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This guest column is from Paula Collins, EA, Esq., a tax attorney dedicated to the cannabis industry and a co-founder of the NY Consortium of Cannabis Accountants. She can be contacted at paula@paulacollinslaw.com. The views and opinions expressed in this article are those of the author, and do not necessarily reflect the views or positions of NY Cannabis Insider.
While most of us have had our attention diverted to the Fiore lawsuit, the change in the hemp regulations, and the letter that recommends rescheduling marijuana from Schedule I to Schedule III, New York City Council has been busy enacting rules to fine landlords $10,000 when they “knowingly” lease commercial space to unlicensed cannabis shops. I added the quotation marks.
Determining the level of how “knowingly” a landlord leased commercial space is certain to keep lawyers and judges busy during a hearing or litigation.
I was glad to see that the NY City Council finally acknowledged that there are approximately 8,000 unlicensed cannabis retailers in NYC. It is vital for everyone, regardless of whether they think the shops are reality or a garish blight, to realize that the numbers are high. (Double meaning intended.)
The numbers do not include the independent weed dealers who do not have brick-and-mortar stores, nor does it include internet-based operations, such as delivery businesses. It also does not account for cannabis retailers who go undetected because their storefront says they do something else. For example if a coffee shop seemed to be a coffee shop, but everyone in the neighborhood knew that they could go there and buy weed, it would be a sort of unlicensed cannabis retailer, but it probably would not be included in that number. (This is a hypothetical; please do not go and raid the coffee shops!)
Before we get too far into this analysis let me make clear: not a single one of the 36,207 unlicensed cannabis businesses in New York State caused OCM to delay processing license applications (back in the day when they could do such a thing. Nope. OCM’s slow roll out is on them).
Here are my numbers:
There are 2300 city blocks in Manhattan, running on a grid from around 14th Street and up.
Not every block has a weed shop, but some blocks have four to five. We will go with 2300.
For the sake of this discussion, let’s multiply the Manhattan number of 2300 by 70% for each of the other four boroughs. Doing so will provide us with rough, working figures, even though Staten Island’s population of 491,000 pales in comparison to the population of Brooklyn at 2.6 million.
Here is how it looks: 2300 shops x 70% x four boroughs for a total of 6440 shops, added to the 2300 of Manhattan, for a total of 8740 smoke shops in NYC alone.
2300 + .70(2300+2300+2300+2300) = 8740
That’s just NYC. If you raided three per day, it would take 2,913 days to hit them all at least one time. That’s close to eight years, working seven days a week.
In New York, there are 62 cities, 932 towns, and 553 villages. Conservatively, let’s use these numbers: each city has 20 shops (subtotal 1,240), each town has two shops, (subtotal 1,864), and every other village has a shop, rounded to 225. Note: In my opinion, these are very conservative figures. For example, Buffalo has at least 30 shops, according to a Yelp search.
If we add NYC’s 8740 to the conservative estimates from the rest of the state, we get this: 8740 + 1240+ 1864 + 225 = 12,069 unlicensed pot shops in the Empire State.
There are the shops that don’t advertise as selling weed, and the independent operators.
Then there are the manufacturers and processors. How many people do we know who make gummies or infused goods and sell them? How many unlicensed grow operations are there in New York State? Remember: unlicensed cannabis activity is not limited to retail operations.
Triple that number 12,069 that I quoted above, and we arrive at 36,207 unlicensed cannabis businesses in New York State.
Enforcement officers will be busy for a very long time.