NY’s first legal weed retail licenses to be awarded Monday — as black market thrives

New York is poised to award its first retail licenses to sell legal cannabis products Monday — but regulated dealers will face getting smoked out by a thriving black market, The Post has learned.

The state’s Cannabis Control Board is expected to review applications from businesses and nonprofits and grant some of the first of 150 “Conditional Adult Use Retail Dispensary Licenses.”

Some of the shops could be open for sale by the end of the year — but industry leaders argue that without a proper crackdown on illegal sellers, the budding businesses could be set up to fail.

“[State pols] are tanking the market before it can begin because the illicit market is already selling on the streets, and it’s not taxed,” said Joseph Davidson, CEO of Nevada-based cannabis consulting firm Qanvus. “I’m walking through New York now, and I’m smelling weed!”

Recreational marijuana was legalized as part of last year’s budget process, but the law failed to establish an enforcement mechanism to crack down on the blazing black-market trade.

Although unlicensed shops still can’t sell or “gift” cannabis, illegal pot products have been getting passed around the city like a blunt circle, making for stiff competition for the soon-to-open legal sellers.

“It’s backwards the way they are rolling it out and I think it’s short sighted,” Davidson told The Post. “If I was a business person, I wouldn’t invest in the retail market here.”

The black market is even growing like a weed in tidier neighborhoods – such as Kew Gardens, Queens – where a Post reporter easily purchased gummies and other smokeable products on Saturday evening. 

The reporter bought “premium cannabis flower” described as “The Runtz” and “Krazy Runtz” as a two package deal at Triangle Dreams located at 82-64 Austin Street. The store employee showed the weed in display glass containers, before ringing it up for $70 cash.

The scribe then bought cannabis-infused “Cotton Cluster” gummies for $25 in cash from Lefferts Exotics at 81-27 Lefferts Blvd. The display package described the contents having 10 mg of THC for each gummy and 100 mg for a bag of 10.

Another reporter went to NYC Convenience at 40 Exchange Place in Lower Manhattan, where he bought two pre-rolled joints. He paid $15.60 per stick with a credit card. The receipt left the items unlisted.

The marijuana dispensary licenses set to be handed out Monday are part of a group of up to 36 initial approvals.

Up to 150 licenses will eventually doled out — all to New Yorkers previously convicted for marijuana offenses. The delay in handing out all of the expected licenses stems from a recent federal-court injunction temporarily blocking licenses from being awarded in parts of the state.

A NYPD spokesman said that although the department and NYC Sheriff’s Office have been shutting down weed trucks peddling product, the law makes it tough to effectively police stores.

“The law, as currently written, does not provide an enforcement mechanism when an unlicensed establishment displays cannabis for sale,” told The Post in a statement, when asked about the department’s efforts to crack down on violators.

“The law only provides an enforcement mechanism if an actual sale is observed, and even then, the penalties are limited due to issues with the law as written,” the statement said. “Furthermore, the state law does not provide the NYPD with a mechanism to close down unlicensed establishments.”

State Sen. Diane Savino (D-Brooklyn/Staten Island) said the Legislature needs to amend the law so the state, local governments and police agencies can penalize bad actors with either higher fines or permanent bans. 

“The problem is, we have a consumer that is quite comfortable now going into a store, a bodega, a smoke shop that has products on display that are attractive and catch your eye,”  said Savino, who sponsored the bill that set up New York’s medical marijuana program, told The Post. 

“They don’t have to produce any documentation, share their data with any agency or anybody – how is a legal license holder supposed to compete with that?”

City Councilman Bob Holden (D-Queens) told The Post his office is flooded with complaints from small business owners complaining lack of enforcement is bad for business – and government intervention is needed.

“What is the point of fulfilling the obligations of bureaucratic paperwork, paying thousands of dollars for a license, and potentially hiring a lawyer to see you through the process, only to lose out to your competition that sells cannabis illegally?” he wrote in a letter obtained by The Post, sent to Gov. Kathy Hochul and Mayor Eric Adams pleading for beefed up regulations.

“Illegal drug dealers used to be in back alleys. Now they are given a storefront and are exempt from taxes.”

The spokesman for the state Office of Cannabis Management said it was “excited to submit the first retail dispensary license applications for stores that will be owned by those with a cannabis conviction, or family members of those with a cannabis conviction, along with nonprofit organizations intentionally serving justice involved individuals and communities.”

“These individuals and nonprofits will be considered by the Cannabis Control Board at their November 21^stmeeting. If the Board approves, retail dispensary licensees will be able to move forward with their businesses and prepare for sales before the end of the year,” said spokesman Freeman Klopott in a statement.

Klopott added that “There cannot be a legal, regulated market operating side-by-side with an illegal market.”

“From the Town of Cheektowaga to New York City, OCM and law enforcement agencies have worked together to try and stop illegal activity throughout the State,” the statement said. “These efforts have included the seizure of products, the issuance of cease and desist letters, and removal of trucks used for the illicit sale of cannabis and we will continue to enforce the law to end their operations.”