Jars of cannabis from Green Essentials health and wellness dispensary are tested for THC during a June inspection by state Office of Cannabis Management investigators. (Will Waldron/Times Union)
Will Waldron/Times Union
ALBANY — After years in which illicit cannabis shops’ untaxed and unregulated products decimated the economic hopes of legal retailers, New York’s war on outlaw dealers is finally gaining ground.
But according to interviews with industry stakeholders and officials with the state Office of Cannabis Management, the scope of that success can be regional.
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A padlock and notice from the New York Office of Cannabis Management are seen on Imperial Mart on Lark Street in Albany after investigators cited the bodega for selling unlicensed cannabis products. (Will Waldron/Times Union)
Will Waldron/Times Union
Notices like this one on Imperial Mart on Lark Street in Albany, steps from a licensed marijuana shop, are being posted more frequently as the state Office of Cannabis Management seeks to increase its enforcement against illicit shops. (Will Waldron/Times Union)
Will Waldron/Times Union
New York Office of Cannabis Management investigators conduct an inspection of Green Essentials health and wellness dispensary on Route 30 in Mayfield in June. Investigators said the store was selling unlicensed cannabis products containing THC. (Will Waldron/Times Union)
Will Waldron/Times Union
New York Office of Cannabis Management investigators review paperwork at a shop they accused of selling unregulated cannabis products. (Will Waldron/Times Union)
Will Waldron/Times Union
A state Office of Cannabis Management investigator examines retail products at Green Essentials health and wellness dispensary. Investigators said the store was selling unlicensed cannabis products containing THC. (Will Waldron/Times Union)
Will Waldron/Times Union
New York Office of Cannabis Management investigators analyze cannabis samples for THC during an inspection of an unlicensed shop in Mayfield in June. Investigators said the store was selling unlicensed cannabis products containing THC. (Will Waldron/Times Union)
Will Waldron/Times Union
New York Office of Cannabis Management investigators analyze cannabis samples for THC during an inspection of Green Essentials health and wellness dispensary on Route 30 in Mayfield. Investigators said the store was selling unlicensed cannabis products containing THC. (Will Waldron/Times Union)
Will Waldron/Times Union
A jat of cannabis from Green Essentials health and wellness dispensary is tested for THC during an inspection by New York Office of Cannabis Management investigators. (Will Waldron/Times Union)
Will Waldron/Times Union
The Green Essentials health and wellness dispensary, which regulators said was not licensed to sell cannabis products, was padlocked in June following an inspection by state Office of Cannabis Management investigators. (Will Waldron/Times Union)
Will Waldron/Times Union
Signage for Green Essentials health and wellness dispensary is seen Wednesday, June 24, 2026, on Route 30 in Mayfield, N.Y. New York Office of Cannabis Management investigators conducted an inspection of the store, which they said was selling unlicensed cannabis products containing THC. (Will Waldron/Times Union)
Will Waldron/Times Union
But in New York City, where illegal shops have flooded the marketplace since marijuana was legalized by the state five years ago, licensed retailers said they are continuing to struggle to compete with the unregulated proprietors — who often quickly reopen after their storefronts are raided by law enforcement with little fear of the potential civil penalties they may face.
Still, there has been a recent shift in enforcement in New York City, where the Office of Cannabis Management has recently begun to conduct more investigations across that metropolitan area, including in the Bronx. And while the parallel enforcement efforts of police agencies across the five boroughs has largely been handled by the New York City Sheriff’s Office — the city’s primary civil law enforcement agency — some precincts in the New York City Police Department are sporadically stepping up investigations to shut down illicit shops.
In the Capital Region, “I think it’s becoming much more difficult to find illicit retail shops,” said Daniel G. Haughney, director of enforcement and investigations for the Office of Cannabis Management.
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Haughney recently invited the Times Union to do a ride-along with his enforcement unit. It began in the city of Troy, where the inspection of a bodega that had been the subject of community complaints for allegedly selling marijuana to people under 21 turned out to be a dead end. Although the investigators found four marijuana cigarettes behind the counter of the corner store, that was arguably a “personal use” quantity and not enough to justify an enforcement action, Haughney said.
Jars of cannabis buds are displayed inside Green Essentials health and wellness dispensary during an inspection by state Office of Cannabis Management investigators. Investigators said the store was selling unlicensed cannabis products containing THC. (Will Waldron/Times Union)
Will Waldron/Times Union
But the next stop, at a purported hemp store on the outskirts of Amsterdam in Montgomery County, yielded a bigger return for the unit. The unlicensed cannabis shop in a small strip mall along Route 30 was openly selling products infused with unlawful amounts of THC, including marijuana buds packed in mason jars on a display counter in a side room.
