Correspondence between the New York City Council and Mayor Eric Adams’ administration raises questions about whether the city has been doing enough to shut down unlicensed cannabis shops.
After months of inquiring with Adams’ office about its enforcement efforts against the proliferation of unregulated cannabis shops, which has emerged as a public health and safety issue, the City Council finally got a detailed response in late July. However, the document, which Cannabis Wire obtained, shows that the city has “resolved” only 14 of the 47 court cases it has filed to close unlicensed shops. This represents only 1% of the more than 1,300 estimated unlicensed retailers.
According to the mayor’s office, as of July 25, five locations are under “closing orders,” seven locations have “vacated,” and two more have “settled with the tenant staying but with agreements to no longer sell cannabis.” More than a dozen of these shops were also selling psilocybin, the mayor’s office confirmed to Cannabis Wire.
Cannabis Wire asked the Adams administration about any specific plans in motion to improve that rate of resolution.
“We bring nuisance abatement cases against shops by having auxiliary NYPD officers conduct underage buys of cannabis products at unlicensed locations. These cases take time, and they are only one tool in our toolbox to enforce against unlicensed establishments,” an Adams spokesperson told Cannabis Wire.
The issue of unlicensed shops, while particularly severe in New York City, persists statewide, and it prompted Gov. Kathy Hochul to sign a bill in May to expand the enforcement powers of regulators and law enforcement, with a focus on landlords.
Soon, the tides could start turning more quickly for unregulated cannabis sellers, as the city has even more levers to pull on enforcement. This week, Councilmember Lynn Schulman applauded the enactment of Local Law 107 of 2023, which also targets building owners who “knowingly” rent to unregulated cannabis shops. These landlords could face up to $10,000 a day in fines.
“My recently enacted legislation, Intro 1001-B, will help shut down the illegal cannabis and smoke shops that have proliferated our city and created public health and safety hazards in our communities,” Schulman, Chair of the Council’s Health Committee and prime sponsor of the legislation, said in a statement. “This legislation is a game changer and adds another tool to the enforcement toolbox against these harmful businesses.”
Councilmember Gale Brewer, who sent a letter this week to the City’s Department of Health and Mental Hygiene, asking them to consider declaring a public health emergency over unregulated cannabis sales, has grown increasingly concerned about the unregulated shops that are located near schools.
“I feel frustrated,” Brewer told Cannabis Wire, referencing a lack of coordination between various agencies. Brewer described shops that were “raided,” but then immediately reopened. “I think I still have around 63 in my district.”
Today, there are 23 legal adult use retailers open in New York State, and legal challenges over the licensing process have slowed the rollout of legal adult use sales.
Three Council members – Brewer, Schulman, and Marjorie Velázquez – have been among the most vocal about unlicensed cannabis sales, and together hosted a joint hearing on the issue in January. They subsequently sent a long list of questions to the mayor’s office in April, asking for specifics about numbers of unlicensed shops, for example, and trademark infringement. The trio asked that Adams’ office meet a May 11 “due date” for a response.
By mid-July, with radio silence from the mayor’s office, Aaron Mendelsohn, director of the City Council’s Oversight & Investigations Division (OID), grew impatient, writing to say that the council will “consider utilizing all legal avenues to obtain this information” if they didn’t get a response within a week. It finally came on July 26.
Immediately, Kevin Frick, a lawyer with the City Council, flagged concerns with gaps in the response from Philip Banks, Deputy Mayor of New York City for Public Safety, as well as ongoing concerns about the Adams administration’s strategy with regard to unlicensed cannabis in the city.
“Despite serious delay, the Admin’s response provides new information and—mostly—answers questions directly. It clearly demonstrates that the Admin is significantly more knowledgeable and active on this issue than in 2022,” Frick wrote in email correspondence to Council members, which Cannabis Wire obtained. “But just as clearly demonstrates that no current City strategy can close shops fast enough to meaningfully address the problem.”
The city’s estimates of the numbers of unregulated shops vary, from 1,300-1,400 unlicensed cannabis stores citywide, up to 2,000.
Some officials suspect that the number of unregulated shops could be higher. Estimates were first shared with the public at a January hearing, as Cannabis Wire reported, during which New York City Sheriff Anthony Miranda also discussed a newly formed interdepartmental task force aimed at investigating complaints about unlicensed shops and enforcing the state’s cannabis rules.
In the list of questions that the City Council sent to the mayor, they asked whether the Sheriff’s Office Joint Compliance Task Force is in any way “prioritizing” enforcement against trademarks that could be particularly attractive to kids, like cartoon characters or favorite snacks, an ongoing problem that City Council members have specifically called out.
“Not at this time due to resource constraints at the DOF and Sheriff’s Office,” the Deputy Mayor wrote. As Cannabis Wire reported in an original survey of two Manhattan neighborhoods, unlicensed cannabis shops in New York City sell edible products that look like Skittles, the Wrigley Company-owned candy.
Cannabis Wire asked Adams if the Sheriff’s Office Joint Compliance Task Force is meeting regularly, and if so, when the Mayor’s Office was last updated on the task force’s work on unlicensed cannabis sales.
The task force “conducts regular inspections of unlicensed and illicit establishments, and frequently briefs the mayor on its ongoing work,” a spokesperson told Cannabis Wire, without specifics.
Meanwhile, Cannabis NYC, housed within the Department of Small Business Services (SBS) to “support the development of a thriving and equitable cannabis industry,” has started comparing prices of cannabis and products in legal versus unlicensed shops. Unregulated cannabis is not subject to the same requirements as regulated cannabis, like testing and taxes, and is therefore cheaper.
“Through store visits, online shopping and direct partnership with CAURD-licensed stores, Cannabis NYC is tracking pricing, product, and potency by category, both pre-tax and after-tax, with the intent to publish a preliminary comparative shopping summary report in the future,” Banks wrote in response to the City Council.
What else is ahead this fall? Brewer called for more transparency and coordination between agencies and departments.
“The number of people involved is dramatic,” Brewer said, referencing the Office of Cannabis Management, the Sheriff’s Department, the New York City Police Department, and the district attorney. “These are not people who usually work together, but they should.”
Velázquez also urged a more coordinated approach.
“This is a critical time for the cannabis industry, and we need to work along with it the mayor’s office as well the governor’s office to address the bad actors who are putting our communities at risk,” Velázquez told Cannabis Wire in a statement. “There are countless entrepreneurs eager to do business the right way but impacted by the negative actions of others. Only working in partnership with our colleagues in government and the New York Police Department to weed out those acting in bad faith can we grow the cannabis industry in New York City the right way.”
By the numbers:
• The City estimates there are 1,300-1,400 unregulated shops throughout the city.
• The Sheriff’s enforcement task force has completed 328 “compliance inspections” in the past eight months.
• As of late July, the City has filed 47 court cases to close shops. A total of 14 have been resolved.
• At least a dozen of the shops investigated were also selling psilocybin.
