Technically speaking, New York’s cannabis regulators consider any person or business selling, gifting or exchanging cannabis as unlicensed and illegal. The state is now actively trying to snuff out the gray market operators because they view it as a threat to the legal industry that should be up and running by the beginning of 2023.
There is also a lot at stake: New York is projected to become the nation’s second-largest legal cannabis market after California with an estimated $4.2 billion market within five years.
In early February, the New York State Office of Cannabis Management sent cease-and-desist letters to dozens of gray market operators across the state, threatening that if they don’t shut down, they won’t be eligible for a license—and might be on the hook for criminal charges. “These violators must stop their activity immediately, or face the consequences,” Cannabis Control Board Chair Tremaine Wright said in a statement.
But most pot entrepreneurs haven’t heeded the warning and even more unlicensed shops have opened up. The cops aren’t conducting raids and the state’s prosecutors aren’t willing to go after these operators because there is enough of a gray area in the law to give the gray market legal cover. And now State Senator Diane Savino (D-Staten Island and Brooklyn) is setting out to take down the gray market with a new bill introduced last month that, if passed would explicitly make it illegal to sell, gift, transfer, or trade cannabis without a license.