Mixed Harvest: New York’s Legal Cannabis Boom Masks Ongoing Battle Against Illicit Marijuana Sales

In a year-end statement, New York's Office of Cannabis Management celebrated the financial triumphs of the legal cannabis industry in 2023, boasting about a lucrative $16.5 million in tax revenue generated from the sale of approximately 3.5 million pot products. John Kagia, the Director of Policy, expressed optimism for 2024, anticipating even more substantial growth with a reported $150 million in total legal sales this year.

However, amidst the accolades, the statement remained conspicuously silent about the significant tax revenue being siphoned away by the proliferation of illegal marijuana stores, sprouting up like weeds across the state. With an estimated 1,500 unlicensed vendors operating on nearly every commercial block, these illicit shops have been accused of diverting business from the meager 40 officially licensed dispensaries in New York.

While the statement acknowledged efforts to crack down on illegal operations, seizing more than 11,600 pounds of illicit products valued at over $56 million, the office refrained from providing a comprehensive assessment of the total size of the illegal industry operating in plain sight.

The challenge lies in the clandestine nature of these unlicensed shops, predominantly conducting business in cash and evading cannabis taxes mandated for licensed marijuana dispensaries. When pressed for details, the cannabis office admitted to a lack of firm or reliable estimates regarding the total number of unlicensed shops. Despite the legal cannabis industry's financial success, the battle against the thriving illicit market remains a complex and ongoing struggle.

This story was first published by New York Post.