While elected officials in New York debate how to shutter more than 1,000 shops illegally selling cannabis, concentrated in New York City, more open their doors. And with just a handful of legal adult use shops open in the state, time is ticking for these nascent businesses as they compete with those selling cheap, untaxed and untested cannabis products.
The unregulated cannabis market in New York has been the topic of intense discussion among regulators and lawmakers since last year. At the height of the pandemic, these shops proliferated as rent prices decreased and other businesses struggled. Most recently, Gov. Kathy Hochul introduced legislation that would establish hefty fines, including on landlords that enable these shops to open, as Cannabis Wire reported. This came after Manhattan District Attorney Alvin Bragg’s office sent more than 400 letters to landlords and building owners, threatening action if their tenants continued selling unregulated cannabis. Late last year, City Council Member Gale Brewer ran a survey on the Upper West Side on the number of illegal storefronts just within her district, and she found 63, including one directly across the street from her office.
While the breadth of the issue is coming into view, Cannabis Wire conducted a survey of two Manhattan neighborhoods at the start of 2023 to better understand how New Yorkers are experiencing these shops.
Between Columbus and Amsterdam Avenues, from 59th to 109th street, a total of 17 storefronts advertised and sold cannabis. There were fewer storefronts on Columbus Avenue—5 total—compared to the 12 on Amsterdam Avenue. Though most were smoke shops, some convenience stores and delis were included in this documentation. The smoke shops primarily showcased bongs, hookah pipes, grinders, tobacco products, rolling papers, and the occasional CBD products, usually behind secured glass. Upon asking, barring the occasional vendor who asked if this reporter was a member of law enforcement, anyone could easily receive delta-9-THC or delta-8-THC edibles or vape oil cartridges. And while it is posted that proof of age is required, many did not ask for identification.
One smoke shop on the Upper West Side carried edibles sold in packaging that closely resembled Skittles candy, but dotted with cannabis leaves on the front, and sold a package of 1,000 mg THC Flav Belts edibles for $41.
For comparison, Housing Works Cannabis Co., one of the licensed adult use cannabis shops in the state, sells 100 mg (10 mg per serving) Pure Vibe edibles for $45.20, tax included. (The very first established adult use market in the U.S., in Colorado, still has a legal edible retail limit of no more than 100 mg per product with a clear 10 mg per serving.) This means that the unregulated cannabis edibles sold on the Upper West Side were 10 times cheaper, when factoring in the serving size.
Across Central Park, a total of 22 storefronts were recorded in East Harlem between 96th and 135th street, and across Lexington, 3rd, and 2nd Avenues. The shop distribution was equal for 3rd and 2nd Avenues, but there were double the number of shops on Lexington Avenue, likely due to train access and therefore constant foot traffic, compared to the other two avenues.
At a glance, storefronts are more clustered together in East Harlem compared to the Upper West Side, but there are not many differences among the smoke shops. There are, however, observable differences when it comes to the delis and convenience stores selling cannabis. Delis and convenience stores in East Harlem had locked glass cases displaying products like smoking accessories and edibles near the front door. On the Upper West Side, it took a minute to find these products, which were sometimes stored on a top shelf on the wall behind the counter.
Paint Puff “N” Peace, located on 112th St. and 3rd Avenue, opened its doors in 2021 when it replaced a laundromat. They are listed on Google Maps as a cannabis store, and they have other locations in NYC: one in Brooklyn; two in the Bronx; one on Frederick Douglass Boulevard, which is a 22 minute walk from 3rd Avenue; and, though it does not appear when searched on Google Maps, there is another Paint Puff “N” Peace on St. Marks Place. In 2022, the Office of Cannabis Management issued cease-and-desist letters to one of the Bronx locations, two of the Manhattan locations, and its business filings location in Albany, NY.
Immediately upon entering Paint Puff “N” Peace, IDs were scanned and a selection of t-shirts, painting supplies, and cannabis products were in public view. On the walls, they had one educational poster about the effects of THC and CBD, as well as Eventbrite invitations to their painting classes. This store carried a selection of gummies, chocolates, nutty bud-dy (500 mg THC, 8 pieces) – a spin off on Nutter Butters – and CBD gummies. The store appeared to have a THC cap of 500 mg, and their most popular brand were Sugar High edibles. The price range was $25-$55, cash only. After paying, customers were invited to a lounge where they could enjoy their recent purchases. It’s worth noting that while cannabis lounges will eventually be licensed, the rules for them have not been released, nor have any such licenses been issued.
Ultimately, products sold in unlicensed shops in New York fall along a spectrum. On one end, edibles branded as Skittles are an obvious knock off of the Wrigley Company-owned candy. These types of products are a growing concern to makers of packaged goods, particularly snacks. Last year, the Consumer Brands Association sent a letter to Congress, signed by companies like General Mills, Inc., Kellogg Company, and PepsiCo, Inc., asking lawmakers to “immediately address the dangers copycat THC edibles pose to consumers, especially children.”
These, and products like Sugar High edibles, cannot be traced to any particular manufacturer or location. And then there are products that appear to come from a licensed manufacturer, but to have illegally crossed state lines to be sold, illegally, in New York.
Flav, for example, is a licensed cannabis company in states like California and Oklahoma. The “Flav Belts” packages sold in New York City are identical to the ones the company sells in Oklahoma. Whether these were transported to New York from Oklahoma, or they are a knockoff of the brand, remains unknown.
Chris Alexander, Office of Cannabis Management executive director, gave a brief report at this month’s Cannabis Control Board meeting and addressed the topic of ongoing unlicensed cannabis sales.
“We have been working constantly as a small team, but working constantly, across the state to ensure that the continued operation of these illicit shops comes to a close,” Alexander said. “We will continue to make enforcement a priority. We understand that in order for you all to be successful,” he continued, addressing newly licensed legal operators, “we must tamper down that activity, and that remains a key priority for this office.”
Hochul’s bill remains under negotiation.
