How effective the latest effort will be remains to be seen.
“It’s about time.”
That was the first reaction that Green Market Report received on Friday after news broke the prior afternoon that New York officials had begun a hotly anticipated crackdown on unlicensed marijuana sellers.
The attorney who wrote the words, New York City-based cannabis lawyer Jeffrey Hoffman, said the only surprise was that it took authorities until the summer of 2023 to get started on shuttering the unlicensed smoke shops.
Hoffman was giving voice to frustration that has long simmered beneath the surface for those who have been trying to enter the recreational market by playing strictly by the rules, only to watch as countless entrepreneurs essentially cut the line and began selling openly and without any cannabis-related permits.
“They should have started this last summer,” Hoffman wrote in an email. “Better late than never, so let’s get it on.”
Hoffman threw in an important caveat, however, which also goes to the heart of the larger enforcement quandary: the uncertainty of what approach will actually be effective in stamping out the illicit trade.
“No arrests, no convictions, no incarcerations. Fine the landlords and take their buildings,” Hoffman wrote, echoing a long-held sentiment within the industry that enforcement shouldn’t create a new war on drugs through the criminalization of marijuana, but that it should be done with civil penalties.
That, so far, is the approach being taken by New York regulators – with citations and fines issued at seven locations on Thursday alone – but it’s uncertain as to how effective it will truly be.
Another source told Green Market Report that one unlicensed shop raided this week by authorities plans to reopen and see what happens, which is hardly a surprise given the immense profits that many of the bodegas and smoke shops have reportedly been turning. That makes the prospect of a civil fine – even one as high as $10,000 or $20,000 – possibly an acceptable cost of doing business.
There are also myriad other logistical questions swirling around the enforcement push, said New York cannabis attorney Paula Collins, who represents some of the shops that are likely to be raided.
Collins wrote on social media that she felt “jarred” by the cognitive dissonance created by the OCM – which is ostensibly dedicated to social equity – using “its very own police force” to penalize those selling marijuana without permits.
It’s also unclear just how fast the crackdown will be run, since there are potentially thousands of operators that may face fines and cease-and-desist orders, but it will take time for authorities to get to all of them. It’s also not clear which shops are being prioritized, if the crackdown will extend to unlicensed delivery services, and whether stores that are shuttered actually remain closed or if they simply reopen in new locations.
All of this means the New York market still has a long way to go before it reaches any sort of stability. (Full Story)