New York regulators identify 52 allegedly illicit marijuana shops

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New York regulators publicly identified the 52 allegedly illicit marijuana stores that were sent cease-and-desist letters earlier this year and reiterated how such shops undercut the state’s equity goals.

The state’s Office of Cannabis Management said in a news release that the office has received additional tips of allegedly illicit stores and is looking into those.

State officials notified the operators that they could be barred from participating in the upcoming multibillion-dollar recreational marijuana market if they don’t cease operations.

But regulators have been reluctant to take that final step, hoping the illicit sellers close on their own.

The (Syracuse) Post-Standard reported that it spoke to three people on the list:

  • One acknowledged he was selling without a license and closed his store.
  • Another said he ran a marijuana gifting shop but denied he had received a cease-and-desist letter from the state.
  • A third person said she wasn’t in the marijuana business at all.

Scores of illicit shops have flourished across New York for months, posing a tricky regulatory challenge for a state intent on issuing half of its adult-use marijuana licenses to social equity applicants.

The stores “falsely depict their operations as legal cannabis dispensaries, but they are not licensed by New York State and are selling untested products that put public health at risk,” the Office of Cannabis Management said in the release.

Tremaine Wright, chair of New York’s Cannabis Control Board, said in the release that selling any item or taking a donation and then “gifting” marijuana to a customer is illegal without a license.

But The Post-Standard reported that district attorneys across the state aren’t unanimous in considering such gifting as illegal.

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The regulated recreational marijuana market in New York is projected to launch late this year or in early 2023.

The 2022 MJBiz Factbook projects that annual sales will hit $1 billion-$1.2 billion in 2023 and $2.2 billion-$2.7 billion by 2026.