{"id":64471,"date":"2023-05-03T07:00:00","date_gmt":"2023-05-03T15:00:00","guid":{"rendered":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2023\/05\/03\/new-york-initiates-clampdown-on-unlicensed-cannabis\/"},"modified":"2023-05-03T19:45:22","modified_gmt":"2023-05-04T03:45:22","slug":"new-york-initiates-clampdown-on-unlicensed-cannabis","status":"publish","type":"post","link":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2023\/05\/03\/new-york-initiates-clampdown-on-unlicensed-cannabis\/","title":{"rendered":"New York Initiates Clampdown on Unlicensed Cannabis"},"content":{"rendered":"<\/p>\n

The free-for-all in the cannabis market that has ensued since legalization in New York State two years ago has been dubbed the \u201cWild East.\u201d But with authorities long threatening a crackdown, there has been a sense of waiting for the proverbial other shoe to drop. Now, that boot is starting to come down.<\/p>\n

The Empire State Strikes Back\u00a0<\/strong><\/h4>\n

With the New York state budget typically weeks late at the end of April, Gov. Kathy Hochul\u00a0insisted on including<\/a>\u00a0one more measure in the package\u2014a\u00a0plan to target unlicensed cannabis shops<\/a>. She prevailed.\u00a0<\/p>\n

The\u00a0official statement<\/a>\u00a0on the April 27 deal included this bullet point: \u201cExpanding the enforcement powers of the Office of Cannabis Management and Department of Taxation and Finance to further grow the legal marketplace for cannabis, including levying fines on illegal retail operations and closing those shops down.\u201d\u00a0\u00a0Hochul\u2019s plan jacks up the fines for retail outlet violations\u2014$10,000 per day for illegal sales, and up to $200,000 if unlicensed cannabis is found in a store\u2019s inventory.\u00a0A crackdown had already been underway at the local level\u2014especially in New York City, where upwards of 1,400 unlicensed outlets are said to be operating.\u00a0<\/p>\n

At a\u00a0press conference<\/a>\u00a0back on December 15, New York City Mayor Eric Adams\u00a0announced<\/a>\u00a0the creation of a Cannabis NYC Interagency Enforcement Taskforce\u2014bringing together the\u00a0New York City Sheriff\u2019s Office<\/a>, the\u00a0NY Police Department and the state\u00a0Office of Cannabis Management<\/a>.\u00a0At a January 18 City Council hearing on the matter, NYC Sheriff Anthony Miranda\u00a0testified<\/a>\u00a0that \u201cteams will be dispatched to all five boroughs on different days of the week. We\u2019re conducting long-term and short-term investigations.\u201d\u00a0 In February, Adams\u2019 administration\u00a0announced<\/a>\u00a0a related effort in partnership with Manhattan District Attorney Alvin Bragg. In a first action, Bragg\u00a0sent letters<\/a>\u00a0to more than 400 landlords warning them to evict unlicensed cannabis outlets before marshals were sent in to do so.<\/p>\n

Raids Across Five Boroughs<\/strong><\/h4>\n

And there have indeed been results on the ground. The most recent shortly followed the unofficial international day of cannabis celebration, April 20\u2014which saw\u00a0joyous crowds<\/a>\u00a0happily and openly toking in the iconic Greenwich Village park, Washington Square, a de facto HQ for marijuana lovers. Four days later, the \u201cHappy 420\u201d balloons were still on display in the front window of the Myrtle Smoke Shop in Ridgewood, Queens, as investigators from the Task Force and cops from the 104th Precinct\u00a0swooped in<\/a>\u00a0for a raid. Two store clerks were arrested, and the outlet was slapped with 63 violations, totaling some $45,000 in fines.<\/p>\n

