Weed enforcement has floundered so far. Will Gov. Hochul’s efforts change that?

New York City’s unlicensed weed bodegas far outnumber licensed shops by about 250-to-1, according to city estimates. But that isn’t stopping Gov. Kathy Hochul from pouring resources into cannabis crackdowns, as efforts to get the legal industry off the ground continue to sputter.

While Hochul’s tactics so far focus on hitting unlicensed shops with fines and civil actions, marijuana arrests are also on the rise again in New York City, after falling sharply just after the drug was legalized in March 2021, according to NYPD data. That’s thanks, in part, to raids on stores that Mayor Eric Adams has coordinated between police, the sheriff’s office and other agencies.

City and state officials are seeking to ramp up raids on unlicensed cannabis shops, launching a variety of tactics to shut them down. But these efforts have been slow to produce results as some stores reopen quickly after being hit for selling weed without permission. Some stores have shuttered only after multiple tries.

A Weed World store that was raided and had its illegal inventory seized to much fanfare on April 20, a cannabis holiday, was still open for business and purporting to sell marijuana in Midtown last week.

But Dan Haughney, the director of enforcement at the state Office of Cannabis Management, said he’s confident that state efforts will be more effective after Hochul included higher fines and new enforcement tools in the state budget that was passed last month.

“It's an incredible amount of work ahead of us, but I'm more excited than I have ever been to be able to actually have the ability to deal with these locations and get 'em shuttered,” Haughney said.

The governor announced raids on seven shops in Manhattan earlier this month, with the acknowledgement that the inspections were just the first step in getting them to either stop selling unlicensed cannabis products or close their doors. Those shops were hit with violations and could end up with fines of up to $10,000 a day if they’re upheld. If they continue to sell marijuana without a license after that, fines could be ramped up to $20,000 per day.

"New York is proud to have undertaken the most equitable legal cannabis roll-out in the nation and the state will not stand idle as unlicensed operators break the law and sell untested products to underage New Yorkers," Hochul said in her announcement of the raids.

But most of those stores were still open and selling marijuana last week – in some cases while displaying a prominent sign in the window stating “Illegal Cannabis Seized” in bright red letters. Shops face a fine of $5,000 for removing the signs, according to the Office of Cannabis Management, but some employees said customers were undeterred.

Jack Van Hecke, 21, said he missed the sign on his way into one of the shops in Lower Manhattan last week.

“I don't necessarily care, but it is reassuring when a store is licensed,” Van Hecke said, adding that he was worried about getting weed that’s laced with something else. He said he had no clue how to tell if a store was legal or not.

Hochul launched a campaign earlier this year to encourage New Yorkers to shop at stores with regulated and tested products, and the state issued special signs with QR codes for licensed shops to hang in their windows. But it’s still rare to encounter a store with the state’s seal of approval, while flashy weed bodegas are plentiful.

Since the raids Hochul announced earlier this month, the state has hit at least six additional locations in the city and five upstate, according to the Office of Cannabis Management. If fines don’t work, the agency could eventually petition the state Supreme Court to issue a restraining order against the stores or even padlock them shut.

But that could take time and there are a lot of stores to try to hit across the five boroughs, let alone the whole state.

Haughney said the Office of Cannabis Management is in the process of hiring more people to work on enforcement – although it’s unclear exactly how much the state is spending on the effort.

The budget for New York’s Office of Cannabis Management grew from $46 million to $62 million this fiscal year but the agency would not say how much of that money is being funneled into weed raids as opposed to ongoing efforts to set up the legal industry.

Where would all the sales go?

Some unlicensed shops are doing less business than they were a year ago, thanks to the explosion of competitors, but most are still making good money, said Paula Collins, a cannabis lawyer who represents some of the illegal vendors. She said her clients still tend to make about $1,000 a day.

That means there’s plenty of demand.

“Where would those sales go if you could magically shut them down, say, tomorrow?” Collins asked. “Those sales would revert to a sort of underground network, which is where they were before.”

At last week’s meeting of the state’s Cannabis Control Board, farmers who have been tapped to supply the legal industry appeared distraught by how few dispensaries there were to buy the cannabis they had invested in growing so far.

