Operation Padlock to Protect: Cracking Down on Unlicensed Cannabis Sales
In an announcement on August 28, New York City Mayor Eric Adams revealed that city officials destroyed more than 4 tons of unregulated cannabis products that were seized from unlicensed stores under an enforcement operation that began nearly four months ago.
Authorities incinerated the products, worth an estimated $63 million, from roughly 1,000 storefronts throughout New York City.
The enforcement operations, dubbed “Operation Padlock to Protect,” was initiated by Adams on May 7 to shut down smoke and vape shops across the city’s five boroughs that are not permitted to sell cannabis products under the state’s Office of Cannabis Management (OCM), which is the state’s regulatory authority for the cannabis industry.
“This is what it’s about,” Adams said during a press conference Wednesday, as he held up one of the 576 bags of confiscated cannabis products that were about to be incinerated. “You can actually smell the cannabis that is here. What we accomplished is exactly what we knew we could accomplish with the right insight and the right focus and determination.”
Operation Padlock to Protect commenced following the inclusion of the SMOKEOUT Act in New York’s state budget agreement. This act provided municipalities with the regulatory authority to close stores that don’t comply with the state’s cannabis laws.
As of August 27, Adams announced that city officials had conducted inspections of 100% “of the known shops identified” as selling unregulated cannabis products. The enforcement operation was overseen by the New York City Sheriff’s Office, the Police Department (NYPD), and the Department of Consumer and Worker Protection (DCWP).
The OCM also reported that city officials had shut down 1,000-plus unlicensed stores at a time when there were 166 licensed adult-use dispensaries throughout the state, including 76 in New York City alone.
Along with local enforcement mechanisms, the Cannabis Enforcement Task Force (ICET) has begun closing unlicensed stores. The ICET is a statewide interagency effort that collaborates with the state police, the OCM, the New York Department of Tax and Finance, and more than a dozen other state agencies.
The Impact of Enforcement on New York’s Cannabis Market
Within six weeks following the ICET’s authoritative actions, licensed cannabis stores in Manhattan, Brooklyn, Bronx, Queens, and Staten Island collectively experienced more than $1.8 million in revenue growth, which equates to roughly a 50% increase, according to OCM Policy Director John Kagia.
According to Governor Kathy Hochul, state authorities had padlocked 345 unlicensed cannabis stores and seized nearly $29 million in unregulated products as of August 26. Plus, 136 retail locations closed independently, vacated, or ceased selling products due to ICET enforcement.
“I’m not going to let illegal cannabis storefronts plague our communities and take business away from our hardworking legal dispensaries,” Hochul wrote on social media. “Our message is simple: If you operate without a license, we’ll shut you down.”
These actions coincide with Lance Lazzaro of The Lazzaro Law Firm LCC filing a class action lawsuit on June 12 against the city on behalf of more than two dozen businesses who claim it is unconstitutional to padlock businesses “with no judicial review and without a court order, and based solely on the unadjudicated claim that a business was selling cannabis without a license.”
Yet, under the state’s cannabis law, the Marijuana Regulation and Taxation Act, which was enacted in March 2021, the OCM and the Cannabis Control Board have the authority to license dispensaries to sell adult-use and medical cannabis products, as well as certain hemp products.
“Illegal cannabis [is] nothing like legal cannabis, which is why these illegal products are being incinerated, so they can never return to New York City streets and endanger our youth again,” Adams said. “Our successful efforts continue to keep our communities safe and create an environment where legal operators, who uphold public safety and realize the goals of social justice in the cannabis industry, are able to thrive.”