March 28 saw a major raid on Staten Island, with authorities\u00a0reporting the seizure<\/a>\u00a0of nearly 100 pounds of cannabis, as well as 69 \u201cmagic mushroom candy bars.\u201d\u00a0Staten Island\u2019s conservative District Attorney Michael E. McMahon apparently acted with local cops independent of the Task Force and took the opportunity to opine in a statement: \u201cNo one is na\u00efve enough to believe that these establishments are financially thriving exclusively from snacks and soda alone. Yet, with NYPD manpower at historic lows not seen in a generation and a toothless Office of Cannabis Management designed by idealistic and unrealistic legislators, a black market has been allowed to balloon across the five boroughs posing a threat not just to our children but to legitimate customers as well.\u201d\u00a0\u00a0He added\u00a0on Twitter<\/a>, with photos of the haul: \u201cUnlicensed shops selling illegal drugs & THC products are a stain on our communities & undercut law abiding businesses.\u201d<\/p>\n

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This week working w\/NYPD we executed search warrants at 2 smoke shops in Port Richmond & Great Kills, seizing 100 lbs of mushrooms, ecstasy + marijuana products. Unlicensed shops selling illegal drugs & THC products are a stain on our communities & undercut law abiding businesses pic.twitter.com\/zP8fLzX0Fw<\/a><\/p>\n

\u2014 Michael E. McMahon (@StatenIslandDA) March 30, 2023<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

On January 5, the Task Force\u00a0raided several smoke shops<\/a>\u00a0on Manhattan\u2019s Upper West Side, seizing more than $200,000 worth of \u201cunregulated THC vapes, edibles, untaxed cigarettes and flavored vapes.\u201d Some $16,000 in fines were issued to the offending outlets. City Council member (and former Manhattan borough president) Gale Brewer\u00a0boasted<\/a> that she \u201crode along\u201d for the raids.<\/p>\n

A December 14 raid on a mobile dispensary dubbed Beach Boyz Budz in the Queens neighborhood of Rockaway Beach similarly\u00a0became a politician platform<\/a>. Councilmember Joann Ariola was on hand as the two men operating the van were\u00a0arrested<\/a>\u2014charged with criminal sale of cannabis in the second and third degrees, and criminal possession in the third degree. \u201cCrime doesn\u2019t pay in District 32,\u201d said Ariola. \u201cThe owners of this unlicensed operation were thumbing their nose at local law enforcement for months as they peddled their goods.\u201d Queens District Attorney Melinda Katz added: \u201cStores, trucks and other outlets currently selling recreational marijuana are doing so illegally.\u201d<\/p>\n

This was just as the Task Force was beginning its work, and over the past two weeks, the Sheriff\u2019s Office had\u00a0announced<\/a>\u00a0more than 600 pounds of cannabis confiscated in raids on unlicensed outlets across the city\u2019s five boroughs. Gov. Hochul has also unveiled a \u201cWhy Buy Legal New York<\/a>\u201d media campaign to encourage New Yorkers to only purchase from licensed dispensaries\u2014emphasizing \u201cthe potential health risks associated with purchasing cannabis products from unlicensed businesses and why regulated cannabis products are safer.\u201d<\/p>\n

Is The Crackdown Itself Illegal?\u00a0<\/strong><\/h4>\n

However, there was a little glitch to the well-publicized crackdown, which unfortunately won little media coverage. The\u00a0New York City Deputy Sheriff\u2019s Benevolent Association<\/a>\u00a0on February 2\u00a0wrote a letter<\/a>\u00a0to\u00a0Corporation Counsel<\/a>, the mayor\u2019s legal office, demanding clarity on how the Sheriff\u2019s Office has authority to carry out cannabis raids.\u00a0\u201cWe\u2019ve been unable to find any legislation related to the inspection of unlicensed retail locations, or any cannabis legislation mentioning the Sheriff as an enforcement officer,\u201d\u00a0the letter<\/a>\u00a0stated.\u00a0\u00a0<\/p>\n

The Sheriff\u2019s Office, an arm of the city\u2019s\u00a0Department of Finance, is officially authorized to inspect stores that sell cigarettes or tobacco, to ensure compliance with tax and licensing requirements. The city regulations establishing its powers haven\u2019t been updated to include cannabis.<\/p>\n

