John SchroyerThe free-wheeling days of New York’s unlicensed cannabis market are numbered.
At least, that’s the message from Gov. Kathy Hochul, New York City Mayor Eric Adams, and the state police. State leaders gathered at a press conference Tuesday morning in Manhattan to talk about progress made since a new crackdown was launched in May, and they said more than 500 shops across the state have been closed down by city and state law enforcement officials.
“What we’re doing is going after the bad actors. At my direction, the state police have launched a cannabis enforcement task force, giving (the Office of Cannabis Management) the resources it needs, and we’ve been striving to reach our goal of shutting down the majority of these illegal stores in 90 days. They’ve been at it about a month now,” Hochul said.
The governor said that the task force had closed down 114 illegal shops and seized 3,200 pounds of cannabis products with a street value of $30 million.
Moments later, Adams announced that a New York City-specific crackdown dubbed Operation Padlock had closed down another 400 or so unlicensed smoke shops that were found to be selling marijuana and confiscated an additional $13.3 million in illegal cannabis goods, including edibles that he said were clearly being marketed towards children. He also said the city has issued $30 million in fines to illegal cannabis sellers.
“We’re talking over 500 in the state of New York,” Adams said of the illegal marijuana retailers shuttered over the past month. “That is real progress in the right direction.”
Hochul also pointed out that as a direct result of the crackdown, sales at legal licensed marijuana shops – which number just 134 so far – increased 27% from the first week of May to the first week of June.
“That means over $1 million in additional revenue, or $35,000 per store, in just one month. That makes a difference between staying open and closing. That means you can continue paying good wages to your workers,” Hochul said, addressing cannabis licenseholders. “You’re going to finally be able to live the dreams that have been delayed for too long.”
The crackdown likely has a long way yet to go, with estimates of unlicensed marijuana shops in New York reaching into the thousands. But Hochul and Adams said they’re determined to continue in order to replace the unlicensed market with a regulated one.
Some unlicensed operators, however, are fighting back against the efforts. Last week, a class action lawsuit was filed in federal court on behalf of 27 businesses alleging that the tactics violate the constitutional rights of shop owners.
