Illicit NYC Pot Shops Continue  to Take Advantage of Laws

By: Mario Mancini

Weed dealers are taking advantage of lax laws in New York City to open illegal stores all over the city. The majority of the illegal smoke shops are owned through limited liability companies (LLCs) and some are corporations, a lawyer who has represented illicit store owners told The New York Post.

“Most of these shops don’t have bank accounts,” said attorney Paula Collins. “These are cash businesses.”

“They say we are going to put this tax lien on you. How are you going to collect that?”

“There’s nothing to seize.”

Mayor Eric Adams has estimated that there are 1,500 illegal pot shops that have taken root in the city since the state legalized recreational marijuana use in 2021. Hochul put the number at 2,500.

Collins claimed the total is closer to 5,000, adding that the average illegal smoke shop is making $2,000 to $3,000 profit a day.

Many of the illegal smoke shop owners are increasingly converting their LLCs to corporations since corporations do not carry any personal liability after they dissolve, Collins said, which will make Hochul’s clampdown even less effective.

The proliferation of pot stores on every corner has meant the streets stink of marijuana and stoned zombies are crowding the streets.

“When Hochul says she wants a $10,000 fine, I giggle,” Collins said.

Many of the unlicensed stores are owned by people from Yemen, several sources said.

Collins said she also has clients who hail from countries in the Caribbean, including the Dominican Republic.

Revealing the true identities of the owners is dicey, since LLCs are commonly used by everyone from celebrities to mom-and-pop real estate investors.

“There are circumstances where the state could go in and peel back the limited liability protection and pierce the corporate veil to see who owns the LLC”, said Richard Weltman, whose firm Falcon Rappaport and Berkman represents legal shop owners.

“I think some operators will just close their doors and you’ll never hear from them again,” Weltman added, “But there could be a few poster child cases.”

The legalization of pot has been a disaster for New York City. It has yet to be financially advantageous and has only contributed to crime and a decrease in the quality of life for good citizens.

It’s one thing to enact laws to protect the citizens of New York City from the pot industry, it’s another thing to enforce these laws. But enforcement falls on the woefully understaffed Office of Cannabis Management, which currently has only 150 workers, and the Department of Taxation and Finance.

The nonexistent enforcement of the illegal marijuana shops and the bushels of weed coming in mainly from California poses great risks to pot smokers, according to a report co-authored by the New York Medical Cannabis Industry Association last November.

“Many of these locations falsely advertise the sale of THC products as legal or licensed, misleading consumers and selling products blatantly masquerading as popular name-brand chocolates, candies, gummies, and other well-known snacks,” the report said.

The agency bought products from 20 illegal New York City stores in August and sent them to a third-party laboratory.

“Gov. Hochul will continue to work with the legislature and our partners in law enforcement to crack down on illegal operators, enforce the law, and explore every possible mechanism available to protect the health and safety of New Yorkers,” Hochul’s First Deputy Press Secretary Avi Small said.