NYC crackdown delivers benefits for Queens social equity cannabis shop

Terp Bros, located in the Astoria neighborhood of Queens in New York City, is already delivering profits less than one year after the social equity shop opened last October – and owner Jeremy Rivera has big hopes for the future.

He attributes much of that optimism to the state and city’s recent enforcement crackdown on unlicensed marijuana shops that had been undercutting his and other fully legal cannabis dispensaries. As of a month ago, New York City and the sheriff’s department said they’d closed almost 800 unlicensed shops. The state task force said it closed another 345 unlicensed cannabis stores in other parts of New York. And while the state task force’s mandate has expired, the city’s enforcement push – dubbed Operation Padlock – is still ongoing.

Gov. Kathy Hochul and regulators with the Office of Cannabis Management have repeatedly touted an increase in legal cannabis sales due to the crackdown, and Rivera said that sales surge has been very real, for not just him but arguably for everyone in the legal cannabis trade.

“We are doing a lot better than we anticipated,” Rivera said. “We are very thankful for what we’ve been seeing month after month, incremental growth, after the closures of the smoke shops. We’ve seen real jumps in the amount of new customers that have been coming in.

“It’s made a difference not only for me but every operator in legal cannabis, for the whole supply chain, from the processors and farmers … to the retailers,” Rivera said. “We are profitable … In the five boroughs, we’re in talks of being in that top five. I don’t know exactly where we’re at, but we’re doing pretty well.”

Building on the boost

Rivera also said his sense is that most of the unlicensed shops will probably stay closed, simply because the existing shop owners were largely taking advantage of cannabis decriminalization to sell marijuana for as long as they could before a real crackdown began. He doesn’t think New York City will face the same wac-a-mole problem that has plagued Los Angeles and other cities that have been dealing with entrenched illicit operators.

“In New York, a lot of these guys that are getting the fines, they’re getting the shops shut down, and they’re like, ah, we’ll just go back to being a grocery store or a convenience store,” Rivera said. “A lot of them don’t want to deal with the hassle, because they don’t love the plant.”

Now, instead of focusing on competing with the underground market, Rivera said his top concern is marketing.

“Exposure. Marketing. Growing the brand is more than just the cannabis dispensary, trying to get it embedded in peoples’ minds,” Rivera said, when asked what the top business hurdles are these days he’s facing.

Eventually, if the New York industry keeps growing at its current pace, Rivera said he’d like to pursue interstate expansion or perhaps acquisition deals within New York to build Terp Bros into a small chain and a bigger brand.

“I’m not bad at this. I’m new at it, but I’m not bad at it. I can really see myself expanding this brand,” Rivera said. “I would love to replicate that in other states that have social equity programs.”

For now, Rivera’s content to keep learning and improving Terp Bros and building on community reinvestment programs that his shop and other social equity entrepreneurs – such as Coss Marte’s Conbud – are now putting together. On Tuesday, for instance, Rivera said his staff and Marte’s have a paintball tournament scheduled, and over the weekend, it’s a pickleball tournament.

He’s also weighing a possible Halloween block party to celebrate Terp Bros’ one-year anniversary.

“Mad cool shit is happening. And it’s only the beginning,” Rivera said about New York’s growing legal cannabis footprint.