The cannabis industry is on edge as it waits to see how the federal government acts.  On one side is the slow moving Biden/Harris administration and the Drug Enforcement Administration (DEA) slow walking rescheduling. The DEA is having to wade through overwhelming positive support for fellow agencies and the general public. On the other side, House Speaker Mike Johnson (R-LA) has allowed groups from his party to protest and try to stop the process and issuing statements on the dangers of marijuana. Coupled with a mess in California and a significant drop in investment in the industry as everyone waits the outcome, things are tough. But there are positive signs for NY legal marijuana.

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New York was one track to be the biggest single market perhaps in the word in the when they approved recreational marijuana. But a last minute major overhaul of the process a few weeks before it rolled out ended in a massive chaos. January 2023 launch the first legal store, but at year end there were roughly 25 legal dispensaries and ultimately 2,800 illicit ones in the Empire State. While consumers may or may not have known or cared about the legality of where they shopped, they should. The products in the stores are unregulated, which is a strong health issue as ingredients and dosage could vary significantly.

Joe Hodas, President of Wana shared “Wana’s entry in the New York market has been a move that’s been in the works for quite some time. We’ve already established a strong presence in over 20 stores, including The Travel Agency and Housing Works. Orders are rolling in and more locations will be coming online soon. While our initial focus is on the New York City area, we’re working on expansion into upstate as well. We believe New York will be one of the most important states on the map for us and we are excited to get more products into the hands of New Yorkers and all those who visit from around the world.”

When asked about why enter the NY market now, Hodas responded.

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“The Travel Agency is thrilled to partner with Wana in this vibrant New York cannabis market, that we’ve helped grow since its launch. Wana is also one of this industry’s pioneers, building their business through consistent products and the exploration of new formats and flavors. We look forward to collaborating with Wana in providing New Yorkers with safe, high-quality cannabis experience.” stated Paul Yau, The Travel Agency, Co-Founder and CEO. One of the larger, legal dispensary brand in NYC.

Most people follow the law without even thinking – which has been good for people and marijuana 

Over 50% of the country has access to legal cannabis. Veterans, patients, and everyday people have access to a product which helps medical or provide for some fun. The mood and perception of the country has changed dramatically since legalization and now some 85+% of the country believe it should be legal in some form.  It is no longer a taboo in most of the US and definitely not in Canada. And there is some interesting research about how people are reacting to legal weed.

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Prohibition was a great experiment which not only annoyed the general population, but also taught people how to break the laws.  The US, Canada, Finland and Iceland all made alcohol illegal and they had a portion of the population set aside the law and try to figure out how to get booze.  The experiment ended, just as the marijuana prohibition will end at some point. And already you are seeing a BIG change of behavior with average consumers.

As legal dispensaries take root, the public seeings them as another legitimate retailers, except in New York where illicit stores have outnumber legal ones 10 to 1.  NuggMD< According to according to a new poll conducted by the cannabis telehealth platform NuggMD, a cannabis Telehealth platform funded a study about purchasing habit. In legal market 77% of people buy all or most of their cannabis from regulated stores. And, important for law enforcement, only 6% said they get none of their marijuana from legal stores.

From a consumer standpoint, this is important because the product have gone through testing and are also legal and, most, have exactly what is on the the label.  Wana Brands, one of the largest products companies held off entering the NYC market until they began correcting the mess. The public is more comfortable in a proper setting where there is little worry or surprise.

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Another change due to legalization is with Boomers. The generation which first embraced marijuana has begun reconnecting.  Having be frightened by the zealous War on Drugs, most moved away out of fear of breaking the law. But with the changes, they have started consuming again. And the surprise is Boomer are using it for health benefits.  They state it is good for inflammation, chronic pain, difficulty sleeping and more.

And, as Gen Z has entered adult, they have been in an era where marijuana has been legal. They have also helped lead the trend of California Sober where people have quit alcohol and only use weed.  Science has shown marijuana is a much better alternative them alcohol which can have some serious impact on the body.

New York is one of the signature cities in the world. The marijuana industry sees it as one of the top global markets. The state government had a strong plan to roll out recreational  and changed in within a few weeks of launch. Chaos ensued and the issuing of licenses basically became a trickle.  But is New York finally getting its marijuana act together?

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The chaos allowed around 2,000 illicit dispensaries to open in the state, with around 2,500 in greater New York City. There were even unlicensed retailers within 3 blocks of NYC’s iconic City Hall. After trying to force landlords to shutter the stores and then begging social media companies to unplatform them, the government had to act. The state legislature passed new laws to crack down on the unsanctioned shops. Previously, the city’s power to step in had been limited and the legal market was bogged down in red tape.

The state is proud they have closed roughly 1,000 illicit stores in the state with over 750 NYC alone. Over 41,000 violations have been issued, totally $65,671,487 in penalties. The city estimates it has already seized a total value of $41,443,792 in products, whose fate remains unclear.

In an added complication, it seems part of the products sold came from the California black market. The closures could benefit the Golden State’s efforts to wrangle their mess. The Empire State has less than 200 retailers so this can be a huge boom for them. The illicit market was very profitable in NYC, with some estimates of $1.5 billion in sales in 2023.

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Andrew Cooper, Chair of hte Cannabis & Psychedelics Practice Group at NY headquartered Falcon Rappaport & Berkman LLP had a comment on it. “There is no doubt that the current initiatives which have been implemented to shut down illicit cannabis operations as part of the newly enacted budget have been an overwhelming success with over 230 illegal cannabis stores padlocked and over 6,000 pounds of illicit product valued at $22 million seized since May 21, 2024. In the 10 weeks since enforcement actions began, regulated cannabis sales are up 72 percent in New York City with retailers collectively reporting $2.6 million in weekly revenue growth over the same period. This puts New York on pace to sell $520M of Cannabis in 2024, with some people suggesting that it could break $700M.”

 “Because the sheriff’s office can now enter and inspect businesses without a court order, it’s able to quickly raid retail stores and seize products. Unfortunately, legal CBD and Hemp stores who, arguably, are not selling illegal weed have been getting caught up in these raids as well.  In many instances, Sheriff’s deputies and NYPD officers, many of whom are wholly unfamiliar with the relevant regulations including the fact that CBD and Hemp can be sold with the appropriate license, still confiscate legal products and arrest shop owners” continued Cooper.

Governor Kathy Hochul and Mayor Eric Adams celebrated the success of the crackdown on Wednesday.

“In the three months since launching ‘Operation Padlock to Protect,’ our administration has delivered major results on a major quality of life and public safety issue,” Adams said. “For too long, illegal shops have contributed to a feeling that anything goes on our streets.”

Is New York finally getting its marijuana act together, the industry is certainly hoping it is.