Three northeast cannabis industry groups released a report on Wednesday to shine a light on contaminants in unregulated products sold in New York.
These groups had products tested from 20 unlicensed sellers, like Empire Cannabis Club and WeedWorld, two entities that received cease and desist letters from regulators over the summer, and lesser-known unlicensed sellers, too. The results showed that about 40% of the products contained contaminants like E.Coli, lead, and salmonella, the groups said.
(Cannabis Wire requested certificates of analysis from the lab tests and will update this story if the groups provide them.)
A refresher: in March 2021, New York lawmakers passed the Marijuana Regulation and Taxation Act (MRTA), which created a framework for taxed and regulated cannabis sales for adults aged 21 and older. Regulators have spent much of 2022 building out a regulatory system, and draft regulations for the adult use industry are now open for public comment, as Cannabis Wire recently reported.
Today, while regulators are targeting the end of 2022 for the first legal adult use sales, no adult use cannabis shops have yet been approved to open. But that hasn’t stopped a proliferation of sales from unlicensed brick and mortar stores, delivery services, and food truck style vehicles across New York State, with a particular concentration in New York City. This means that entities aiming to legally enter the adult use industry now l have to compete with unregulated operators who are able to sell cheaper products because they’re untaxed and untested.
It’s in this environment that the three northeast industry groups released their report, titled “E.Coli, Heavy Metals, Copyright Infringement, and 100 Percent Failure Rate – A Look at New York City’s Illicit Cannabis Market.”
The group also held a virtual briefing. Speakers included Ngiste Abebe, president of the New York Medical Cannabis Industry Association and vice president of public policy for Columbia Care (a medical cannabis license holder in New York, also known as a Registered Organization, or RO); Don Williams, vice president of government relations for Curaleaf (also a New York RO); Todd Johnson, the executive director of the New Jersey Cannabis Trade Association; Saki Fenderson, co-founder, TaintedLoveBK, an educational advocacy group; and Duclas Charles, a staff pharmacist at Curaleaf Queens.
Speakers repeatedly pushed several talking points: that unlicensed cannabis is of poor quality and contains harmful contaminants like heavy metals; that consumers need to be educated and avoid these products; and that these groups are not calling for stiffer criminal penalties, but instead want civil penalties to do the job of dissuasion.
Abebe said during the briefing that the report was prompted by “concern for public health and safety because of the new illicit operators that are posing as dispensaries and leading to a great deal of consumer confusion.” Abebe added that there’s a “clear distinction between legacy operators and these new bad actors.”
The state’s Office of Cannabis Management has yet to focus a widespread public education campaign on the unregulated shops that are visible throughout the city. Not to mention the overt unregulated sales happening in other storefronts, like bodegas or delis. For example, on a recent November evening, a bodega worker in Manhattan pulled out a Cresco-branded vape cartridge from behind the counter when asked about vape hardware for sale.
“This proliferation of these popup dispensaries is creating an incredibly challenging environment for both medical dispensaries and these new [conditional adult use retail dispensary] applicants to be able to succeed, these first to market social equity operators who are just getting started,” Abebe said, referring to the CAURD licenses that New York cannabis regulators have begun to award to “justice-involved” applicants who will sell the first legal crop of adult use cannabis in the state.
Charles, the pharmacist at Curaleaf Queens, emphasized the importance of testing and highlighted issues related to inaccurate labeling of THC in cannabis products. The report showed that some products contained far less THC than advertised, while others contained far more; Noise NYC’s Flav Sour Belt gummies, for example, were labeled at 100mg THC per piece, “but tests revealed it to contain more than double that amount,” or more than 200 mg per piece.
Charles gave an example of a consumer who sees on the news that cannabis is now legal, but might not realize that the shop on their corner is not a regulated or legal storefront. Some of these operators even claim to be licensed, adding to consumer confusion.
“They’re going to assume that the experience that they had with this new pop up storefront in Times Square or in their neighborhood is the same as what these licensed dispensaries are providing,” he said. “And a negative experience there will then affect the perception that they have of the cannabis industry and of the dispensaries that are here in New York State and New York City as a whole.”
At least two staff members of the Office of Cannabis Management, spokespersons Freeman Klopott and Aaron Ghitelman, attended the briefing. Ghitelman told Cannabis Wire that the report included “very interesting data.”
“This highlights exactly what the State has been saying: These illicit operators have unsafe cannabis products that put public health at risk and their sales must stop immediately. In the coming weeks, the first licensed adult-use sales from retail dispensaries will begin, providing consumers with products tested for a wide array of potentially harmful elements, including heavy metals, e-coli, aspergillus, and other contaminants in line with practices in other states,” Ghitelman told Cannabis Wire. “There is no comparison between the safety of cannabis sold illicitly in these unlicensed storefronts and what will line the shelves of legal regulated adult-use dispensaries.”
Ghitelman added that regulators will continue with their public education efforts, and “work with local law enforcement entities to shut down illicit shops across the state, and take any other action, including seeking to permanently bar these illicit operators from the industry.”
Cannabis Wire reported at the most recent Cannabis Control Board meeting in Harlem on November 21, during which OCM executive director Chris Alexander hinted that the first legal cannabis sales might take place by delivery as CAURDs get their storefronts up and running.
Johnson, the executive director of the New Jersey Cannabis Trade Association, referenced a “proliferation of delivery services” that are unregulated, highlighting another area where CAURD licensees might have to compete. These delivery services sometimes use Facebook groups, for example, and advertise cannabis procured from states like California and Oregon (it’s federally illegal to transport cannabis across state lines, but it’s a common marketing tool).
“It’s a big, growing problem, because especially with delivery, it’s very hard to try to really track those,” Johnson said. “I think everybody can understand that the success of the nascent legal cannabis market in the tri-state area is dependent on consumers having a good experience, speaking with knowledgeable folks at their retail point of sale so that they can choose products that are the right fit for them.”
