NEW YORK — New York’s efforts to curb the explosion of unlicensed weed shops have been largely ineffective due to a tangle of limited laws, agencies with overlapping responsibility and spotty enforcement, a Daily News investigation has found.
Despite high-profile actions, like Thursday’s 4/20 raid of a Midtown Weed World shop, the state and city have struggled to stem the proliferation of gray market shops that took root in the long period between the legalization of recreational marijuana in New York and the opening of the first cannabis dispensary in December 2022.
That’s not to say they haven’t tried. A city task force set up by Mayor Eric Adams in November to address the issue has issued about 150 criminal court summonses, 330 notices of violations from the Sheriff’s Office and more than $4 million in fines. District Attorney Alvin Bragg’s office has put 400 landlords on notice that they could be evicted.
But these efforts have been undermined by a number of issues — most notably that the state law that legalized cannabis doesn’t include significant enforcement provisions for unlicensed sellers. The city, for example, has cited weed trucks for selling food illegally and shops for selling to minors, but cannot tackle the problem directly. NYPD at the Weed World raid made two arrests — they weren’t for selling weed, but for weapons possession.
Moreover, post-pandemic pressure to keep landlords’ spots occupied and a fear of returning to a war on drugs make experts skeptical that the shops will ever go away, or that enforcement will fully wipe the city clean of the shops. Instead, experts call the efforts “scare tactics” for shop owners.
Even as Gov. Kathy Hochul is proposing new “get tough” legislation, state lawmakers are walking a fine line between attempting to tamp down the problem and supporting a complex, fraught industry as the city emerges from a devastating pandemic.
“Somehow we arrested millions and millions of people for cannabis in my lifetime,” Jeffery Hoffman, a cannabis lawyer, said. “And now all of a sudden we can’t do anything about illegal stores and landlords leasing? I just don’t understand that. What does that mean? It’s a joke.”
State law: No teeth
The tidal wave of unlicensed smoke shops came after cannabis was legalized in March 2021.
Shortly after legalization, they started springing up: on blocks, across from schools, next door to each other, near City Hall. According to the state Office of Cannabis Management, not a single one of them – save the five that are currently opening in NYC with OCM-granted licenses – are legal.
Opportunists and entrepreneurs saw a chance to build profitable businesses selling weed.
But residents and elected officials across the city say the shops are crime magnets, eyesores and that they market towards children.
“I’m getting complaints, mostly people are parents walking by with their kids,” said Gale Brewer, a City councilwoman who represents the Upper West Side. “The names [of the shops] are very focused on children, some of them are close to the schools. They’re within the legal school zone, which, that’s just egregious.”
The efforts to slow the spread of these shops has unfolded along three fronts: The state’s Cannabis Control Board, a city task force headed up by the Sheriff’s department and an effort spearheaded by Manhattan District Attorney Alvin Bragg that targets landlords.
The state’s Cannabis Law put the job of enforcement into the hands of the Cannabis Control Board, which is the oversight body of the Office of Cannabis Management. Possessing more than three ounces of pot isn’t legal, according to state law. The shops can only be hit with court summons and small fines.
But there is no penalty in that law for an unlicensed store that displays cannabis for sale, and no law that directly targets unlicensed sellers.
The state’s role, to this point, has largely been limited to putting unlicensed weed shops on notice. Last February, OCM sent 66 cease-and-desist letters to shops across the state, with 15 in NYC. In the letter, Chris Alexander, executive director of OCM, said the stores were violating state cannabis law by selling without a license, in addition to “breaking state tax and several municipal laws.”
Recipients of the letters included a store owner in Ithaca who said her business had no dealings with cannabis and was wrongly sent a letter, Weed World, whose owner told Gothamist that they never received the letter and Empire Cannabis Club, who said they were following the letter of the Cannabis Law by operating a club model where customers are “gifted” cannabis.
OCM continues to issue the letters. To date, it’s issued over 200. It’s unclear if the campaign has had much impact.