There may be a much more fundamental legal catch at work, however. While\u00a0official press releases<\/a>\u00a0treat \u201cunlicensed\u201d and \u201cillegal\u201d as basically synonymous, many of the unlicensed dispensaries maintain that they\u2019re actually operating within the law\u2014parsing the meaning of the word \u201csale.\u201d If no profit is made on the cannabis transfer, and the real money is made on club membership fees, it\u2019s not a \u201csale\u201d under New York state law. Outlets operating on this model haven\u2019t been touched by the crackdown. The most prominent,\u00a0Empire Cannabis Clubs<\/a>, still\u00a0operates three locations<\/a>\u00a0around the city\u2014openly.\u00a0 A bill by Liz Kreuger, the same Manhattan state senator who shepherded through legalization in 2021, would close this \u201cloophole\u201d (a word rejected by the cannabis clubs). But it\u00a0hasn\u2019t passed<\/a>\u00a0yet.\u00a0Empire Cannabis also pledges that all its products are lab-tested, and that standards are being developed for the unlicensed sector\u2019s self-regulation.\u00a0<\/p>\n

Not Just Cops, But Also Robbers<\/strong><\/h4>\n

In addition to the pressure from law enforcement, New York\u2019s unlicensed cannabis operators face another challenge\u2014they\u2019re apparently being targeted by the city\u2019s increasingly audacious criminal element.\u00a0\u00a0<\/p>\n

On January 18, a worker was\u00a0shot in the leg<\/a>\u00a0in an attempted robbery of the Smoke City store on Ninth Ave. in Manhattan\u2019s Hell\u2019s Kitchen. Media reports were unclear on whether the establishment was selling cannabis or just pipes, papers and such. But it was only the most recent of three such incidents that month.\u00a0On January 4, an employee was\u00a0shot in the lower back<\/a>\u00a0and gravely injured during an attempted robbery of Exotic Convenience smoke shop on Manhattan\u2019s Lower East Side. The shop was apparently\u00a0selling bud and edibles<\/a>\u00a0as well as paraphernalia and is located on Clinton Street, a neighborhood hub\u00a0for unlicensed cannabis sales<\/a>.\u00a0And on January 11, the Rainbow Smoke Shop on Sixth Ave in Greenwich Village was the scene of stick-up by two robbers, one brandishing a handgun. Nobody was hurt, but the\u00a0duo got away<\/a>\u00a0with an estimated $1,800 in cannabis candy, and some $600 in cash.\u00a0<\/p>\n

Is Gov. Hochul Keeping Her Equity Pledge?\u00a0<\/strong><\/h4>\n

Meanwhile, the unfolding of the still very limited licensed market has also met with various controversies that are slowing things down. On one hand, advocates are accusing Gov. Hochul of betraying her promises on social equity in the licensed market. A little more than a year ago, Hochul\u00a0announced<\/a>\u00a0that those who had been impacted by a past cannabis-related criminal conviction in New York State would be the first to get retail licenses.\u00a0Yet the state\u2019s first licensed dispensary which opened December 29, at a primo location on Broadway and Astor Place in the East Village, is run by a nonprofit organization,\u00a0Housing Works<\/a>. It does indeed do good work, advocating for housing and healthcare for people living with HIV-AIDS. However, 28 holders of licenses slated for entrepreneurs with past pot convictions were still stuck in what\u00a0The City<\/a>\u00a0news site called a \u201cbureaucratic holding pattern.\u201d Specifically, the Office of Cannabis Management was\u00a0tweaking its regulations<\/a>\u00a0on what kind of storefronts they could lease\u2014and applicants complained about lack of communication and clarity.<\/p>\n

A month later, the\u00a0second licensed outlet<\/a>\u00a0opened on Bleecker Street, a main drag of Greenwich Village. Evocatively named Smacked! Village<\/a> owned by an African American man with a prior cannabis conviction, Roland Conner.\u00a0The Smacked! store is to receive support from the\u00a0Social Equity Cannabis Investment Fund<\/a>, a joint venture of the state\u00a0Dormitory Authority<\/a>\u00a0and private partner\u00a0Social Equity Impact Ventures LLC<\/a>. Among its leaders are former NBA star Chris Webber, tech entrepreneur Lavetta Willis and former city comptroller William Thompson. But the $200 million slated to support equity applicants statewide through the Fund has also been held up by bureaucratic inertia\u2014specifically, the pubic and private partners being\u00a0unable to reach final terms<\/a>.\u00a0\u00a0<\/p>\n