State officials floated the idea of allowing them to sell directly to consumers through sanctioned farmer’s markets this summer — an idea that growers said gave them hope. But regulators said they still had legal concerns to sort out.

“Just give us some outlet, any outlet,” one grower pleaded at the meeting. “You can call it anything. It doesn't matter"

Collins suggests the state should not be so rigid in defining which stores are legal or not and create a path for growers to sell to existing shops that are currently unlicensed if they agree to abide by state taxes and regulations.

But Jeffrey Hoffman, a cannabis lawyer who represents some of the sellers who went through the arduous legal process of getting a dispensary license, said cracking down on illicit competitors is a priority for his clients. The first state licenses were issued to people with past marijuana convictions or their family members. More than 200 dispensary licenses have been issued so far, but many are facing red tape as they try to open their doors.

Hoffman said regulators should prioritize both enforcement and speeding up the launch of the legal industry.

“Hopefully as a regulator you can walk and chew gum at the same time,” Hoffman said. “But if you're not gonna do the former, there's no point in doing the latter.”

Experimenting with different tactics — including arrests

Part of why enforcement has been a challenge is because many politicians are reluctant to revert to stiff criminal penalties for marijuana, after advocates ostensibly legalized the drug to keep those who use and sell it out of jail. When Adams first launched the task force seeking to tamp down the explosion of unlicensed stores, he said, “Our goal is not to incarcerate. It is to confiscate and educate.”

But even if there are other tactics in play, the focus on enforcement is contributing to a rise in marijuana arrests in New York City. After legalization in March 2021, arrests for possession and sale of the drug dropped into the single digits for the second quarter of that year – a dramatic decrease from 163 such arrests in the preceding three months.

Now, those numbers are back up.

In the first three months of 2023, the NYPD made 137 arrests for marijuana possession and sales. The penalties for violating the law are now less severe than when marijuana was fully illegal, but there are still some offenses that can result in jail time.

Prior to legalization, about 90% of arrests were of Black or Hispanic New Yorkers. In the first quarter of 2023, the figure was 64%. Asian New Yorkers, once rarely arrested for the drug, now make up nearly a quarter of arrests.

Kayla Mamelak, a spokesperson for the mayor, said these arrests often involved other charges such as weapons or fentanyl possession, and people are no longer being arrested for small amounts of marijuana.

Mamelak added that the mayor’s interagency task force has conducted more than 613 inspections of shops suspected of selling cannabis or other products illegally since November, issuing nearly 1,068 violations resulting in over $15 million in fines and seized more than $14 million in illicit products.

Hoffman argued that fines alone wouldn’t do the job, and said regulators should focus on going after landlords that own the buildings where illicit sellers are setting up shop — a tactic that is also in the works.

Manhattan Attorney General Alvin Bragg sent out 400 letters to suspected illicit cannabis vendors across the borough in February threatening to contact their landlords and initiate legal proceedings to get them shut down.

Douglas Cohen, a spokesperson for Bragg, said the focus is on owners and corporations that control multiple stores and investigations of an initial group are in progress. He added that the DA is simultaneously reaching out to other landlords to educate them about their options for evicting tenants.

In some cases, different enforcement agencies are now experimenting with multiple tactics on the same stores, apparently trying to find something that sticks.

One of the shops targeted in Hochul’s raids is located near St. Mark’s Place, a block away from the legal shop run by Housing Works. It’s one of four stores that were hit with nuisance abatement lawsuits by the city in February after the NYPD sent undercover auxiliary officers to the locations on multiple occasions to prove they were selling to minors.

At least one shop that was slapped with a similar lawsuit has since closed — but it took multiple tries.

Runtz Tobacco in the East Village closed its doors in early March after receiving a court order to do so, but another store called Convenience Tobacco popped up in its place shortly thereafter. The second shop announced its “Grand Opening” in April with gold balloons and featured a little green pot leaf in a shopping cart on its awning.

When the NYPD caught wind of the new reincarnation, a spokesperson told the Daily News the store was in violation of the court order and the police vowed to take additional action. The NYPD is now in talks with the shop’s proprietor about reopening without any illicit products or references to marijuana, a spokesperson said. They added that they want the landlord to sign onto the agreement.