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As his investigators sifted the store’s products and examined its paperwork, two of them set up a portable table outside to begin testing the seized products with high-performance liquid chromatography equipment that they use to quickly measure the levels of cannabinoids like THC. The results yielded bad news for the shop’s owners: Their cannabis inventory was seized and the state enforcement unit left the scene that afternoon after padlocking the business and posting two conspicuous “Illegal Cannabis Seized” signs on the front of the store.
“I think we’re on the right side of the pendulum with the cannabis industry,” Haughney said. “That (search) was a good one, that’s a good location to close down, but I’m also not upset that the first place (in Troy) that we went to didn’t have anything, because … if they fix it on their own, that saves us work.”
Haughney said that the cannabis enforcement unit had just two investigators when he arrived in February 2022, roughly 10 months after marijuana was legalized in New York. Today, there are nearly 45 investigators in the unit, which conducts inspections and has padlocked hundreds of unlicensed shops from Long Island to Buffalo.
Equipment used to test of THC in cannabis products is used by state Office of Cannabis Management investigators during a June raid of an unlicensed cannabis store in Mayfield. (Will Waldron/Times Union)
Will Waldron/Times Union
During the initial rollout of New York’s retail marijuana market, the effort to make it profitable for licensed operators was greatly impeded by the explosion of illicit marijuana shops across the state. The money being made in the underground market was fueled, in part, by state lawmakers’ decision to immediately legalize marijuana possession when the law was passed in April 2021 — long before the retail market would begin taking shape.
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The boom in illegal shops also was exacerbated by the fact that many law enforcement agencies have been reluctant to target the underground shops or street sales because of the decriminalization of the drug, as well as decades of criticism that marijuana arrests had disproportionately impacted minority communities.
But New York lawmakers who now have embraced a legal cannabis market are pushing for law enforcement agencies to crack down on the industry’s illegal competitors.
‘I could have cried’
Since April 2024, the Office of Cannabis Management has conducted nearly 1,600 inspections, issued nearly 1,200 violation notices and sealed 638 storefronts. By the end of last year, they had seized 32,300 pounds of illicit cannabis that they estimated had a “street value” of more than $143 million.
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But challenges remain, and more than 40% of licensed cannabis retailers are not making a profit, including many who invested their life’s savings into setting up a business.
Along bustling Arthur Avenue in the Belmont neighborhood of the Bronx, David Nicponski has struggled to compete with roughly seven unlicensed cannabis shops that have brazenly operated within three blocks of his store, Freshly Baked NYC.
“There had been very sporadic raids by the New York City Sheriff’s (Office), but honestly, that only matters if they’re done consistently,” Nicponski said. “If you do it one time and slap a poster (up) saying, ‘cannabis seized,’ and then you don’t come back, the shops just left the poster in the window — because that’s great advertising saying, ‘We have pot.’ And, like, that’s so disheartening.”
But he was recently surprised by an unexpected visitor. The Office of Cannabis Management enforcement unit rolled into the neighborhood and began inspecting the unlicensed stores and seizing their cannabis products.
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Daniel G. Haughney, director of enforcement and investigations at the state Office of Cannabis Management, talks about his agency’s efforts to shut down illegal marijuana shops. (Will Waldron/Times Union)
Will Waldron/Times Union
Nicponski said Haughney had “told me once they had eliminated the legal and operational hurdles to New York City enforcement, that he was going to basically make Belmont Bronx the epicenter of state enforcement in the New York City area.”
“I could have cried, because you know that Arthur Avenue business (I own) is … always on the brink due to the (illegal) competition,” Nicponski said. “So seeing that made me like think there’s some hope.”
But his optimism was short-lived. In an interview last week, Nicponski said six of the seven illicit cannabis stores in the neighborhood have already reopened.
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“It’s hard to see how a legal shop can survive under those conditions,” he said.
Nicponski’s second cannabis shop is located in the heart of midtown Manhattan, in the district of state Sen. Liz Krueger, an architect of the 2021 law that legalized marijuana in New York.
He said the illicit competitors in the neighborhood have largely been wiped out because — with the senator’s intervention — supervisors in that particular NYPD precinct have made it a point to use their authority to target any unlicensed marijuana shops.
But “there are plenty of places in Manhattan where there are still lots of (unlicensed) smoke shops,” Nicponski said. “It really seems to depend on a precinct-by-precinct basis whether people have been able to get the precinct captain to make it a priority to assist, and that seems to be really hit-or-miss and inconsistent.”
