More than 30 unregulated weed vendors surround a licensed cannabis dispensary in the Lower East Side — smoking out its business as “confused” customers struggle to differentiate between the two.
The plight of ConBud, which opened in October on Delancey and Orchard Streets, is representative of a citywide problem — with an estimated 1,500 illicit pot shops encroaching on just 16 licensed dispensaries almost three years after recreational marijuana sales were approved by state lawmakers.
“I didn’t think it would be this big of a problem. It’s a lot of competition,” said Coss Marte, a co-founder of ConBud.
“I’m operating in a mature market already.”
Expecting a rush of customers looking for high quality, legal weed, Marte and his partners designed the shop layout to accommodate long queues and heavy foot traffic.
Yet on Tuesday afternoon, the shop had the calm vibe of a designer boutique, not a bustling retail store.
“The clientele base and the community base already felt like it was legalized, and it’s confusing that I now have to market that to the consumer,” said Marte, who was granted one of the first licenses to sell marijuana after serving six years in prison for dealing weed.
“We’ve had to educate the neighborhood and the community,” he added.
The pot proprietor said the state’s social equity gesture to move weed convicts to the front of the regulated line had been somewhat diminished by his illegal competitors, who are not selling regulated and taxed products.
The Post on Thursday counted at least 30 shady shops within about a five minute walk from ConBud.
on Second Ave in Manhattan’s East Village Helayne Seidman
Part of the problem is that some of the unlicensed shops look and operate like legitimate businesses.
Across the street from ConBud, Moz Despensary looks more like a luxury watch store that a bud seller, with fine paintings on the walls and a lounge area with leather bound chairs.
“We’re more of a lifestyle brand than a dispensary,” the clerk said, declining to provide her name to The Post.
When asked if the shop had had trouble with law enforcement, she insisted: “We are fully licensed.”
New York State’s dispensary verification website suggested otherwise.
The line between licensed and unlicensed shops was lost on customers like Phoenix Pinada, who spoke outside “Granny Za’s” on Rivington Street and Orchard.
“I was just looking for dispensaries on Google and found this place. Just from a general perspective, there was no way to tell they were unlicensed,” Pinada said.
But upon closer inspection, the product looked less than dank, he said.
“It definitely seemed like they were selling some things from the black market, some brands I didn’t recognize,” Pinada said. “And I guess once I got inside, it did seem to be operating in a less than professional manner.”
The confusing contrast is especially pronounced in Manhattan, where 10 of the city’s legit dispensaries are located — but often surrounded by scores of outlaw shops, many of them offering cheaper, untested low quality products.
At Housing Works Cannabis Co, a licensed dispensary at Broadway and East Eighth Street on the border of Greenwich Village and the East Village, nine people were cued up to buy weed Wednesday night.
Customers had to go through security and have their IDs scanned before picking out their pot, a process that security workers and customers say should instill confidence in the safety of the store’s products.
“With everything people are putting in weed these days, it’s so much safer to stick to the licensed locations,” one customer said, adding that she had Googled which area stores were regulated.
“There are two very important reasons [people should choose a licensed dispensary],” explained Diesel Cummings, 36, head of security at Housing Works.
“The first one is the priority — the safety reasons,” said Cummings. “These products in the illegal store have not been tested by New York State. Because they have not been tested, no one who is concerned about their safety should be shopping at these stores because things are in some of these products that are very harmful and most people don’t even know.”
“I’ve had customers myself tell me that they went to an illegal shop near their house. And after they smoked something that made their head hurt really much and then I had to go in to show them — what is illegal dispensing and what is not illegal dispensary,” he continued.
“[The other thing] that’s very important — they’re not paying taxes. The law was set a certain way for the legal dispensaries, much like any other business in the state of New York, that is legit —We have to pay taxes,” Cummings stressed.
Gotham Buds is a licensed dispensary in the heart of Harlem, across from the Apollo Theatre on a famed block of West 125th Street.
The area was not as saturated with illicit stores as in downtown Manhattan, and few weed customers were milling about Wednesday, possibly because of heavy rain.
Organic Market, a few blocks away on West 125 Street and Lenox Ave was openly selling marijuana products after authorities had shuttered their store for several months, a clerk said.
A sign hung in the window that stated cannabis had been seized there.
“This changed from a normal deli to a smoke shop. Now it changed to a very suspicious place,” said a customer before heading inside.
Further up the block on either 365 or 367 Malcolm X Blvd, a business that was named “Smoke Shop” also sold weed, with a tube with a few buds going for $20.
That business is just one of an estimated 1,500 stores that are selling weed without a license in New York City, Mayor Eric Adams and New York City Sheriff Anthony Miranda said last year.
New York’s Office of Cannabis Management said this week that agency investigators and the Department of Taxation and Finance inspected 48 shops suspected of selling unlicensed cannabis in December and seized $4.2 million worth of weed products.
In total, officials had seized some $57 million worth of cannabis from stores in the five boroughs since a crackdown was announced last spring.
Last month also saw the first permanent shuttering of a outlaw weed store in the boroughs, the Big Chief Smoke Shop in Bay Ridge, Brooklyn.
The store, located near a Catholic Church, had been shut down repeatedly by officials, but kept reopening until authorities obtained a historic court order.
In Gov. Kathy Hochul’s State of the State address, delivered Tuesday, the Democrat proposed legislation to make it easier for the OCM and local authorities to padlock the city’s throngs of unsanctioned weed vendors.
Under current state law, building owners can be fined $10,000 per day for allowing the unregulated sale of cannabis on their property, or up to $20,000 a day in “egregious” cases.
“As we have said time and time again, the number one remedy for the problem of these illicit shops is getting more legal businesses open,” said OCM Executive Director Chris Alexander in a statement.
That process was stunted by an injunction issued in a lawsuit brought by disabled veterans who claimed they were unfairly left out of getting first dibs on licenses. The suit was settled in November, allowing hundreds of dispensaries that were stuck in legal limbo to move forward.
“When New Yorkers choose to shop at a legal, adult-use dispensary, they know where their products are coming from, that these cannabis products have been tested, and that these small businesses are reinvesting in our communities,” said Alexander.
“We will continue to seize illegal products, and we know that the collaborative work continues across all levels of government to address this public health issue.”
Back on the Lower East Side, ConBud co-owner Marte said his business has been forced to shave 5-or-10% of the price off of their high quality offerings to keep pace with unregulated competitors.
Still, Marte said he doesn’t blame the grey market shop owners.
“They took advantage of a loophole in the system and they’ve been in the market for a couple of years,” he said. “If I was in there midst of it, maybe I would have taken advantage of it, too.”
Sales have also picked up 5% week-over-week, he said, and with a Bronx store in the works, ConBud is set t to become the first licensed dispensary chain citywide.
Cummings, the security leader at Housing Works, cautioned customers to make sure their weed is legit.
“I want to put this out there to every single person in the state of New York. If you look on the front of the dispensary, somewhere on that window on the window to that door, there is a green window shaped logo with a QR code in the middle that says license store or licensed dispensary,” he explained.
“Without that green sticker on that window with that QR code in the center. It is not legal whatsoever,” Cummings said.
“We are still in the infancy of this industry. And if we let it get too out of hand, it’s going to be a problem. Because now all eyes are on New York.”
Additional reporting by Steven Vago