The city can now fine landlords for renting storefronts to unlicensed cannabis shops

Photo from June by Stacie Joy 

As of yesterday, a new city law is now in effect that holds commercial landlords responsible for renting storefronts to unlicensed cannabis shops. 

Introduction 1001-B, known as Local Law 107 of 2023, prohibits owners of commercial spaces from knowingly leasing to unlicensed sellers of marijuana or tobacco products, imposing fines of up to $10,000 on landlords for violations. 

The legislation followed a Council oversight hearing on the growing problem of unlicensed smoke shops operating across the city. The bill was passed on June 22. 

In a statement by Queens Councilmember Lynn Schulman, chair of the Council's Health Committee and prime sponsor of the unlawful cannabis shop enforcement legislation: 

"My recently enacted legislation ... will help shut down the illegal cannabis and smoke shops that have proliferated our city and created public health and safety hazards in our communities. This legislation is a game changer and adds another tool to the enforcement toolbox against these harmful businesses." 

Per a media advisory about the newly enacted law: 

... agencies that conduct inspections for unlicensed marijuana or tobacco sales and find such activity may provide written notice to the property owner requiring they ensure such unlicensed activity is ceased, serving as the basis of the violation. Any subsequent inspection that finds continued violation would make the landlord subject to a $5,000 civil penalty at first, and a $10,000 penalty for each subsequent violation. The commencement of an eviction proceeding shall be considered an affirmative defense for a landlord.

It is estimated that New York City is home to approximately 8,000 illegal, unlicensed smoke shops [ed note: half of which seem to be in the East Village]. Consequently, sales by illicit stores undermine the licensed recreational marijuana market, depriving New Yorkers of the tax revenues and community reinvestment funds generated from the 13% tax on legal sales. The products sold in unlawful stores are unregulated and therefore can pose health risks to consumers.

As we've seen in previous months, shops that have been raided-fined have eventually resumed operations, new shops have risen from the ashes of shuttered venues, or new businesses with increasingly cutesy names arrive down the block.

Meanwhile, to avoid detection, several readers have noted at least two shops have removed their signage and only open in the evenings when a coordinated raid is less likely.