At the same time, plans to open a first dispensary in Harlem are being held up by a legal challenge brought by a neighborhood business alliance. The\u00a0125th Street Business District Management Association<\/a>\u00a0brought suit in state court on April 26,\u00a0seeking to block<\/a>\u00a0the opening of an outlet on West 125th Street, across from the historic\u00a0Apollo Theatre<\/a>\u2014Harlem\u2019s cultural heart. The challenge argues that the process regulators use to choose dispensary locations is improperly opaque.<\/p>\n

\u201cThis is a naked, intentional and bold attempt to avoid community opposition,\u201d the lawsuit charges. It argues that the 125th Street location is \u201cirredeemable,\u201d saying it would add to the crime, congestion and \u201copen drug use\u201d already upsetting merchants in the area.<\/p>\n

Brooklyn Back in The Game\u2014For Now<\/strong><\/h4>\n

In some good news for would-be entrepreneurs, the federal Court of Appeals for the Second Circuit in Manhattan on March 28\u00a0narrowed a temporary restraining order<\/a>\u00a0that had blocked licensed dispensaries from certain designated areas of New York state. The appeals court ruling allows dispensaries to finally open in Brooklyn, as well as the Mid-Hudson region, Central New York and Western New York (including the state\u2019s second city, Buffalo). The Finger Lakes region remains barred, for the moment.\u00a0This means 108 dispensary licenses in those\u00a0administrative regions<\/a>\u00a0no longer under the injunction may finally start to move ahead. But 18 licenses in the Finger Lakes\u00a0remain in legal limbo<\/a>.<\/p>\n

The case was\u00a0brought by a would-be entrepreneur<\/a>\u00a0with a past cannabis conviction in Michigan, who argued that New York\u2019s equity measures favoring those only with in-state convictions violate the US Constitution\u2019s interstate commerce clause. However, many smelled a ploy by out-of-state money to break into the Empire State\u2019s lucrative market\u2014even if it means undermining the state\u2019s equity program.<\/p>\n

And while this case remains pending, there are other legal challenges in the works. A group called the Coalition for Regulated & Safe Access to Cannabis\u00a0brought suit<\/a>\u00a0in state court on March 16 against the Office of Cannabis Management. The coalition represents large outfits already licensed in New York under the medical marijuana program and now seeking to enter the adult-use market. The complaint charges that the equity program is unconstitutional and contributes to \u201cneglect of the medical program.\u201d The coalition is calling on the state to immediately open licenses to the public at large\u2014with no priority for those impacted by past prohibition\u2014and to crack down on unlicensed operators.\u00a0<\/p>\n

As of now, there are only\u00a0nine licensed dispensaries<\/a>\u00a0operating statewide\u2014five in New York City (four in Manhattan and one in Queens), and one each in Albany, Schenectady, Binghamton and Ithaca. So, crackdown notwithstanding, the licensed sector still has a very long way to go to catch up with the unlicensed guerilla capitalists\u2014and the obstacles still abound.<\/p>\n

The post New York Initiates Clampdown on Unlicensed Cannabis<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n


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The free-for-all in the cannabis market that has ensued since legalization in New York State two years ago has been dubbed the \u201cWild East.\u201d But with authorities long threatening a crackdown, there has been a sense of waiting for the proverbial other shoe to drop. Now, that boot is startingContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":190,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[50,5486,90,6074,16228,208,593,16173,3629,3584,4166,16998,420,7029],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/64471"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/190"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=64471"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/64471\/revisions"}],"predecessor-version":[{"id":64472,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/64471\/revisions\/64472"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=64471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=64471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=64471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}