New Yorkers have been buying legal weed for over a year but regulated dispensaries are stuck in unfair competition with illicit shops. Governor Kathy Hochul enacted Operation Padlock and Protect, with help from law enforcement and elected officials, to combat the issue. Today, the lot announced great success in the last few months.
“We must padlock these places to protect the people of this city and send a clear message that you are not going to peddle your illegal items on our community residents and destroy the legal market,” New York City Mayor Eric Adams said at the press conference.
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Each speaker circled the same issues with illicit sales: advertising targets children, products containing unsafe additives, and lost sales from the regulated industry. Before the SMOKEOUT Act, legislation that informed the operation, law enforcement would close unregulated shops only to see them open again the following day. This legislation allowed for the padlocking and shutting down of these businesses for good.
Brass tacks of Operation Padlock to Protect
Gov. Hochul, Mayor Adams, and a handful of law enforcement officers and representatives gathered to provide updates on the operation at a July 31st press conference. Speaker after speaker touted the successes of the initiatives which is snuffing out illicit weed shops in record numbers.
Mayor Adams reported that $41M in unregulated products have been seized since the operation began. A total of $65M in fines have been stacked against illicit shops since May. NYC Sheriff Anthony Miranda reported that in three months, New York law enforcement has conducted 3000 inspections, issued 900 cease and desist orders to unregulated stores, sealed 700 storefronts with padlocks, and taken 7000 pounds of weed off the streets.
Miranda explained that the products they are seizing are often sprayed with substances that elicit a different high than classic ganja.
The products targeting children with cartoon and video game-themed packaging drew a majority of ire. These marketing tactics are prohibited in the legal New York weed industry. Licensed retail stores were also cited as winning as a result of these efforts after months of struggling.
Regulated dispensary sales are trending up
The cards seemed stacked against many licensed retailers and cultivators, and they jumped through regulatory hoops, paid fees, and contributed taxes that unregulated stores did not. This good faith move against unlicensed retailers signals that the government is behind those following their guidelines.
Hochul rattled off that one unnamed licensed store reported a 100 percent sales increase, and another woman retail owner the governor left unnamed saw 3000 percent more sales since the operation’s start.
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Jeremy Rivera, co-founder of Terp Bros cannabis dispensary in Astoria, confirmed with GreenState that sales and foot traffic started trending up as padlocks went on.
“The first month of the starting of the closures, we seen in Astoria an 18-20 percent increase,” Rivera told GreenState, “Now, we’re already at another 20 percent from the next month, so these last three months have been incrementally growing month after month. Some of it has to do with it being summer time, a lot of it has to do with closures.”
Rivera also shared that colleagues in Manhattan have seen 20 to 30 percent month-over-month sales increases since padlocking started in May.
A bounty of new customers who shifted into the regulated market from the operation is identified by their expectation to pay with a credit card and receive other services not permitted in the regulated market. Helping these consumers adjust has created a new workflow–but Rivera is thankful for the new clientele.
Now that Operation Padlock to Protect is making headway, the focus will move to landlords renting to illicit stores and operations. After consultation with the NYPD, Adams’ camp believes holding participating actors like landlords accountable is the logical next step in their efforts.
Agencies are also keyed on collecting the millions in fines accrued by bad weed actors in the last few months. The Mayor cited arrogance when asked why operators aren’t paying the fines and shared, “We intend to collect every dollar.”
Keeping New Yorkers and their children safe was at the forefront of today’s Operation Padlock to Protect press conference. Another benefit of the efforts is record high sales among licensed retailers. This update lays another brick in a wall of unexpected precedents set by New York state as it navigates its nascent weed industry.
