New York’s gray market crackdown begins in Brooklyn with two arrests
A store called Big Chief is accused of selling illegal cannabis and tobacco products. With the state’s first pharmacy licenses expiring next week, this is just the beginning.
A raid in Bay Ridge, Brooklyn yesterday could signal the beginning of the end of New York’s gray market era and a transition to a fully licensed and regulated retail cannabis market.
The joint operation between the NYC Sheriff’s Office, Department of Consumer and Labor Protection, Office of Cannabis Management (OCM) and NYPD resulted in the arrest of two people accused of operating an illegal cannabis and tobacco store called Big Chief have a storefront on 4th Avenue and 74th Street in Bay Ridge.
“We are conducting joint operations for various violations of the law. Obviously this is a place where we have received many complaints from the neighborhood about the illegal sale of marijuana and a variety of other illegal products. vaping products, which are also illegal; E-cigarettes are also against the law. So we went and did an inspection. Then we confiscated all the property and made two arrests at that location today.”
New York Sheriff Anthony Miranda
Last month, FOX 5 NY visited Big Chief’s store. In their report, Big Chief’s owners said in front of cameras, “We’re not hiding anything.”
At the time, Tank Denory told FOX 5 reporters that he owned the store. Denory added that Big Chief has applied to the state for a pharmacy license and is awaiting feedback on his status. It’s not clear if the owners who spoke to FOX 5 last month are the same people arrested Wednesday.
An NYPD officer leads a man bound into police custody from the Big Chief smoking facility in Brooklyn. Authorities have not released the names of the two people arrested in Thursday’s raid. (LLN NYC)
Video of the raid, captured by LLN NYC, shows authorities in the NYPD, Sheriff’s Office and OCM equipment confiscating boxes and plastic bags from the store, including coveted products from non-government brands such as Jungle Boys and Alien Labs.
Last night Brooklyn City Council member Justin Brannan told FOX 5 NY the raid was justified. “If I sell untaxed cigarettes, it’s illegal. If I sell alcohol or serve alcohol or wine without an alcohol license, it is illegal. Right now (if) you retail recreational marijuana, it’s illegal,” Brannan said.
A wake-up call for the gray market
Big Chief Smoke Shop in Bay Ridge, Brooklyn, openly sold cannabis products after applying for a New York City dispensary license earlier this year. With Wednesday’s raid, the store became the first of many that the state promises to close as it prepares to issue its first pharmacy licenses and introduce a regulated retail market similar to models used by New York’s wine and liquor stores. (LLN NYC)
The raid is a wake-up call for many sellers and buyers across the state. Expect stronger and more widespread raids once the first pharmacy licenses are issued next week. The Office of Cannabis Management’s involvement and inter-agency coordination show that the Brooklyn operation was not just a one-off raid ordered by a local borough commissioner.
Damian Fagon, OCM’s chief equity officer, told FOX 5 NY last night that gray market sellers had received a fair warning that their actions would bar them from future licensing opportunities. “Unfortunately, that’s very short-sighted,” Fagon said of gray market operations like Big Chief.
“This industry is moving towards legality. towards regulation. It’s going to be a multi-billion dollar industry that they won’t be a part of because of the mistakes they’re making right now.”
Damian Fagon, New York Bureau of Cannabis Management
What happened to slaps?
In June, Mayor Adams told the crowd at the Javits Center that he didn’t want to be tough on the state’s burgeoning cash crop — New York expects to rake in $1.25 billion from legal weed over the next six years. He said he intends to give a warning and slap on the wrists to those who break the rules. In lieu of fines and arrests, he said he wants to help any unlicensed dealers take steps to establish legitimate cannabis businesses.
“‘Listen, you can’t do this,’ warn them,” Adams, a former NYPD cop, said of his plans to deal with unlicensed dealers.
Why does New York have a gray market?
In March 2021, New York legalized the possession and use of cannabis, but not its sale. In the year and in the intervening years since, state officials have largely looked the other way as a “grey market” of pot shops, trucks, and private clubs thrived to feed the state’s massive appetite for Mary Jane.
“I believe the location is known for selling the illegal cannabis that they are currently selling. They also sold a variety of other illegal products. It’s a danger to the community, isn’t it? When you start selling these products and have these areas that are attractive for both kids and regular residents as they walk around, nobody really wants that in their neighborhood.”
New York Sheriff Anthony Miranda
The Office of Cannabis Management has not responded to Leafly’s request for comment. This story will be updated as new details emerge.
Why is New York cracking down on gray market weed vendors?
In addition to unregulated cannabis products, New York officials said they also seized illegal tobacco products, including e-cigarettes and e-cigarettes, from Big Chief. (LLN NYC)
To decriminalize cannabis, it needs to be taxed and regulated like any other product.
The state’s first adult dispensaries will be announced Monday (November 21) at the Office of Cannabis Management (OCM) public board meeting. License applicants and potential investors have pressured the OCM to address the gray market more directly. CAURD applicants have told Leafly that the lack of regulation discourages serious investors and makes financial projections difficult to predict.
The next meeting of the OCM Board will also bring final regulations for the new market. The final rules will include a strict two-tier model that prohibits anyone who owns the global cannabis supply chain from investing in New York’s retail locations that will be designed to function like New York wine and liquor stores . As a result, stores cannot sell shelf space to the highest bidder.
The OCM believes this two-tier model will curate the best products for consumers and create a healthy, competitive marketplace free from undue bias.
Here’s what the New York Sheriff’s Office said about the cannabis raid
New York City Sheriff Anthony Miranda led the raid on the Big Chief cannabis store in Brooklyn. (LLN NYC)
“You have to obey the law and it is currently illegal to sell marijuana. It is not currently legal in upstate New York or New York City. So no one should do this… This is an illegal activity that is currently going on in many communities. We are following the mandate of both the mayor and the deputy mayor for public safety, which states that we must work with all other city authorities to address the issue together. It’s a public safety issue, and it’s also a public health issue. That these products they sell are not authorized, they are not controlled, they don’t know the quality of the product being sold or if it is being mixed with anything else that is endangering our communities.”
Antony Miranda. NYC Sheriff
What happens to the arrested people?
The NYC Sheriff said: “The investigation into the two individuals arrested inside continues. So we’re going to do background checks on both of them. We will also look at the financial records of this institution and ascertain the degree to which they have complied with the law.”
A raid on Staten Island earlier this month indicated as much. Although the Staten Island store only sold illegal tobacco products and no cannabis, the raid was also a collaboration between several state and city agencies who claim to be dealing with quality of life complaints from local residents.
In a statement to FOX 5 last month, the state Bureau of Cannabis Management said Big Chief and other gray market companies are breaking the law and that the bureau has begun investigating “unlicensed businesses in their communities.”
“Put simply, you need a license to sell cannabis in New York. If you don’t have one, you are not legally selling cannabis,” the office said in the statement. “The Office of Cannabis Management added that it is urging all illegal store operators, including stores pretending to be legitimate businesses, to stop selling cannabis products immediately or they risk additional consequences.”
Commenting on LLN NYC’s groundbreaking coverage of the story, a YouTube viewer named Spiro Panagiotakis quipped, “The ’90s were shouting: they want their pot raid back.” A new era of New York cannabis is officially underway. Do your best to stay out of the gray.