MW New York padlocks 207 illegal pot stores as licensed sellers gain traction

By Steve Gelsi

State gears up actions against illicit cannabis stores with the total count of legal shops in N.Y. now at 307

New York's Office of Cannabis Management has sealed and padlocked 207 unlicensed cannabis stores as the number of legally operated stores continues to climb, MarketWatch has learned.

With 307 legal shops now operating in New York, the state is on track to reach more than $1 billion in sales in 2025 based on its $110 million in retail sales in January alone. In 2024, New York's estimated cannabis revenue was $1 billion.

The state doesn't have a figure for the number of illegal shops still operating, a spokesperson said.

Including the 307 now open, the state has issued a total of 558 retail licenses.

The state's legal cannabis business is reaching scale some four years after the legislature made New York the 15th state in the U.S. to allow recreational sales of cannabis. Since then, the number of states allowing adult-use of cannabis has grown to 24.

Once criminal penalties for adult use went away in 2021, New York City's underground cannabis business moved quickly into retail sales, while the legal market struggled to get going.

But over time the state has awarded more permits and license holders put together enough capital to open stores and compete with the illegal stores.

As tax revenue from legal sales started coming in, the state has managed to bulk up its enforcement actions against illegal shops.

Earlier this month, New York Attorney General Leticia James said she got a $6 million judgment against Big Chief Smoke Shop, an unlicensed cannabis retailer in Brooklyn, after the store allegedly sold pot for more than a year without a license. The store was shut down in December.

In May, Gov. Kathy Hochul and James won a court decision to impose a $15.2 million fine against the owner of I'm Stuck, an unlicensed business that had six illicit cannabis shops in upstate New York.

Publicly traded companies with exposure to the New York cannabis market include Green Thumb Industries Inc. (GTBIF), Fluent Corp. (formerly Cansortium) (CNTMF), Cannabist Co. (CBSTF), Curaleaf Holdings (CURLF) and Cresco Labs (CRLBF), as well as the privately held Pharmacann.

The Office of Cannabis Management reported $80.2 million in tax, fee and fine revenue from cannabis in the state's 2023-24 fiscal year.

-Steve Gelsi

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February 26, 2025 14:25 ET (19:25 GMT)

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