“Once served, these operators cannot claim they were unaware that their business was considered illegal by the state, and we know of several locations that have ceased unlicensed cannabis sales after a letter was issued,” Gheitlman said. “We also know other recipients have not ceased such sales, and that calls for stronger, more effective enforcement tools that don’t currently exist in the Cannabis Law.”
The city’s quandary
The lack of clear and significant penalties for selling weed without a license has hampered efforts at the city level to curb the growth of the unregulated weed market.
When city agencies go after unlicensed smoke shops, they don’t officially go after them for selling cannabis — but for selling to underage consumers, selling tobacco products without a proper license or for other violations. A sweep targeting weed trucks in Midtown cited a number of them for selling food without the proper licenses.
“Anybody who has been actually arrested on an enforcement raid was arrested because of an outstanding warrant for an unrelated matter, so they happen to be somebody who was working at a smoke shop, and then the smoke shop got raided, and they got swept up in that and because of an outstanding warrant,” Paula Collins, a cannabis lawyer, said.
The city formed a task force to crack down on the shops in November, marking the first serious city-driven crackdown. It came after the Daily News reported on the proliferation of smoke shops in both the Upper West Side and Chelsea and after elected officials spoke out. The task force is made up of the Sheriff’s Office, the Department of Consumer and Worker Protection, or DCWP, OCM and the NYPD.
Adams, Sheriff Anthony Miranda and other city officials hosted a press conference last year to announce the newly formed task force had seized 600 pounds of weed and issued more than 500 court summonses over a two-week pilot in late November and early December.
“To those who believe that this is going to become the wild, wild west of cannabis sales, we are saying clearly and loudly: No, it’s not,” Adams proclaimed.
Most are carried out under the legal umbrella of inspecting stores where tobacco products are sold, but then they seize any evidence of illegal activity — like cannabis products in amounts over the legal limit — found while doing so.
Miranda testified at a City Council oversight hearing on the unlicensed shops in January that the weed enforcement task force was still hard at work and had identified more than 1,200 locations it planned to inspect.
This year to date, the task force has inspected just 162 shops, arrested 46 people and seized products worth about $6.7 million. In total, including the initial crackdown, there have been 73 criminal court summonses, 249 notices of violations from the Sheriff’s Office, an additional, separately issued 126 notice of violations from DCWP, and fines totaling $2.6 million.
But the actual effect on the proliferation of weed shops is difficult to gauge. Critics of the city’s efforts are quick to point out the limited scale and the not-so-lasting impact. The 235 shops that have been inspected in total are just a fraction of the estimated more than 1,600 shops in the city.
Plus, they said, raids have little impact even at the shops that do get hit.
“The sheriff’s efforts, while laudable, have not led to closures, because the fines they levy and the products they seize — that’s just considered the cost of doing business for these very lucrative stories,” Manhattan Borough President Mark Levine said. “And they’re often open as soon as the next day.”
Targeting landlords
In February, Adams and Bragg announced a new strategy: Go after the landlords.
The Manhattan DA’s office said they mailed letters to every one of the 400 known smoke shops in Manhattan, warning them of the potential for eviction proceedings. The policy makes use of a decades-old nuisance abatement law.
“It’s time for the operation of unlicensed cannabis dispensaries to end. Just as we don’t allow endless unlicensed bars and liquor stores to open on every corner, we cannot allow that for cannabis,” Bragg said at the time.
The city sued four unlicensed cannabis shops on the Lower East Side, attempting to shut them down under the nuisance abatement law — at each of the four shops, an underage police officer had been able to buy cannabis.
Of the four nuisance abatement cases, only one, Runtz Tobacco, 14 1st Ave, is closed.
Tommy Materazzi owner of Sogie Exotics & Smokes Shop, another one of the four shops that was targeted, said he had to go to court and pay a fine that was “in the thousands” of dollars. The shop has been there for two and a half years, according to Materazzi, and the fine wasn’t enough to threaten his business.
