New York Faces Challenges with Illicit Cannabis Shops

NEW YORK- New York’s legal cannabis market has faced significant hurdles since the state legalized adult use in March 2021. The market’s expansion has been stymied by numerous lawsuits and changes in leadership, contributing to a flourishing illicit market. Currently, illegal dispensaries significantly outnumber legal ones, complicating efforts to establish a regulated marketplace.

In response, some New York lawmakers, including Queens Community Board 9 Chairwoman Sherry Algredo, are advocating for a halt on the addition of new licensed cannabis shops until illegal operations are shut down. This stance comes amidst concerns from residents about the adverse effects of the proliferation of unlicensed dispensaries in their communities.

Governor Kathy Hochul has recently introduced initiatives aimed at shutting down these illicit operations, which involve empowering the Office of Cannabis Management and local municipalities with new authority to act against unlicensed shops. “Unlicensed dispensaries…selling potentially dangerous products,” Hochul stated, highlighting the risks to communities and legal businesses.

Despite these efforts, the challenge remains daunting. New York City alone is estimated to have about 2,000 illegal cannabis stores. The state continues to push forward, however, with the Cannabis Control Board approving over 400 total sites for adult-use cannabis in 2024 and recently passing a resolution to issue provisional licenses to expedite the legal market setup.

The approach of closing all illicit shops before opening new licensed ones has its critics, given the difficulty in effectively shutting down unlicensed operations, which often reopen shortly after being raided. Nonetheless, local officials like CB 9 District Manager James McClelland insist on resolving the illicit market issue before expanding the legal market further.