Opinion: Illegal Pot Shops Threaten New York’s Cannabis Legalization Goals

“Licensed sellers simply cannot compete with unregulated—presumably less expensive—cannabis retailers, and our communities cannot miss out on much-needed revenues intended to fund substance use education, prevention, and treatment initiatives.”

When New York State legalized adult-use cannabis by passing the Marijuana Regulation & Taxation Act (MRTA), the law was praised for its focus on social equity, including provisions meant to ensure that communities devastated by the biased drug policies of decades past were the first to benefit from this new industry.

One little-known benefit was also designed to address the substance use disorder crisis and preventable overdoses caused by opioids: a share of sales will go to support various education, prevention, and treatment initiatives.

But two years later, all of those benefits from a legal marijuana industry could go up in smoke as the illegal market explodes.

The legalization of adult-use cannabis has enabled a proliferation of illicit shops selling unregulated products. Unlicensed sellers are thwarting the critical goals of the MRTA at a particularly deadly moment of the substance use disorder crisis by significantly devaluing the licensed program. This is a disservice to retailers looking to join a new, thriving economic venture, and who have gone through the proper processes to equitably build their business.

Unlicensed sellers aren’t even attempting to hide their nefarious and illegal actions but brazenly acting in plain sight. There are dozens of smoke shops within the blocks surrounding the three licensed shops in Manhattan. These sellers are undermining the new industry and hurting our communities by often brazenly breaking multiple laws.

Unlicensed shops’ disregard for existing legislation has allowed minors to purchase products they should not be able to. These shops sell candy-themed products behind bright, glowing neon lights with humorous and puerile names—attractive to underage consumers.

While the goal of these businesses is purely for profit and enticing as many customers as possible, there seems to be less concern as to what is actually being sold. Some smoke shops sell products tainted with prohibited levels of a number of contaminants including E. coli, salmonella, nickel, and lead.

Less than 10 years ago, New York City experienced the K2 epidemic and to prevent a future issue, regulations on what can be sold and where it can be sold have been created, but now we must focus on the oversight and enforcement of the already existing regulation. 

Across the five boroughs, the city estimates there are 1,500 shops illegally selling cannabis products. A December survey found 61 bodegas, delis, and smoke shops between West 54th Street and West 108th Street, where they found that nearly half are illicit cannabis retailers. In areas like the Bronx, there has been a stark increase in smoke shops, many of which are opening near schools and community spaces.

Many of these businesses are opening in close proximity to one another, some areas with multiple on a given block. Meanwhile, as of Jan. 26, the state had approved just 66 retail dispensary licenses. New York City’s first licensed shop only opened at the very end of 2022, and only four licensed businesses in total have opened since. Businesses selling cannabis otherwise are doing so illegally. The financial burden of fines and taking illegal products has not been enough to curtail the illegal industry.

Mayor Eric Adams and Manhattan District Attorney Bragg announced a partnership with local law enforcement and elected officials to align efforts against establishments selling cannabis illegally. Without supplemental enforcement from the state or within our municipalities, we enable these businesses to continue conducting illegal activity.

But by voicing our concerns and working with entities like the Office of Cannabis Management (OCM), we will see a shift in the dynamic. It is possible to identify legislation to amend the current regulations or redefine the role of municipalities; we begin that process by observing the situation and looking into the needs of our communities. 

We cannot afford to allow bad actors to add insult to injury to a substance use disorder crisis of already epidemic proportions. Licensed sellers simply cannot compete with unregulated—presumably less expensive—cannabis retailers, and our communities cannot miss out on much-needed revenues intended to fund substance use education, prevention, and treatment initiatives.

The Office of Cannabis Management and the city must continue their work to codify MRTA enforcement roles and responsibilities and make sure revenues from the sale of cannabis support the critical, lifesaving work of treatment providers.

In order to fulfill the goals of the MRTA, our government must weed out the bad actors so that a fairer, healthier, safer city can grow.

City Councilmember Marjorie Velázquez represents the 13th district in The Bronx. Ann Marie Foster is the CEO of Phoenix House.