New York regulators are taking a page from California’s cannabis rules with the release of a new “verification tool.”
The tool, which will be a QR code posted in the window of legal shops and “available for licensees who are looking to jump start sales through delivery,” Gov. Kathy Hochul announced Thursday, is aimed at curbing unregulated sales in the state and city.
Hochul also announced that the “Why Buy Legal” public education campaign is coming in 2023, which will “discuss the risks of buying untested illicit products, and how those products undermine the goals of New York’s cannabis law to build the most equitable and inclusive cannabis market in the nation.” New Jersey Gov. Phil Murphy announced his participation in a similar public education effort in November.
“It’s critical for New York’s cannabis consumers to understand the risks of buying untested, illicit products and to have the tools to guide them to the safer, legal market that’s poised to open,” Hochul said in a statement on Thursday. “These tools will help to protect public health and strengthen our ability to deliver the equitable cannabis market our law envisions. We will continue to work with our partners in municipalities across the state to enforce the law and shutdown illicit operators who are selling products that put New Yorkers at risk.”
The push to support legal sellers comes as the first shops prepare to open their doors. One of the first is likely to be Housing Works. During a presentation before Community Board 2 in downtown Manhattan this week, Charles King, the chief executive officer of Housing Works, said they plan to open in NoHo, between Union Square and the East Village, on Dec. 29, as Cannabis Wire reported. However, much of the first phase of legal cannabis sales is expected to be by delivery.
The QR code is similar to the system set up in California, where, amidst a proliferation of unlicensed sales, the codes are now required to be posted at licensed retailers so that consumers can learn if they are considering a purchase at a regulated shop.
Calls are rising for enforcement against unregulated cannabis sellers. Some of the push is coming from state lawmakers and city lawmakers, while others are from New York residents and cannabis industry members.
On Thursday, New York City Mayor Eric Adams held a news conference focused specifically on laying out what city agencies are doing to combat unregulated cannabis sales.
“Today we’re saying to those who believe that this is going to become the wild, wild west of cannabis sales, we are saying clearly and loudly, no, it is not,” Adams said. “This work,” he added, has “really just started.”
New York City Sheriff Anthony Miranda said that in November, the city launched a two-week pilot task force that included the state’s Office of Cannabis Management, the city Sheriff’s Office, the NYC Department of Consumer and Worker Protection, and the New York City Police Department, “to address unlicensed businesses creating an ongoing public safety and public health crisis in many communities throughout the city.”
Members of the task force inspected 53 locations throughout the city, and seized more than 100,000 unregulated cannabis products and 600 pounds of cannabis worth more than $44 million, Miranda said, leading to 500 civil violations, and 66 criminal summons.
“Mayor Adams wants the task force to send a clear message to unlicensed businesses that their actions will not be tolerated and it would be necessary for them to comply with the state’s licensing laws,” Miranda said. “The Sheriff’s Office and all of our partners here today remain committed to protecting the legal cannabis industry and creating fair and equitable opportunities for legal dispensaries to succeed.”
Also this week, as Cannabis Wire reported, New York City Council Member Gale Brewer and New York Assembly Member Linda Rosenthal hosted a Cannabis Town Hall focused on unregulated sales.
Sen. Liz Krueger, one of two key authors of the Marihuana Regulation & Taxation Act, the state’s adult use law, introduced a bill to tackle the issue just before the legislative session ended for the summer. And while the bill made it out of the Senate, time ran out before the Assembly could act. She told Cannabis Wire in September that she plans to reintroduce the bill, which she wrote with the Office of Cannabis Management, in January.
Krueger’s bill would have made it a Class A misdemeanor for a “distributor of adult-use cannabis products or a retail seller of adult-use cannabis products to sell any such products while not registered to do so.”
Krueger, whose district includes a swath of the east side of Manhattan, said that she’s been “fairly outspoken for probably a year now on the importance of cracking down on the illegal shops and vans popping up all over the state.”
“I’m disturbed to see some people selling products that clearly are marketed to children, even though my law is explicit not to market to children, not to sell to people under 21, to know exactly what it is you’re selling and someone is buying,” Krueger told Cannabis Wire in September.
Meanwhile, industry groups are urging regulators to do more about unlicensed sales, which include pop up events, brick and mortar storefronts, and mobile vans and buses.
A group representing the northeast cannabis industry, including the New York Medical Cannabis Industry Association and the New Jersey Cannabis Trade Association, released a report in late November called “E.Coli, Heavy Metals, Copyright Infringement, and 100 Percent Failure Rate – A Look at New York City’s Illicit Cannabis Market.” It found that roughly 40% of the cannabis products tested from unlicensed sellers across New York City found contaminants like lead and salmonella.
Unlicensed sellers also pose unfair competition for the “justice-involved” individuals who will get the first crack at the expected billion dollar legal cannabis market in the Big Apple. Regulators approved 36 Conditional Adult Use Retail Dispensary (CAURD) licensees, 28 individuals and eight nonprofits, at the Nov. 21 Cannabis Control Board meeting, held in Harlem, as Cannabis Wire reported.
At the downtown Manhattan community board meeting during which Housing Works’ and The Doe Fund’s (both nonprofit CAURD license holders) cannabis plans were shared with the public, board member Carter Booth suggested that the community board draft a resolution “supporting efforts to enforce the rules.”
“The overall idea of enforcement is so important to the success of this program,” Booth continued. “And it’s going to take a while. If they don’t start the enforcement more aggressively, by the time we start getting other candidates for retail storefronts, it’s still going to be a challenge for them.”
This story has been updated with coverage from Mayor Eric Adams’ news conference.
