New Law Targets Landlords of Unlicensed Smoke Shops

Councilmember Lynn Schulman alongside Assistant Chief James Mccarthy of Manhattan South, Senior Advisor to Union Square Travel Agency, Robert Cornegy, and Councilmember Carlina Rivera. Photo courtesy of Councilmember Schulman’s office.

By Iryna Shkurhan | [email protected]

New legislation passed by the city council last month is seeking to hold landlords, not business owners, accountable for the unlicensed sale of cannabis under their roof. 

The city estimates that there are 8,000 smoke shops, 2,000 of which sell cannabis products, operating illegally across all five boroughs. So far there are only a handful of licensed cannabis dispensaries approved by the state – the majority are located in lower Manhattan. Good Grades in Jamaica is the only cannabis shop operating legally in Queens. 

Intro 1001-B, first introduced by Councilmember Lynn Schulman in April, prohibits knowingly leasing a commercial space to a tenant who will utilize it for the distribution or sale of illicit cannabis or tobacco products without a license. Landlords can face a $5,000 civil penalty at first, and a $10,000 penalty for each subsequent violation, if they do not cease the operation. 

“This legislation is a game changer and adds another tool to the enforcement toolbox against these harmful businesses,” said Councilmember Schulman at the press conference outside the Union Square Travel Agency Cannabis Dispensary in the East Village. It served as a formal announcement of the legislation which was adopted on July 23.  

“We stand here today because we have an obligation to protect a healthy legal cannabis market and ensure that the industry meets its equity goals,” said Councilwoman Carlina Rivera, who also pointed out that those who were disproportionately affected by the war on drugs have priority to receive Conditional Adult-Use Retail Dispensary licenses. In legal shops, there is also a 13 percent sales tax that goes towards community reinvestments. 

Councilmember Carina Rivera has several legal cannabis dispensaries in her district. Photo courtesy of Councilmember Schulman’s office.

Officials believe that the illicit market of unregulated products undermines those who took the rigorous legal route of securing a license through the state, as well as the social justice element of cannabis legalization. There is also a health risk to the public when consuming substances that are not officially tested and regulated. 

“As you can imagine having in close proximity to here so many illegal shops, it flies in the face of consumer safety, because we don’t know what’s in those products,” said Robert Cornegy, Senior Advisor to the Union Square Travel Agency, and former Councilman. “Our products here are tested by the state and have been proven to be safe for consumption.”

“If a space is being utilized illegally, and an owner is aware, it is appropriate for that owner to be penalized along with others who are knowingly involved in the arrangement,” said Steve Soutendijk, Co-Chair of the Real Estate Board of New York’s Retail Committee. 

Schulman also mentioned that in Forest Hills, which falls in her district, there are several cannabis shops operating illegally. 

“Illegal smoke and cannabis shops have been an ongoing challenge in our communities,” said Heather Beers-Dimitriadis, Chair of Queens Community Board 6 which encompasses Forest Hills and Rego Park. “It is important to protect our community from businesses selling adulterated cannabis, to protect our city from the theft of tax dollars, and to protect future regulated cannabis shops that continue to open throughout our borough.”

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