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Lawmakers tell the NY cannabis regulators they need to do more to close down illegal pot shops

The New York state Capitol building at night.
Matt Ryan
New York NOW
The New York state Capitol building at night.

A state Senate hearing this week on New York’s legal cannabis rollout highlighted flaws in the system, including a proliferation of thousands of illegal pot shops operating across the state.

The law to allow the regulated sale of adult recreational marijuana was approved in 2021. Since then, bureaucratic roadblocks and court injunctions have slowed the program. Only about two dozen legal retail shops have opened out of the 160 that were supposed to be in business by now.

At the same time, possession of marijuana is no longer illegal and sales of marijuana has been decriminalized.

As a result, an estimated three thousand illegal pot shops are in business all across the state.

At a hearing this week, state Senators grilled Office of Cannabis Management Executive Director Chris Alexander on steps his agency is taking to close the stores.

Sen. Brad Hoylman-Sigal said dozens of illegal stores are operating in his Manhattan district, which includes Hell’s Kitchen and parts of Greenwich Village.

“A worker at Smoke City on 710 9th Avenue was shot in the leg during an attempted robbery. In January, there was a shooting in front of a store called Forbidden Cannabis in Hell's Kitchen. And an unlicensed shop at 423 9th Avenue was recently held up at gunpoint,” Hoylman-Sigal said.

Hoylman-Sigal says high school students are known to frequent some of the illegal shops, which he says market their products to children. He asked Alexander what his office plans to do about it.

“This is a public health issue, particularly for young people,” Hoylman- Sigal said. “Does it not deserve a more expedited process for addressing the illegal shops?”

“I absolutely agree, Senator,” Alexander answered. “We want them closed as bad as you do.”

Hoylman-Sigal, along with other Democratic senators who questioned the OCM staff, backed the original law to legalize cannabis.

Senator Liz Krueger, who represents parts of Manhattan’s East Side, asked Alexander if the fines imposed for illegal operations, at up to $20,000 a day, are too low.

“If you close an illegal store, and you take the product, but the fines aren't big enough to actually discourage people from just opening up again,” said Krueger ,who said the law has already been altered to increase the fines.

“You'll spend time and resources closing stores,” she said. “A d two days later, they’ll reopen.”

Alexander agrees that the fines are too small, given the estimated profits that the illegal stores reap.

“Even at the 20,000 dollars a day limit for some of these folks who are owning multiple operations across the City, or across the state, it is still a cost of doing business,” Alexander said.

The legislature in June enacted new enforcement powers to close down the illegal shops. Senator Andrew Gounardes questioned why, after OCM initiated over 300 actions on the stores, just 16 have been closed for good so far.

“That seems like a startlingly low number, given the fact that we all recognize there are 1000s of these illegal shops around the state,” Gounardes said.

The hearing comes as the online news publication The City reports that OCM has put its hearing process to levy fines against illegal pot shops on hold because they don’t have enough staff.

Alexander told senators that his office plans to restart the hearings but says he doesn’t know the exact date.

Karen DeWitt is Capitol Bureau Chief for New York State Public Radio, a network of 10 public radio stations in New York State. She has covered state government and politics for the network since 1990.