Competing Against an Illegal Landscape

Empire Cannabis, Illegal Shop

In 2016, after having medical cannabis dispensaries throughout the state, California took the final step in making cannabis recreational. Now there are twenty-two states with legalized recreational cannabis sales. At the end of 2023, this will have created almost $32B in revenue and over 500,000 jobs. The Federal Government is killing these companies.

The Federal Government is having a picnic owning cannabinoid patents and profiting from the sales of these patents and taxes. Retailers aren’t paying their bills to their suppliers because they are laden with tax bills. Also, the refusal to repeal 280E that taxes the industry at 70% with zero ability to deduct regular expenses that all other businesses do.

California is a mess. Debt has plagued this industry since the beginning, and it only worsens. It is only a matter of time before thousands of dispensaries close and farmers declare bankruptcy. Finger-pointing should be in one direction, the Federal Government.

Let’s get to NY. There are easily 2000 illegal dispensaries throughout the city. Ask twenty NYers; maybe one will know that Empire, a chain of illicit dispensaries, is illegal. Hochul has signed legislation to go after these stores, fining them $20K a day vs. $250 a day. $20k a day is nothing for some of these largest dispensaries. What are they doing about the heart of the issue, landlords? Words and legislation mean nothing unless they are executed.

Gotham, located at 3E3rd Street, is surrounded by these illegal stores alone. Sweet and Sour Smoke Shop, Puff ‘n Pass, 2nd Avenue Smoke Shop, 2nd Avenue Smoke and Beer, Village Gourmet Smoke Shop, The Goodies Shop, Empire Smoke Shop (one of the worst), Cannabis Dispensary, Potion Dispensary, Royal Leaf Collective Dispensary, Higher Empire, Empire Cannabis Clubs Dispnsary, Hempted NYC, Granny Za’s Weed Marijuana Dispensary, EndoMen, Orchard Street Social Club, Smileys Wellness Shop, Green Apple Cannabis Club, Empire Cannabis Club (note all the Empires), Green Leaf Recreational Cannabis Dispensary, and another Empire Cannabis Club.

Let’s call it what it is, utter bullshit. Getting a dispensary license is not easy. Following all the rules and regulations is not a walk in the park. We are following all the tax laws, much to our disdain, but we are competing with dispensaries that do not pay those taxes, so their products are less expensive, and who knows where those products come from? And few NYers even know these stores are illegal. This is killing the industry just as it is beginning.

Where are the PSAs? Where is the swat team taking down each illegal shop daily? The landlords and all the stores should be fined heavily immediately, not once but every single day. NY State is trying to do the right thing by awarding licenses to previously incarcerated people and non-profits who work in this space. Still, they are not helping them with real estate or finances as promised. What they are doing is continuing something that the Government has participated in for years regarding cannabis, aka systemic racism. Instead of jailing people for cannabis, they will slowly kill license holders with debt and taxes.

Perhaps all the legal stores should put their taxes in escrow until something is done about this. That might wake up the state. All I know is that I watched a cannabis store open directly across the street from a police station, and that says it all.