The cannabis industry’s hopes were crushed with the failed recreational NY rollout – they may have started fixing it.
New York is one of the signature cities in the world. The marijuana industry sees it as one of the top global markets. The state government had a strong plan to roll out recreational  and changed in within a few weeks of launch. Chaos ensued and the issuing of licenses basically became a trickle.  But is New York finally getting its marijuana act together?
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The chaos allowed around 2,000 illicit dispensaries to open in the state, with around 2,500 in greater New York City. There were even unlicensed retailers within 3 blocks of NYC’s iconic City Hall. After trying to force landlords to shutter the stores and then begging social media companies to unplatform them, the government had to act. The state legislature passed new laws to crack down on the unsanctioned shops. Previously, the city’s power to step in had been limited and the legal market was bogged down in red tape.
The state is proud they have closed roughly 1,000 illicit stores in the state with over 750 NYC alone. Over 41,000 violations have been issued, totally $65,671,487 in penalties. The city estimates it has already seized a total value of $41,443,792 in products, whose fate remains unclear.
In an added complication, it seems part of the products sold came from the California black market. The closures could benefit the Golden State’s efforts to wrangle their mess. The Empire State has less than 200 retailers so this can be a huge boom for them. The illicit market was very profitable in NYC, with some estimates of $1.5 billion in sales in 2023.
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Andrew Cooper, Chair of hte Cannabis & Psychedelics Practice Group at NY headquartered Falcon Rappaport & Berkman LLP had a comment on it. “There is no doubt that the current initiatives which have been implemented to shut down illicit cannabis operations as part of the newly enacted budget have been an overwhelming success with over 230 illegal cannabis stores padlocked and over 6,000 pounds of illicit product valued at $22 million seized since May 21, 2024. In the 10 weeks since enforcement actions began, regulated cannabis sales are up 72 percent in New York City with retailers collectively reporting $2.6 million in weekly revenue growth over the same period. This puts New York on pace to sell $520M of Cannabis in 2024, with some people suggesting that it could break $700M.”
 “Because the sheriff’s office can now enter and inspect businesses without a court order, it’s able to quickly raid retail stores and seize products. Unfortunately, legal CBD and Hemp stores who, arguably, are not selling illegal weed have been getting caught up in these raids as well. In many instances, Sheriff’s deputies and NYPD officers, many of whom are wholly unfamiliar with the relevant regulations including the fact that CBD and Hemp can be sold with the appropriate license, still confiscate legal products and arrest shop owners” continued Cooper.
Governor Kathy Hochul and Mayor Eric Adams celebrated the success of the crackdown on Wednesday.
“In the three months since launching ‘Operation Padlock to Protect,’ our administration has delivered major results on a major quality of life and public safety issue,” Adams said. “For too long, illegal shops have contributed to a feeling that anything goes on our streets.”
Is New York finally getting its marijuana act together, the industry is certainly hoping it is.
