones, but reiterated they only intend to close storefronts, not legacy growers or traders.
Robberies and violence are also a problem in unlicensed shops. According to officials, the money-heavy businesses face a constant threat of robberies, mostly from teenage robbers. The NYPD says there were 593 tobacco store robberies last year, compared with 343 in 2021, an increase of nearly 73 percent, the New York Times reported.
A smoking employee was shot in the leg Tuesday in Hell’s Kitchen and a separate unregulated Midtown store was robbed at gunpoint Wednesday, officials said.
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