The days of New York’s freewheeling marijuana gray market — with thousands of convenience stores, bodegas and smoke shops selling cannabis at will — appear to be numbered.
Gov. Kathy Hochul, flanked by Mayor Eric Adams and several other state officials, on Friday announced a new five-point plan to attack the unlicensed side of the cannabis trade, including new legal tools that were negotiated as part of the coming year’s state budget.
“We can finally put an end to the chaos that has permeated these neighborhoods,” Hochul said.
Although civil enforcement against many of the shops selling marijuana without proper licensure has been going on for more than a year, it has not been effective thus far, Hochul said.
“We hit these shops with a fine, hearings, and appeals, they drag on. Guess what? During that process, they stay open and haul in more and more cash, and everybody knows it. Right now, these fines are just a small cost of doing business in their minds,” the governor said.
“But you know what’s hard to factor into your business model? Having your front door padlocked for up to a year. You can appeal the fine, you’ll get your due process, but while the due process plays out, the padlock stays on.”
The padlock approach is the first step in Hochul’s plan. Once authorities verify that any shop is “selling products not tested or labeled in accordance with our laws … the padlock goes on immediately,” Hochul said.
The second step grants municipal and county governments new authority to create their own similar parallel laws to padlock illicit cannabis shops within their own jurisdictions, thereby broadening the enforcement manpower and resources across the state.
“Localities were stuck on the sideline in this fight. That ends right now. Now, they have the power to enforce,” Hochul said.
In New York City, Hochul said, the sheriff’s office will be engaged to deputize New York Police Department officers to help in padlocking illegal marijuana shops.
“See what we’re doing here? Bringing a lot of people out to say, the gig is up,” Hochul said. “It won’t just be the state coming after you.”
A third step, she said, is new power to revoke the liquor, tobacco, and lottery sales licenses of bodegas or other shops that are found to be selling illegal or unlicensed marijuana goods, particularly those smuggled in illegally from out of state.
The fourth step is to go after landlord with even more civil fines of up to $50,000 if they knowingly let shop tenants sell illicit cannabis, Hochul said.
The fifth and last part of the plan is a statewide task force, spearheaded by the state police, to help coordinate enforcement against the illegal market and to go about “busting up the pipeline of illegal cannabis coming in from other states.”
Beyond enforcement
Hochul also said that a “top priority” for her is getting more state marijuana business licenses issued so that the legal market can supplant the illegal one. Thus far, there are just over 100 legal cannabis shops operational in New York, contrasted with estimates of 2,000 or more illegal shops in New York City alone.
“That is a top priority of mine. We have a lot of catch up to do,” Hochul said of getting more cannabis licenses issued by the Cannabis Control Board.
The governor further emphasized that the new enforcement push is not — as some activists have feared — a return to the days of marijuana prohibition.
“These enforcement measures … go hand in hand with equity,” Hochul argued.
She asserted that justice-involved cannabis entrepreneurs and legal businesses are the most harmed by the illicit market.
“They’re the ones losing money,” she said.
Adams echoed that sentiment and said the new enforcement push is about supporting businesses that have tried to play by the rules.
“This is not a step backwards. This is a step forwards, to make sure we have legal cannabis shops,” Adams said. “Legalization is about following the law, not breaking the law.”
One of the few legal entrepreneurs who’s been able to open thus far — The Cannabis Place Dispensary CEO Osbert Orduña of Queens — said the new plan is “common sense.”
“The unchecked growth of unlicensed cannabis establishments and the unscrupulous landlords who enable them creates significant risk to our public safety, consumer health, and the integrity of the legal cannabis industry,” Orduña said.
Hochul said the new enforcement push is likely to begin as soon as the state budget is finalized by the legislature and then signed into law.
This article originally appeared in Green Market Report.
John Schroyer, Green Market Report , 2024-04-19 20:34:09
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