Hochul Pushes Proposals Cracking Down on Unlicensed Cannabis Shops

Gov. Kathy Hochul visited New York City on Wednesday to drum up support for her latest proposals for shutting down the unlicensed marijuana shops that have exploded in number in the wake of the legalization of recreational cannabis.

There are more than 400 illicit weed shops in Manhattan alone — outnumbering Starbucks stores in the borough and far surpassing the few dozen licensed cannabis retailers in the entire state.

At a news conference at the governor’s office in Midtown Manhattan attended by several owners of licensed dispensaries, Ms. Hochul sought to allay concerns about a return to the heavy-handed enforcement tactics of the war on drugs while pushing for measures that she said would give “some teeth” to the so far ineffective efforts to wipe out the unlicensed shops.

Her appearance came as state lawmakers were considering her proposal to strengthen the hand of local agencies by giving them the power to padlock stores. She was joined by licensed dispensary owners who said that the legal market could not compete with the cut-rate prices in illicit shops. The governor and business owners also called on search engines and social media companies like Google and Yelp to remove content about unlicensed shops, which they said added to the confusion among consumers about what weed shops were licensed and which were not.

The governor said that the illicit shops posed a public health hazard and undermined the state’s effort to build a cannabis industry that could provide opportunities for people harmed by the war on drugs. She said that efforts to deter the stores with raids and fines over the last year had been concentrated in the hands of too few agencies and had not been effective. Her proposal would make it easier for the state’s Office of Cannabis Management to obtain court orders to padlock stores and would allow for the orders to be executed by local agencies that had more personnel.

“More and more cash keeps going in their doors and not the doors of our legitimate operators — and that’s what needs to change,” she said.

New York legalized cannabis in 2021, prompting a rush by people trying to cash in before regulators could set the rules and hand out licenses. Despite hundreds of raids over the last year, smoke shops have dotted the city’s streetscape, brazenly selling cannabis to consumers who are often underage or unaware that the shops are unlicensed.

Last year, the Legislature gave state cannabis regulators and the tax authorities greater power to go after unlicensed retailers. The city and the Manhattan district attorney also sent warning letters to the landlords of more than 400 shops, but only 15 of the shops have been evicted, according to the office of Mayor Eric Adams.

Overall, few shops have been penalized or closed. The Office of Cannabis Management said it had assessed $25 million in fines, but the agency has collected only $22,500 as retailers have fought the fines in administrative hearings that go on for months, a development that was first reported by The City.

Licensed retailers have called for the state to take action against social media companies and search engines that they accuse of driving unsuspecting consumers to unlicensed shops. Those same sites, the retailers say, have removed listings that belonged to licensed dispensaries without any explanation.

The New York Times searched for dozens of unlicensed shops that had received warning letters from the city and the Manhattan district attorney and found that many of them had active listings on Google and Yelp. Some had over a thousand reviews along with links to their websites and Instagram accounts.

During the news conference, the governor held up a cellphone displaying a list of nearby shops and said, “This is what we have to stop.”

Osbert Orduña, the chief executive of the Cannabis Place, a dispensary with locations in Jersey City and Queens, said that the Queens shop had been removed from Google Maps four times, even though he had provided documents to the company showing that it was a legal shop.

But in statements to The Times, social media companies would not commit to removing the listings and said they did not allow cannabis companies to place ads. Google said that it would display a note indicating that a business had closed but also said it would look into the issues businesses had reported regarding its listings. Yelp asserted that consumers had a First Amendment right to information about all businesses, even unlicensed ones.

“Allowing users to contribute and see information (including complaints) about unlicensed businesses serves the public interest and provides a resource for regulators to determine whether any particular business has appropriate licenses,” the company said.

Mr. Adams has said that he supports the governor’s proposals, but he added that lawmakers needed to give the police and the sheriff’s office the authority to inspect unlicensed smoke shops. Currently, he said, the authorities can inspect a shop suspected of selling cannabis illegally only if it has a tobacco license.

The Manhattan district attorney’s office said that it was also seeking a change to a state property law that would allow prosecutors to seek the eviction of unlicensed shops that “customarily or habitually” sell cannabis. Current law allows them to evict only shops that “solely or primarily” sell cannabis illegally, a spokesman said.

Mr. Adams is scheduled to attend the opening on Thursday of Matawana, a licensed dispensary in Brooklyn that is one of just 77 legal outlets throughout the state. It is one of more than 50 that have opened since an injunction halting the rollout was lifted in December.

The owner, Leeann Mata, said she had spent over $100,000 of her own money to open the dispensary after the state faltered on its promise to provide the first 150 retailers with built-out stores and low-interest loans. Some of the money was intended to pay for her son’s tuition at Hofstra University, but they made a deal that he would start at a community college and then transfer to Hofstra once her dispensary was up and running. But an injunction halted the rollout last fall and left her unable to keep her promise, she said through tears.

She said unlicensed shops abounded near her dispensary in Park Slope.

“They’ve just made my job harder than it has to be,” she said. “And I put everything into this.”