Acting on New York’s illegal cannabis market
credit to AP Photo/Julia Nikhinson
One of the promises of cannabis legalization was the creation of a safe drug market, yet retailers who offer unsafe products still wrongly dominate the city’s cannabis market.
Before legal dispensaries were opened in New York, these gray-market shops popped up as New York’s own homegrown quirky way of legalizing the drug, almost as a protest of New York’s cannabis laws, taxes and strict regulations. These shops do not follow the same safety regulations as their competing legal dispensaries, leaving consumers exposed to dangerous products.
Many people shop at unsafe dispensaries without realizing that they are illegal. Some of these shops impersonate legal businesses, which effectively fools people into purchasing these illegal and unregulated products. For instance, the inside of Empire Cannabis Clubs looks like the inside of an Apple store, with its shiny white countertops and glass cases displaying products. Generally, people are more aware of the safety risks when purchasing cannabis from a street dealer, but these shops have an easier time tricking people.
While these illegal operations are slow to be shut down, not enough is being done to incentivize people to opt for legal cannabis. Even people who know which dispensaries are legal often choose illegal shops because of product cost and quality. The rollout of legal dispensaries has been underwhelming and unsuccessful as they often offer overpriced products, leading to low sales.
At legal dispensaries such as Housing Works in Manhattan, an eighth of an ounce of cannabis flower can go for as much as $50, when illegal operations often sell the same amount for less than half that price. Along with the pricing, there is also the convenience of the illegal retailers. Currently, there are only five legal dispensaries in New York City, while earlier this year, Sheriff Anthony Miranda said that authorities were investigating over 1,400 illegal shops.
New York State has absolutely failed to follow through with its promise of a robust cannabis market, which would have pushed people away from illegal sales. The small number of retailers, slow openings and lofty taxes makes it difficult for the legal market to take off. While more dispensaries have been approved, the process for their opening has been tedious and delayed.
More needs to be done to urge people to shop at legal dispensaries, and this may need to come with lower taxes. While a lower tax on cannabis would result in less revenue in the short term, it would help capture more customers and sales would increase as the illegal market loses strength.
These problems seem to be unique to cannabis as a newly regulated industry because of the robust market before its legalization. If more illegal operations shut down and more legal dispensaries open with affordable prices, then people won’t choose to buy unsafe cannabis. Cannabis users should not have to be unsure of the safety and validity of the cannabis retailers in the city and of the safety of the products they are buying.
More steps need to be taken to make the cannabis market operate like any other regulated industry. For example, alcohol isn’t taxed to the point that people buy bacteria-contaminated products from illegal sources; if it was, we would still have speakeasies lining the city streets.
When restaurants fail their safety inspections, they get shut down; why aren’t unsafe cannabis retailers shut down as easily? Consumers want markets free of bad actors, impersonators and unsafe products; what makes the cannabis market any different?
