Illegal Smoke Shops Proliferating like Nail Parlors: NYC and NY State Cracking Down

Since marijuana was first legalized by the New York State Legislature in 2021, over 1,600 shops selling pot products without a license have popped up across New York City’s five boroughs.
With the number of legal cannabis slowly rising, both New York City and New York State officials increased their efforts in battling these unlicensed marijuana and tobacco shops on June 22. The New York City Council overwhelmingly voted 47 to 0 to fine landlords renting space to unlicensed marijuana and tobacco sellers. First New York City landlords will get a warning and then they will be hit with steep fines if they continue to rent to the illicit weed businesses.
Governor Kathy Hochul announced on June 22 the results of initial enforcement actions against unlicensed cannabis businesses led by the New York State’s Office of Cannabis Management (OCM) and Department of Taxation and Finance. “We can now conduct enforcement against businesses illegally selling cannabis, and I’m proud to report that in just the first three weeks of our efforts, we’ve seized nearly $11 million worth of illicit products off the streets,” Governor Hochul stated. “These unlicensed businesses violate our laws, put public health at risk, and undermine the legal cannabis market, and with the powerful new tools in our toolbelt we’re sending a clear and strong message: if you sell illegal cannabis in New York, you will be caught and you will be stopped.”

This New York State enforcement legislation was adopted as part of the budget and has authorized OCM to assess civil penalties against unlicensed cannabis businesses. The fines start at $10,000 per day and rise up to $20,000 per day for the most egregious conduct. The new law has also authorized the agency to seek a State court order to ultimately padlock businesses found to be in repeated violation of the law, among other penalties. In addition, the law makes it a crime to sell cannabis and cannabis products without a license.
New York State Assembly Majority Leader Crystal People-Stokes said “I am pleased to see OCM, the NYS Department of Taxation & Finance, and local law enforcement agencies finally able to address and shut down unlicensed and illegal dispensaries. These illicit shops endanger the public’s health, safety and well-being with untested, unregulated products but also confuse the public as they try to perpetrate their businesses and products as licensed and sanctioned even though they are not. These closures are necessary, and combined with continuing to open CAURD dispensaries, will allow New York’s legal cannabis market to reach its full potential.”
Brooklyn District Attorney Eric Gonzalez said, “I commend Governor Hochul for allocating these important civil enforcement resources to stop these unauthorized businesses, to help level the playing field, and to give law-abiding cannabis licensees a fair chance to thrive in the legal cannabis industry.”

The New York State Office of Cannabis Management granted 99 licenses in April and an additional 50 in May, and opened four dispensaries in the last month. John Kagia, the state cannabis office’s director of policy, recently told Crain’s New York that in the last month, New York City has been granted 16 licenses in Brooklyn and three in Manhattan. In addition, the state cannabis office initially planned to accept a max of 150 justice-related applicants, but the overwhelming number of qualified applicants led it to update this number to 300. It takes about six months to open a shop after a license is issued. This story was compiled of NYC and NYS press releases and news reports