Some NY Lawmakers Say Illicit Pot Shops Must Close Before Adding Licensed Shops

After officially legalizing cannabis for adult use in New York, the journey that followed has been fairly tumultuous as multiple roadblocks have delayed shop licensure and hindered the legal industry’s full potential.

A number of lawsuits and a change in gubernatorial leadership delayed dispensary licensure and openings, in turn allowing the illicit market to flourish with those shops drastically outnumbering the amount of legal dispensaries in the state.

As New York growers, business owners and myriad cannabis professionals continue to wait for their licenses to be approved, some New York lawmakers are embracing a different approach (that would likely extend the wait for industry hopefuls even longer).

Namely, Queens Community Board 9 Chairwoman Sherry Algredo argued that New York should refrain from adding any licensed cannabis shops to her district until authorities are able to shut down those operating illegally, according to a New York Post report. Community Board 9 covers the neighborhoods Key Gardens, Richmond Hill, Ozone Park and Woodhaven.

Ongoing Concerns About New York’s Bustling Illicit Weed Market

“The Board received numerous concerns from residents regarding the proliferation of illegal smoke shops already operating in our district and the negative impact these establishments have had on our community,” Algredo said in a recent letter. “Consequently, the Board will not support any new applications until these illegal operations are shut down.”

While Algredo’s statement reads as fairly definitive, the boards’ recommendations are advisory to state regulators, though they can still influence final policy decisions. The law that legalized cannabis in New York also mandates that applicants for cannabis licenses must notify the community board within the vicinity they plan to operate and appear before it prior to opening their businesses.

The conversation surrounding illicit cannabis shops in New York has been ongoing, though Gov. Kathy Hochul (D) and other lawmakers have consistently touted their efforts to mitigate theses problems.

In April, the governor unveiled new initiatives aimed to shut down illicit cannabis operations and protect the legal cannabis marketplace. The plan allows the Office of Cannabis Management and local municipalities new authority to take action against illicit shops. 

“Unlicensed dispensaries have littered New York neighborhoods, blatantly circumventing our laws and selling potentially dangerous products,” Hochul said in a statement. “Enough is enough. I promised to protect our communities and hard-working, legal cannabis licensees by expediting the closure of illicit storefronts. I’m proud to stand up and say we got it done.”

Nurturing the Legal Industry While Combating the Illicit One

Last month also marked the opening of the 100th adult-use store in the state. New York legalized adult-use cannabis on March 31, 2021. It also looks like that number should increase soon, as the New York State Cannabis Control Board (CCB) shared last month that it approved an additional 101 adult-use cannabis licenses with more than 400 total approved sites in 2024. 

Conversely, it’s estimated that New York City alone has about 2,000 illicit cannabis stores currently operating.

The state is still working to do what it can to fix the issues with the legal industry rollout. Lawmakers recently passed another resolution that gives the Office of Cannabis Management (OCM) the ability to issue provisional licenses, which the CCB hopes will speed up the licensing process. 

“This measure aims to provide provisional license holders with opportunities to begin operations swiftly while adhering to regulatory requirements, fostering a dynamic and competitive marketplace,” the CCB explained.

Still, it’s clear that closing illicit pot shops in the state will not be an easy task. Many illicit shops immediately reopened after raids and temporary shutdown orders under the prior rules, and it’s not yet clear how effective the newly announced laws to close illegal shops will be in practice.

Because of that, closing all illicit shops before allowing new ones to open, even in a single district, may be tougher in reality than in theory. Still, some lawmakers are standing by the need to close unlicensed shops before adding more licensed ones.

“We have 32 illegal cannabis shops. We are not going to entertain any applications for legal cannabis shops until the unlicensed stores are shut down,” CB 9 District Manager James McClelland told The Post.