Move over, Giuliani: how loopholes sparked a golden age of cannabis in New York
For the past few months, anyone visiting Katz’s Deli in the Lower East Side of Manhattan – as famous for its role in When Harry Met Sally as it is for pastrami – has queued near a greenpainted food truck, strategically parked on Houston Street to capture Katz’s foot traffic, adorned with multi-colored LED signage advertising the city’s latest hot delicacy: cannabis.
Passersby can stroll up to the truck’s sales window and peek at a menu written in marker on a white dry-erase board and ask to see and smell a sample before forking over $60 cash for 3.5 grams, the cannabis industry’s standard serving size.
Business is so good that in addition to the truck here and the others outside a Trader Joe’s in Brooklyn and a major subway transfer in the Upper West Side, the Green Truck recently opened an eighth location, a block away from Grand Central. Though none of this is technically legal – even if the $60 is legally a “donation”, as the boredlooking man running the truck explains – nobody cares enough to intervene. On a recent visit to Katz’s, an NYPD police car was parked behind the Green Truck, where “donations” or sales, whichever, continued as if police did not exist.
Marijuana possession and consumption is legal in New York state for adults 21 and over and has been for almost a year. But the way New York has gone about legalization has been very different from states like California. There are strong social-justice provisions and guarantees to reserve cannabis retail opportunities for minorities and others most harmed by the country’s decades-long drug war.
New York’s legalization law, the Marijuana Regulation and Taxation Act, or MRTA, is one of the most progressive legalization laws in the country. New York is also considered the next big prize for the country’s fledgling cannabis industry, which recorded $40bn in legal sales in 2021, according to BofA Securities research. Projections vary, but New York’s appetite for cannabis is projected to be worth between $3.7bn and $5.8bn within five years.
Since New Yorkers are allowed to smoke cannabis anywhere tobacco can be smoked – a privilege not enjoyed by Californians, who risk a ticket for that act – it’s also the most permissive legalization law in the country. This all adds up to a nearly unthinkable transformation for New York, a city that under Mayor Rudy Giuliani became the worldwide capital for petty marijuana arrests.
The state won’t issue the first sales licenses until this fall but in the meantime, an enormous, unregulated, and technically illegal “gray market” has emerged to fulfill demand.
In short, it’s never been easier to find and purchase weed in New York City – and it has never been less risky to sell it.
“It’s crazy. It’s a dream,” said Milton Washington, who has sold cannabis for most of the past 15 years and lives in Washington Heights in upper Manhattan, where he plans to transition his current “if you know, you know”-style cannabis speakeasy to a legal, licensed consumption lounge. Along with sommelier-level curation, the lounge will host a cannabis-centric and “unapologetically Black” fitnessand-wellness exercise he calls “Rokmil”.
But, for the moment, running his business as-is – out of a beautiful 19thcentury brownstone where, the night before our interview, he hosted a fundraiser for the Louisiana US Senate candidate Gary Chambers, Jr – is “nearly risk free”, he added in between puffs of a sativa-dominant preroll he described as “perfect for conversation”.
Increasingly competitive delivery services paste QR-code activated menus on bus stops, bike-shares, and subway ads, with discounted and even free weed to entice new customers or referrals. There are cannabis popup events or “seshes” almost every night of the week. Upscale restaurants advertise cannabis-infused dinners or brunches. Members-only clubs and lounges advertise memberships and screen applicants on Instagram. “Smoke shops” openly selling cannabis are popping up to fill previously empty retail space in the outer boroughs. And a few extremely outré merchants, such as the Green Truck and Empire Cannabis Clubs, the latter of which operates two well-advertised storefronts, in Chelsea and in the Lower East Side, advertise online and solicit walk-in customers.
Many of these entrepreneurs started cannabis brands or resorted to selling it during the pandemic. Some are refugees from other states, squeezed out by limited licensing, high taxes and permit fees, and the plunging price of wholesale cannabis, giving it another go in Gotham.
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During the week, Jackie Conroy works as a nutritionist in a charter school. On Sundays and on Wednesday evenings, she puts on a flattering black dress and adopts her alter ego, the Cannawitch, to work the dab bar at High Garden, a brunch-andlounge event that serves cannabis-infused cocktails and food, of which she is a founding partner.
Legalization hit New York at an ideal time. “People stopped getting scared, and at the end of Covid [restrictions], they wanted to be out,” Conroy said on a recent Sunday in High Garden’s bright and airy space. In Harlem, where Conroy lives, almost overnight, “it went from cop presence all the time to no cop presence,” she said.
