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NY’s first legal weed retail licenses to be awarded Monday as black market thrives

New York is poised to award its first retail licenses Monday to sell legal marijuana products — but regulated dealers will be smoked out by a thriving black market, The Post has learned.

The state’s Cannabis Control Board is expected to review applications from businesses and nonprofits and grant some of the first of 150 “Conditional Adult Retail Pharmacy Licenses.”

Some of the shops may be open for sale by the end of the year – but industry leaders argue that without a proper crackdown on illegal sellers, the fledgling businesses could be set up to fail.

“[State pols] is picking up the market before it can start because the illegal market is already selling on the street, and it’s not being taxed,” said Joseph Davidson, CEO of Nevada-based cannabis consulting firm Qanvus. “I’m walking through New York right now, and I smell weed!”

Recreational marijuana was legalized as part of last year’s budget process, but the law failed to introduce an enforcement mechanism to curb the burgeoning black market trade.

Although unlicensed shops still can’t sell or “gift” cannabis, illegal pot products are being passed around the city like a blunt circle, creating stiff competition for the soon-to-open legal vendors.

New York's Cannabis Control Board is expected to award the state's first licenses to sell cannabis products on Monday.
New York’s Cannabis Control Board is expected to award the state’s first licenses to sell cannabis products on Monday.
AP Photo/Mary Altaffer, File

“It’s backwards the way they’re rolling it out and I think it’s short-sighted,” Davidson told The Post. “If I were a business person, I would not invest here in the retail market.”

The black market even grows like a weed in neater neighborhoods — like Kew Gardens, Queens — where a Post reporter easily bought gum and other smokable products on Saturday night.

The reporter purchased “premium marijuana flower” described as “The Runtz” and “Krazy Runtz” as a two-pack deal at Triangle Dreams located at 82-64 Austin Street. The store employee showed off the weed in display cases before ringing it up for $70 cash.

A Post reporter was able to call a marijuana product
A Post reporter was able to purchase a marijuana product called “The Runtz” from Triangle Dreams in Kew Gardens, Queens.
Triangle Dreams kept its marijuana for sale in a glass display case.
Triangle Dreams kept its marijuana for sale in a glass display case.

The author then purchased marijuana-infused “Cotton Cluster” gummies for $25 cash at Lefferts Exotics at 81-27 Lefferts Blvd. The display package describes the contents with 10 mg of THC for each gum and 100 mg for a bag of 10.

Another reporter went to NYC Convenience at 40 Exchange Place in Lower Manhattan, where he bought two pre-rolled joints. He paid $15.60 per stick with a credit card. The receipt left the items unlisted.

The marijuana receptor licenses to be handed out on Monday are part of a group of up to 36 initial approvals.

Up to 150 licenses will eventually be handed out — all to New Yorkers previously convicted of marijuana offenses. The delay in handing out all the expected licenses stems from a recent federal court order that temporarily blocks the granting of licenses in parts of the state.

Cannabis-infused
Cannabis-infused “Cotton Cluster” gummies for sale at Lefferts Exotics in Queens.
The product contains 10 mg of THC for each gum.
The product contains 10 mg of THC for each gum.

A spokesperson for the NYPD said that while the department and the NYC sheriff’s office have been closing down weed trucks selling the product, the law makes it difficult to effectively police shops.

“The law, as currently written, does not provide an enforcement mechanism when an unlicensed business displays marijuana for sale,” The Post said in a statement when asked about the department’s efforts to crack down on offenders.

“The law only provides an enforcement mechanism if an actual sale is observed, and even then the penalties are limited due to problems with the law as written,” the statement said. “Furthermore, state law does not provide the NYPD with a mechanism to shut down unlicensed establishments.”

State Sen. Diane Savino (D-Brooklyn/Staten Island) said the Legislature should amend the law to allow state, local governments and police agencies to penalize bad actors with either higher fines or permanent bans.

“The problem is, we have a consumer who is now very comfortable going into a store, a bodega, a smoke shop that has products on display that are attractive and catch your eye,” said Savino, who sponsored the bill New York’s medical marijuana program told The Post.

“They don’t have to provide any documentation, share their data with any agency or anyone – how is a legitimate licensee supposed to compete with that?”

City Councilman Bob Holden (D-Queens) told The Post that his office has been inundated with complaints from small business owners who complain that lack of enforcement is bad for business – and state intervention is needed.

“What’s the point of fulfilling the obligations of bureaucratic paperwork, paying thousands of dollars for a license, and possibly hiring a lawyer to see you through the process, only to lose to your competition that illegally sells cannabis sell?” he wrote in a letter obtained by The Post sent to Gov. Kathy Hochul and Mayor Eric Adams, pleading for tightened regulations.

“Illegal drug dealers used to be in back alleys. Now they get a storefront and are exempt from taxes.”

The spokesperson for the state’s Office of Cannabis Management said it was “excited to submit the first applications for the first retail pharmacist license applications for stores that will be owned by those with a cannabis conviction, or family members of those with a cannabis conviction, along with nonprofit organizations to serve justice, involved individuals and communities.”

“These individuals and nonprofit organizations will be considered by the Cannabis Control Board on November 21stStmeeting. If approved by the Board, retail pharmacy licensees will be able to move forward with their businesses and prepare for sales before the end of the year,” spokesman Freeman Klopott said in a statement.

Klopott added that “There cannot be a legal, regulated market operating side-by-side with an illegal market.”

“From the town of Cheektowaga to New York, OCM and law enforcement agencies have worked together to try to stop illegal activity throughout the state,” the statement said. “These efforts have included seizing products, issuing cease and desist letters, and removing trucks used for the illegal sale of marijuana and we will continue to enforce the law to end their operations .”

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