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NYC City Council Pledges Action on Unsolicited Pot Shops

Civic leaders in New York City this week promised increased action to address the proliferation of unlicensed marijuana retailers, just weeks after regulated sales of adult-use cannabis began in the nation’s most populous city. Officials at the New York City Council meeting on Wednesday pledged to increase enforcement against illegal cannabis sellers and stated that state lawmakers are currently drafting new legislation for law enforcement to help shut down the illicit marijuana shops.

“We know there is an illegal cannabis store, van or street vendor on what seems like every block in New York,” Councilwoman Gale Brewer, chair of the Council’s Oversight and Investigations Committee, said during the hearing of the council’s Committee on Consumer and Worker Protection.

“The proliferation of cannabis retailers over the last 22 months has gone almost unchecked by the city and state,” she added in a statement quoted by the Daily News. “These illegal stores, it seems to me, suck up revenue that should be going to licensed dispensaries.”

Task Force Found 1200 Illicit Pot Shops New York City

Eric Adams, the New York City mayor launched an interagency pilot task force in December to tackle unlicensed retail outlets. The task force, which includes the Sheriff’s Office, the NYPD, the Department of Consumer and Worker Protection, and the Office of Cannabis Management, has identified at least 1,200 unlicensed marijuana shops in the city. Brewer said that an analysis by city council staff had revealed 11 unlicensed shops selling cannabis within a 10-block radius of the city’s first licensed retailer.

“The tidal wave of unlicensed sellers in the state’s largest market threatens to undermine – I’m afraid – the laudable effort” made by the state’s cannabis legalization law.” Brewer said.

At Wednesday’s hearing, officials with the city’s Sheriff’s Office, the NYPD, the Department of Health and other local agencies appeared to speak with council members about the number of unlicensed cannabis retailers setting up shop in the city. NYC Sheriff Anthony Miranda reported that approximately 600 pounds have been confiscated by the illegal shops, leading to criminal and civil prosecutions.

“The task force is continuing, our operations are increasing, we are doubling – if not tripling – the enforcement that we have,” Miranda said. “We want them to know the type of enforcement that’s going on so that they understand that we’re not going away.”

State Senator Promises New Legislation

State Senator Liz Krueger, who was the lead sponsor of New York’s cannabis legalization bill in the Senate, said during a public comment period that she understands the frustration caused by unlicensed retailers. She stated that the lawmakers will take additional enforcement action during the 2023 legislative session.

“We are going to be implementing new, expanded laws that give the state more tools, and our police departments and our sheriffs and our marshalls,” Krueger said, adding that the unlicensed shops are “harming the entire model that we’ve been trying to build and establish across the state.”

Elliot Choi is chief knowledge officer of Vicente Sederberg LLP’s cannabis and psychedelics legal firm Vicente Sederberg LLP. He stated that the legal market must address illegal dispensaries in order to be viable.

“There are costs that go into obtaining and maintaining a legal cannabis dispensary that illegal dispensaries are bypassing,” Choi wrote in an email to Chronic News. “It creates an unfair advantage since the illegal dispensaries can sell cannabis products cheaper, especially not collecting any taxes.”

Choi pointed out that illegal cannabis dealers pose a threat to unaware consumers.

“Many consumers mistakenly believe the illegal dispensaries are licensed and therefore, the products they are selling are safe,” said Choi. “But that isn’t the case as the illegal dispensaries are in many instances selling unregulated products that have been shown to be contaminated.”  

Mark Sims, president and CEO of cannabis goods company RIV Capital, agreed, noting that an investigative report examining products from illicit operators in New York last year showed that illicit products being sold had a 100% fail rate under the state’s cannabis testing standards and contained dangerous toxins including heavy metals and E.Coli.

“The report highlighted one of the primary reasons it is so important for state regulators to work with local government and law enforcement to shut down illicit operations,” Sims told Chronic News. “It’s great to see New York City Council and law enforcement take these public health concerns seriously, and we encourage state cannabis regulators to do more to assist with these efforts to shut down the illicit market. There is certainly more work to be done here to protect consumers – but this is a step in the right direction.”