New York state officials have begun ramping up efforts to stop the sale of marijuana by unlicensed operators, who are circumventing tax requirements and undermining the state's legal weed rollout.The city is going after landlords, too, issuing fines of up to $10,000 to those who knowingly lease commercial property for illegal weed sales.of unlicensed smoke shops selling marijuana, as the state struggles to boot up its legal marketplace.
Since cannabis became legal in the state in 2021, thousands of unlicensed vendors selling marijuana, edibles, vape products and more have been undermining the state's legal weed industry, with the issue being most pronounced in New York City. Currently, there are just 23 legal dispensaries open across the state, with only nine in New York City.
The state has started to crack down on the unlicensed shops by increasing inspections of stores, which can face fines or closure. But its effort has only begun to chip away at the vendors, particularly in New York City. "We're getting to as many as we can," said Daniel Haughney, enforcement director at the state Office of Cannabis Management, in an interview with CNBC.A notice from New York state's Office of Cannabis Management posted in a storefront window in New York City announces the seizure of"illicit cannabis" at the business, June 16, 2023.
The state is employing increasingly aggressive tactics to curb the growth of weed's black market, which consumers often turn to for cheaper, untaxed product. Cracking down on the stores is not only a legal consideration but also an economic one, as illicit sales do not bring revenue to the state. New York imposes a retail tax of 13% on all marijuana products and an additional tax based on potency levels of tetrahydrocannabinol, or THC, marijuana's psychoactive component.