The other two stores, Broadway, at 736 Broadway, and Saint Marks Convenience & Smoke Shop, at 103 St. Marks Place, were up and running this month week in visits by The News.
“It’s not a quick process, but there are some early signs that it’s going to have an impact,” Levine said of the DA’s landlord crackdown. “I’m more optimistic about that.”
The damage done
Brewer conducted a walkthrough of the Upper West Side and found her neighborhood has more than 60 shops in a 50-block section.
“It’s a huge problem for several reasons,” she said. “First, we’re trying to build a regulated cannabis industry that will bring in significant tax revenue for the city and state, that will achieve equity goals to put economic power in the hands of people who were harmed by the criminalization of marijuana. And it’s not going to succeed if [these shops are shut down].”
“They sell to minors, they frequently sell to kids, with packaging that appeals to children … they are heavily cash reliant businesses, so they’re magnets for robberies, and there’s been a few that have been very problematic.”
Levine referenced one smoke shop on Lenox Ave. and 126th St. in Harlem, where a man was killed in an execution-style murder on Easter Sunday.
“They’re examples of the fact that we’re in this in between stage with defacto legalization without legalized sales, so they’re filling in a big gap,” he said. “It’s also important that we accelerate the rollout of legal dispensaries, otherwise it’s a huge gap and so much tax revenue is lost.”
As legal retail locations have slowly started to launch, license holders and dispensary owners told the Daily News they worry the unlicensed shops will detract from their business.
“They [the state] gave me certain assurances that that will not be the case,” said Carl Anderson III, a dispensary license holder in the Bronx. “But I’m not really sure how they’re tackling it. … You have the city’s support, you have the mayor’s support, the commissioner – they’re all going to be making a substantial effort in closing some of these shops down, but you see them close, then you see them open right back up.”
It seems like the stores are reaping all the benefits of selling weed without going through the same legal hurdles, Anderson said. He’s still proud to be among the first licensees — but is nervous about his business.
“What’s the real advantage to having the license and do medical testing? … It’s been out there for so long without medical testing. What’s the risk that people will think they’re taking?”
Finding the balance
Scars left on the city both from the pandemic and historical racial injustice have made the problem of illicit smoke shops especially hard to balance.
Post-pandemic vacant storefronts and glacial economic recovery were a problem for landlords — and cannabis was in hot demand.
“We’ve just come out of a pandemic,” Collins, a cannabis lawyer, said. “Landlords are desperate. They’re not really vetting their clients … It’s kind of like whoever shows up willing to pay the rent, that’s who gets the keys to the door.”
Last month, Gov. Kathy Hochul proposed a controversial new bill aimed at regulating the cannabis market by fining people up to $150,000 for possessing unlicensed, untaxed weed, and up to $200,000 for selling it. The bill also would introduce new Class E felonies for disregarding tax law.
Zissou said Hochul’s proposal was “nonsensical” and if put into place, would effectively restart the war on drugs.
“No Democrat is going to vote for a cannabis crime bill and go back to Rockefeller days,” Zissou said, referencing the Rockefeller drug laws, 1970s tough-on-crime laws that put low-level offenders behind bars.
Collins said elected officials want to show they’re taking action — but that they don’t want to take the political risk of a harsh crackdown, which she acknowledges sounds like a contradiction.
“Of course it is,” Collins said. “They’ve got to answer to the community boards. They’ve got to answer to Liz Krueger. They’ve got to answer to a couple of other people who have been really vocal about the problem of the shops, and the problem of underage sales, and the problem of the proximity of the shops to schools and churches.”
The city needs to tread lightly, she said, emphasizing that enforcement hasn’t worked now and hasn’t worked in the past.
“The city long ago made a decision to not prosecute for marijuana, and so I think they don’t want the optics of leading people out or shutting down the shops that are mostly run by, I mean there are exceptions, but primarily the owners of the shops are immigrants or black and brown people.”
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