New York, Wild Wild West cannabis market

(New York) Question likely to interest some tourists planning an Easter stay in New York: how do you distinguish an illegal cannabis store from a legal store in this city that never seems to quit smoking again, judging by the almost permanent smell that now wafts through its streets?

Easy. The illegal store hides nothing of its activities. Through its window, passers-by can see its products, as numerous as they are varied. On the other hand, the legal store obstructs its windows and places its products, not always so numerous or varied, in such a way as to hide them from the sight of passers-by.

This is the case for Housing Works Cannabis Company, the first legal cannabis store for recreational purposes in New York, which only opened on December 29. “We’re following city rules,” says Sasha Nutgent, manager of the new store at 750 Broadway near Astor Place. “They don’t want people outside – especially children – to see what’s going on inside. »

Another question: how many legal recreational cannabis stores are there in New York? Three, so far. And how many illegals? About 1,400, according to the estimate offered in mid-January by New York City Sheriff Anthony Miranda during testimony before the City Council. It was enough for an advisor to use the expression Wild Wild West to describe the cannabis market in New York.

The city’s mayor, Eric Adams, prefers the short form Wild West to talk about this proliferation of shops, tobacconists or bodegas (convenience stores) that sell cannabis without a license. By Easter, some of these businesses will have been forced to stop their illegal competition. But others will probably have replaced them.

“The greatest market “

This would not surprise David Holland, a New York lawyer specializing in cannabis law. “If history shows us anything, it’s that New York is the biggest market. And law enforcement couldn’t arrest enough people to try to take that one down,” he said.

Especially since there will always be people ready to try their luck, “even if they risk life imprisonment,” argues the lawyer. “So store operators and maybe some owners are going to take those risks given the financial windfall they can get. »

It must be said that the risks are no longer what they used to be. By legalizing cannabis for recreational use in the spring of 2021, New York State officials have largely turned their back on their law enforcement approach to the drug. In particular, they erased the criminal records of people convicted of possessing or selling certain quantities of cannabis. And they promised to favor the “victims” of this repression, black or Hispanic for the most part, when issuing the first 150 permits to sell cannabis.

However, this issuance of permits, which began at the end of 2022, is being done in dribs and drabs, and above all has not prevented a plethora of businesses from starting to sell cannabis without a permit. And without too much fear of the police.

“They are not interested in a smoke shop like mine,” says Luke, behind the counter at YOLO Exotics & Vapes, a tiny tobacco shop near New York City Hall in lower Manhattan. “I only have $2,000 worth of cannabis products. I’m not like those big stores you see everywhere, ”he adds, asking all the same to be identified only by an assumed first name.

Of best price

Located at the corner of 1^D Avenue and 11^e Street, in the East Village district, Recreational is among the largest businesses. But his manager, who wants to be identified by the first letter of his first name, displays the same nonchalance vis-à-vis the police.

“The police came to visit us a few times,” says G.

– What happened ?

– Nothing. They wanted to know if we had been robbed. »

More than two months after opening its doors, Recreational has yet to be burglarized, unlike some of its competitors, who dare not complain to the police. And business is good, according to G. “We have better prices and a wider variety of products than official stores. That’s what attracts customers,” he says, ignoring the factors that explain these advantages: the products of illegal businesses are not taxed or limited to those that New York State produces.

Not all dispensary managers are as talkative as G. In the Tribeca neighborhood, CBD Kratom greets a journalist with a business card to join the regional marketing director of this national cannabis chain, which now has 18 establishments in New York.

Other managers of stores also belonging to chains will use the same tactic which makes it possible to discover a new breed: marketing directors who refuse to speak to the media.

But what is New York City waiting for to put an end to this Wild West ? In a recent op-ed, Mayor Eric Adams said he wouldn’t rule out criminal charges against operators of illegal dispensaries for tax evasion, money laundering or selling cannabis to minors. But, until further notice, he opts for civil actions.

Besides the turnover

What are these civil actions? Three weeks ago, the Manhattan district attorney’s office sent about 400 letters to unlicensed stores, warning them that the City would initiate legal eviction proceedings against commercial tenants who sell unlicensed cannabis.

The sending of these missives follows the seizure of $4.1 million worth of cannabis products from 53 businesses by the New York City Sheriff’s Office.

Popped.NYC, located on the Lower East Side, is one such business. Its owners, holders of a license to sell CBD products, had decided to improve their offer by offering their customers cannabis products. One morning, they received a visit from the police. “They said, ‘We’re here to search. We’ve heard you have things you’re not supposed to have,” recalls Evan Forsch, one of Popped.NYC’s owners.

“They left with a large garbage bag full of cannabis. After this seizure, Evan Forsch and his wife Laura stopped selling cannabis products, not wanting to risk losing their license to sell CBD products.

But Laura Forsh doesn’t believe threats of foreclosure or eviction have the same effect on the biggest illegal stores. “For them, it’s part of the cost of doing business,” she says.

The mayor of New York can still console himself, he who hopes to make $ 1.3 billion in revenue from cannabis sales over the next six years. Contrary to his fears, legal establishments do not seem to suffer too much from illegal competition.

“We exceeded our expectations dramatically,” says Sasha Nutgent, Sales Manager of Housing Works Cannabis Co. “I was amazed when I saw our numbers. »

She attributes this performance to several factors, including the store’s mission, which is to support an association dedicated to people living with HIV or AIDS. “People appreciate the fact that all of our profits go to the association,” says Sasha Nutgent. They also come because they want peace of mind. They know that our products are lab tested, that there is no fentanyl or other poisons in them. A well-informed tourist is worth two.