New York City is facing a growing problem with unlicensed cannabis dispensaries.
At least 1,200 of these stores are openly selling unregulated cannabis products, including flower, edibles, and vapes along with tobacco products.
Despite the state legalizing weed in March 2021. the first licensed store, Manhattan-based nonprofit Housing Works, opened at the end of December. Another recently opened, but only a few more are expected to open this year.
Thriving Gray Market in New York City
The legalization of cannabis opened up an 18-month green rush for sellers of all experience levels. This included many corner stores and tobacco shops with no prior recorded experience in selling weed.
The state has made a distinction between these illicit storefronts and legacy sellers who have either stopped operations in hopes of obtaining a license or continue to operate discreetly without posing as licensed.
As the gray market window closes, it is unclear how the state will distinguish between illicit operators and legacy operators it aims to empower.
Crackdown on Unlicensed Dispensaries
In response to the small number of legal weed stores and the thriving gray market, New York City Mayor Eric Adams created an inter-agency task force in November to crack down on unlicensed weed shops.
The task force, which includes the New York Sheriff’s office, cannabis office (OCM), NYPD, and other units, has seized approximately $10 million worth of unlicensed cannabis and tobacco products.
Impact on Consumers
Consumers at illicit shops risk being arrested if the shop is busted. Lawmakers and regulators have stated they will not be harsh with pot offenders.
NYC will use seizures of pot products, fines, and summons instead of aiming for arrests and criminal charges. However, infractions could still lead to citations, arrests and even criminal penalties.
Robberies and violence are also a concern at unlicensed shops. These cash-heavy businesses face a constant threat of stick-ups, mainly from teenage robbers. The NYPD reported 593 smoke shop robberies last year, an increase of nearly 73 percent from the previous year.
Investigations into Funders and Delivery Services
The task force will also investigate the people funding these stores and New York’s delivery services. The task force did not clarify how it will identify legacy delivery operators vs. illicit ones.
Officials aim to get rid of the dangers and risks posed by these illicit shops. The city does support licensed cannabis businesses.
New York City strives to create a healthy licensed cannabis market for users and operators. The NYC crackdown on unlicensed dispensaries not only continues but intensifies.
This week, the NYC Mayor’s office launched a major crackdown on illicit weed shops in the city.