Illegal Cannabis Dispensary Crackdown

Journal

Oct 4

Written By Damian Nicholas

New York’s OCM ramp up efforts to close down illicit smoke shops.

Journal | Dispensary

Words by Damian Nicholas

BARRY WILLIAMS FOR NEW YORK DAILY NEWS

As the wave of cannabis legalization sweeps across the United States, New York City has seen a remarkable shift in its cannabis market. The rise of legal cannabis stores has provided a platform for commerce and regulation, aiming to ensure the safety and quality of cannabis products. The recent closure of illegal cannabis stores in New York City has become a significant reminder of the challenges faced by the legal cannabis industry. While legal stores strive to gain traction in the market, competing with illicit dealers presents a formidable obstacle.

“Illegal dealers, who can operate without the constraints of taxation and regulation, are often able to offer lower prices and a wider selection of cannabis products”

Illegal cannabis stores, characterized by their underground nature, had been operating for years, catering to a significant portion of the city's cannabis consumers. However, with the advent of legal dispensaries, the city initiated a crackdown on illicit establishments. The Office of Cannabis Management, with the support of regulatory bodies, launched a targeted operation to close down illicit smoke shops. The crackdown, which began in June, involved gathering evidence, conducting undercover purchases, increase inspections and coordinating efforts between various law enforcement entities.

Daniel Haughney, Enforcement Director at the Office of Cannabis Management stated in an interview with CNBC, “We’re hitting them with everything that we can.” Failure to comply to violation notices and cease-and-desist orders will lead to illegal cannabis business owners facing seizure of product, closure of stores and daily fines that can reach $20,000. In August, legislation was enacted by New York City targeting landlords who lease commercial real estate to unlicensed sellers. Under this new legislation landlords may be fined up to $10,000 for raid on their property that yield illegal cannabis.

While the closure of these stores is considered a milestone, the legal cannabis industry still faces its own set of struggles. Since the introduction of legal stores, there have been concerns about high prices, limited product availability, and excessive regulations that hinder the growth of the market.

Entrepreneurs who have invested heavily in bringing legal cannabis to New York City are now grappling with the challenges of fierce competition from the black market. Illegal dealers, who can operate without the constraints of taxation and regulation, are often able to offer lower prices and a wider selection of cannabis products. However, despite these hurdles, there is an optimistic outlook for the future. With increased government support and a growing understanding of the economic and health benefits of legal cannabis, steps can be taken to level the playing field. Regulatory bodies can work towards streamlining processes, reducing red tape, and providing incentives for customers to choose legal, regulated options at a fair price.