Less-Than-Legal Pot

In New York, it’s no secret that when it comes to cannabis, “every day, there seems to be a new, budding development,” as NYS Assembly Member Linda Rosenthal put it. But since state legislators passed the “Marihuana Regulation and Taxation Act” (MRTA) in the spring of last year, the permitting process for retailers has been slow to get off the ground — and bad actors have taken advantage in the interim.

“The unfettered proliferation of smoke shops on the West Side and throughout this city is a problem,” Rosenthal said on Tuesday night, during a town hall she hosted with Council Member Gale Brewer at the John Jay College of Criminal Justice. Specifically, she was referencing shops that peddle cannabis without permits and sell flavored vape products to underage buyers.

During the two-hour event, a panel of speakers from the NYS Office of Cannabis Management (OCM), the NYPD and the Manhattan District Attorney’s Office presented information about where the state stands. They also answered questions about the existing retail scene that’s no longer underground. “It’s a transitional moment that we’re in right now,” said Melissa Moore, the director of civil systems reform at the Drug Policy Alliance. “We weren’t going to legalize in the way that every other state had; we were going to learn the lessons from those 14 states that had gone ahead of us.”

The plan now is to make it big. “We will be the cannabis capital of the country,” said Dasheeda Dawson, founding director of the NYC Department of Small Business Services’ Cannabis NYC initiative.

The State, Stepping In

On Tuesday, conversation revolved around the workings of new government agencies established to regulate cannabis products and profits. The MRTA legislation, Moore explained, will allocate 40% of tax revenue to a “Community Grants Reinvestment Fund,” another 40% to public education in the state and 20% for “drug education and prevention efforts.” Legalization also created the Office of Cannabis Management, to structure the new production and retail industry.

Now, three tiers of licenses account for cultivators, processors and retailers. Licenses have already been awarded to 277 cultivators and 33 processors statewide. Out of 903 retail applications, 28 businesses and 8 nonprofits have qualified, including the likes of Housing Works and The Doe Fund, a nonprofit that tackles homelessness and criminal recidivism. To be eligible for a permit, organizations must benefit communities involved with the criminal justice system and individuals must have been “justice involved themselves,” said Pascale Bernard, the OCM’s deputy director of intergovernmental affairs.

Before brick-and-mortar storefronts open, licensees will be able to deliver cannabis products directly to buyers, she explained. Eventually, an estimated 3,000 to 4,000 dispensaries will open across the state, according to Tahlil McGough, the deputy director of legislative affairs at the OCM. “We’re going to be making sure that we’re spacing them out,” he said. “We don’t want to saturate an area.”

Any observant New Yorker, however, has likely already noticed illicit dispensaries popping up in the city.

The Pitfalls of Illegal Shops

On the Upper West Side, Brewer’s office has visited 61 smoke shops, looking for those that may be selling marijuana under the table. The night before the town hall, the council member made a surprise visit to one such vendor herself. “I thought, What in hell’s name am I going to say when I get in there, to try to figure out if they’re selling illegally,” she recounted. “But it worked! I said, ‘I have bones and they need some support.’”

In Manhattan, Brewer said, there will initially be four licensed shops: one in the neighborhood covered by Community Board 3, two on Community Board 2’s turf and another under Community Board 10. But unlicensed shops could pose a threat to those navigating the proper legal channels. “How in the world are you, after all your efforts, going to make money” if illicit sales continue, Brewer posed.

Because cannabis vendors without permits evade the taxes imposed on legal retailers, they also have a broader impact. “All of us are being cheated by this,” McGough said.

At the beginning of the month, the New York Times reported that a medical cannabis trade group found “prohibited levels of eight different contaminants, including E. coli, salmonella, nickel and lead” in tests of an array of cannabis products from unlicensed retailers. The report also found that some products weren’t labeled accurately for potency.

Cracking Down

But how does one know which stores are safe? “Some of them present in a way that would make you think that they do” have licenses, even if they don’t, a town hall attendee said.

In legal stores, owners will display permits and buyers will likely undergo multiple identification inspections, according to McGough. But he said the aesthetics of a shop could also become a metric of legitimacy. “Eventually, it will be very easy to tell, because it’s kind of the Wild West right now,” he said. “When you walk into a dispensary, you know; it’s very regulated, it’s very regimented, it’s very clean and concise.”

Other inquiries pertained to the sale of cannabis products from mobile vans, which have cropped up in New York despite a lack of applicable regulations. “These people don’t want the vans,” Brewer said on behalf of community members present in person and over Zoom. “This is a no-van group.”

McGough urged attendees not to buy from unlicensed sellers. The District Attorney’s Office is no longer involved in the “enforcement of marijuana policy,” explained Andrew Warshawer, deputy chief of the office’s trial division, except for instances involving “an overlap between the selling of marijuana and other criminal activity.” Instead, to report a retailer operating outside of legal guidelines, New Yorkers should contact the OCM with as much information as they can safely provide.

“At the end of the day,” Dawson said, “there’s no demand without consumers.”