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ALBANY, N.Y. — There are currently more illicit cannabis shops in operation than legal dispensaries in New York State.
Experts believe there are around 36,000 illegal shops currently operating across the state, while only 100 licensed cannabis dispensaries are in operation.
Many blame the slow roll-out of licenses for the creation of tens of thousands of illegal cannabis shops. At the same time, only 14 investigators are employed by the Office of Cannabis Management to look into these illicit operations.
During a hearing in October, Chris Alexander, OCM’s executive director, said that the office is making progress through partnerships with the State Department of Taxation and Finance and the State Attorney General’s Office to deter the illicit smoke shops, but asked for new legislation to increase penalties, claiming the $20,000 per day limit is not enough to deter some owners.
During the State of the State, Gov. Hochul’s office shared that OCM inspectors were dispatched to 381 illicit cannabis shops, a drop in the bucket of an estimated 36,000 in operation. Despite this fact, investigators seized over 11,800 pounds of illicit cannabis worth more than $57 million.
Gov. Hochul revealed Friday that initiatives to shut down illicit cannabis operations were pushed through as part of the Fiscal Year 2025 Enacted Budget. Most notably, the plan provides the Office of Cannabis Management and local municipalities the authority to padlock businesses immediately following an inspection if they are selling illicit cannabis and pose an imminent threat to health and safety.
Justifications for padlocking unlicensed businesses include:
- Sales to minors
- Unlicensed processing of cannabis
- Violent conduct
- Presence of unlawful firearms
- Proximity to schools, houses of worship or public youth facilities
- Products leading to illness or hospitalization
- Products not tested or labeled according to NY Law
In addition to expanding padlocking authority, the Budget establishes a misdemeanor penalty for damaging or removing a padlock.
Handing over more power to local municipalities, the budget allows counties and cities to adopt laws related to regulating unlicensed cannabis businesses as well as initiate emergency proceedings against both unlicensed businesses and landlords, through which they may collect penalties.
The local laws must ensure consistent enforcement mirroring the state’s process by requiring the establishment of procedures to conduct inspections, hearings and emergency padlocking of businesses.
To tackle the problem at its root, Hochul is launching a statewide task force to go after suppliers of illicit cannabis in the hopes it will prevent more illicit shops from popping up. Hochul promises through collaboration between the New York State Police and local law enforcement, the state will be equipped to tackle the full scope of illegal cannabis activity.
“Unlicensed dispensaries have littered New York neighborhoods, blatantly circumventing our laws and selling potentially dangerous products,” Hochul said. “Enough is enough. I promised to protect our communities and hard-working, legal cannabis licensees by expediting the closure of illicit storefronts. I’m proud to stand up and say we got it done.”