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Krueger said that when it comes to enforcement efforts against unlicensed cannabis shops, “What happens outside of New York City and what happens in New York City appears to be quite different.”
She said the problem was especially difficult during the administration of former Mayor Eric Adams, who she said did not want the NYPD involved in enforcement efforts against unlicensed cannabis shops.
“No matter how many times you would document illegal stores and you would beg them to go do something about it, it either never happened or it happened where they immediately reopened 10 minutes later, and no one did anything about it,” Krueger said.
The senator said Mayor Zohran Mamdani’s six-month-old administration appears to be making “much more of a commitment to actually going after these guys: getting them closed and then trying to keep them closed.”
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But Krueger added that legal challenges remain, including loopholes and arguably insufficient civil penalties that enable unlicensed operators to quickly reopen after they have been shut down, often at the same location. In some instances, the shops may be accepting the risk of additional law enforcement scrutiny because the civil penalties they face are dwarfed by the profits they are reaping selling unlicensed cannabis.
Krueger said she also intervened in the Bronx neighborhood, where Nicponski and at least one other licensed business on Arthur Avenue had reached out for assistance.
“I was approached by some folks who said, ‘Help — we have licenses, we’re doing everything we’re supposed to be doing, and we can’t compete with all the illegal stores right around us,’” she said. “I set them up in meetings with the NYPD. … I feel like they had a plan to try to go forward to do something, so it sounds like they are doing something; but it’s not enough.”
Haughney, who previously worked in investigative positions at other state agencies, including the Department of Motor Vehicles and the Gaming Commission, said the key may be more aggressively pursuing civil penalties against landlords who rent spaces to illegal marijuana shops and turn a blind eye to what’s unfolding.
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“I think that word has begun to spread within the real estate community, that if you want to take the money from an illicit shop, we’re going to come after you for that as well, so it’s certainly not cost-effective for landlords to rent to an illicit operator,” he said. “I think we’re on the right side of the pendulum within the cannabis industry. And with the illicit side, our focus and enforcement actions that we take will continue.”
He noted that last week, the NYPD arrested a person “in the process of cutting off locks to a sealed illegal dispensary.”
“This was based on great proactive police work,” he said. “For there to be a safe and successful legal cannabis industry in New York, those that choose to operate outside of the legalized market must be shut down.”
And in the Bronx, “For the locations that illegally cut locks and reopen without authorization, we are working with the attorney general to force evictions and hold landlords responsible for allowing illegal conduct on their property.”
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‘Take a deep breath’
There have been other initiatives undertaken by the state to battle the illicit cannabis market, including legislation passed this year that would increase penalties for bad actors.
The state also has begun implementing a statewide “seed-to-sale” tracking system that’s intended to prevent illicit products from infiltrating the licensed market. State lawmakers and Hochul included $10 million in the recently adopted budget to help offset the costs of that system for cultivators, processors and retailers.
Eight months ago, the New York Medical Cannabis Industry Association filed a lawsuit seeking a court order compelling state regulators to “fulfill their legal responsibility to thwart the influx of illicit cannabis product … and to identify and sanction the companies responsible for the illegal ‘inversion’ of out-of-state cannabis products into New York.” (Inversion is the term for introduction of illicit cannabis into the regulated supply chain.)
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The lawsuit was filed in state Supreme Court in November against the Office of Cannabis Management and Jessica Garcia, chairwoman of the state Cannabis Control Board.
It alleged the board and Office of Cannabis Management had disregarded their statutory mandates and “abdicated their responsibility to create a safe, regulated and insular intrastate adult-use cannabis market.”
Last week, in part due to the implementation of the new marijuana tracking system, that lawsuit was discontinued, although the association reserved its right to re-file the case in the future.
The uptick in enforcement, including more coordination with local law enforcement agencies, as well as the proposal to increase penalties and crack down on the inversion of out-of-state cannabis in New York are elements of the state’s larger attempt to recover from the well-documented botched rollout of New York’s legal marketplace — a process plagued with regulatory and administrative missteps, poor decision-making and lackluster communication.
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Krueger, who doesn’t use cannabis but said she didn’t want people who do use it put in jail, said she’s “open to changing the state law to make it work better.”
“Once you dig into cannabis, you just start to take a deep breath: Are we ever going to get it to work?” she said. “I spent five years trying to get the (legalization) bill passed, and now I’ve spent five years trying to make it work correctly.”