Though this libertarian fantasy is preferable to authoritarian drug-war hard-lining, “we don’t want weed trucks on every corner”, she said. Regulations and the law will correct that within two or three years, she guessed. Still, Conroy can’t fault the gray marketeers’ hustle. “There’s no ceiling at the moment” to the cannabis industry in New York, she noted.
The state is well aware of what’s going on and is not happy about it. But absent a draconian police crackdown that observers agree would be profoundly unpopular, there isn’t much that can be done. Sales of three ounces or less is a violation akin to a traffic ticket, punishable only by a $250 fine, stakes so low that the New York police department is not bothering to get involved. Asked for comment or data on how many violations have been issued, a police spokesperson cut and pasted the text of the legalization law into an email and did not respond to further questions.
The state office of cannabis management has sent out 52 ceaseand-desist letters to sellers violating the law, according to the OCM spokesperson Freeman Klopott. It’s understood that letter recipients jeopardize their chances of securing a license.
“We encourage New Yorkers not to partake in illicit sales,” said Klopott, who stressed that sales are “illegal … and we will work with our partners to enforce the law”.
If that isn’t deterrent enough, Klopott struck a social-responsibility note and offered a reminder that the $200m in state funding promised by Governor Kathy Hochul to Black and brown “equity” business applicants is paid for by legal cannabis licenses. “Illegal operations,” he wrote in an email, “undermine our ability to do that.”
Klopott declined to say who had received a letter or where the letters have been sent, but it’s clear they have had a limited effect.
Several people interviewed for this article asked not to have their last names used or to reveal the name or location of their business; after giving interviews to Forbes, neither the Green Truck nor Empire Cannabis Club responded to requests for comment.
But according to my interviews with more than a dozen growers, bakers, sellers and other underground entrepreneurs, many others feel stuck. Either you risk a future license by building a brand and a following now, or you sit back and wait for a permit – and risk losing everything to the “Chads and Brads”, or the well-capitalized white entrepreneurs with no cannabis background but traditional business acumen and political connections, who have executed what amounts to a hostile takeover of the cannabis industry in other states, according to Luis Cantillo and Byron Bronson, the co-founders of Buddy’s Bodega.
“That’s exactly what happened in Washington: all these ex-Microsoft executives, who didn’t put any energy in during the medical [cannabis] period, as soon as they had the capability, jumped in to go heavy and killed off a lot of peoples’ income,” Bronson said.
Not everyone currently selling weed is happy with the gray market. Born in Guyana and raised in Canarsie, a predominantly West Indian neighborhood in far south- western Brooklyn – and one of the Black areas of New York that helped elect Mayor Eric Adams, a former police officer – Floyd Jarvis was arrested for marijuana and did time in state prison before studying critical theory, specifically a discipline he calls Black masculinist studies, at the New
School.
Now, Jarvis is starting a non-profit, Ganja War Veterans for Equity, and is planning to pursue a license in the legal market. Jarvis and other legacy market operators “look at this gray market a little bit different”, he says.
In the past, as scholars like the former John Jay College of Criminal Justice professor Ansley Hamid have documented, people from marginalized communities such as Rastafari in Canarsie would sell cannabis out of economic necessity. The profits were reinvested back into their communities, funding schools, healthfood restaurants, and other community-serving businesses.
Since legalization, those legacy sellers have been displaced by outsiders, such as the strangers opening up “smoke shops” that sell sketchy weed to anyone, including children, Jarvis said, and export whatever proceeds are made somewhere else.
“I want to make a clear distinction between the legacy market operators and the Johnny-come-latelies who are using predatory tactics,” Jarvis said. “That’s who’s opening up these smoke shops: people who have never sold weed a day in their lives.” If they went out of business tomorrow, Jarvis would celebrate. “Fuck out of here,” he said.
The disdain and tension in Canarsie is felt elsewhere in the city. There is a feeling that this is a fleeting moment in time, and that the other shoe is going to drop before too long – a sort of postProhibition “Roaring 20s” of weed.
“It is fascinating, and it’s very trippy for a lot of New Yorkers that have been here a long time,” Ryan Lepore, who works as the director of business development for PrestoDoctor, a company that arranges medical-cannabis recommendations online. Lepore sold cannabis in his teens and 20s and has been arrested for it.
“You’re seeing people who aren’t from New York coming into New York to make as much money as possible,” he said, predicting that once licenses are handed out, the state would crack down on those that don’t have them. Weed trucks and weed-selling smoke shops couldn’t last for ever. “The law’s not on their side to do that,” he said. “This is a blip in time.”