After three years of fits and starts, the rollout of New York’s recreational cannabis market gained speed in 2024, most notably with the opening of about 50 licensed dispensaries so far this year.
But the licensed retailers, who number about 85 in total, are far outnumbered by more than 2,000 rogue head shops, the target of complaints that they siphon customers, sell to children and attract criminals.
The quick and brazen takeover has left many people frustrated with the government’s slower and stricter approach to expanding the legal market and has emerged as the most pressing challenge facing the rollout, as the authorities struggle to keep the state’s promise to deliver a $5 billion market to diverse small businesses and people harmed by past anti-marijuana policies.
“They need to get a handle on that quickly,” said James Stephenson, a co-founder and chief executive of oHHo, a wellness brand that depends on dispensaries to sell its cannabis-infused chocolates, gummies and seltzers. “You can’t have one set of people playing by the rules.”
While the illicit shops multiplied, legal dispensary openings stalled for months because of lawsuits, the rule-making process and the state’s broken promise to finance the leasing and renovations of the first 150 licensed dispensaries. Just 10 stores are in operation with the state’s help, while another 375 dispensaries, licensed for nine months or more, have yet to open their doors.
Gov. Kathy Hochul, who has increasingly voiced her disappointment, recently ordered a review of the Office of Cannabis Management, the agency handling the rollout. She has also proposed legislation expanding the power of local authorities to punish unlicensed shops and complicit landlords, as well as a measure to slash taxes that drive up the price of legal products. The changes have broad support in the State Legislature.
