New York’s Heavy Hand Keeps Illegal Marijuana and Tobacco Dealers in Business

While I have fond memories of life in New York, many of them involve defying some stupid rule or regulation. It’s a pleasure to now live in Arizona where government, while still idiotic, generally has a lighter touch. Unfortunately for friends and family I left behind, Empire State officialdom still hasn’t learned its lessons, as evidenced by the heavy regulatory hand stifling sort-of-legalized marijuana, and proposals to similarly reinforce the black market with an outright ban on cigarette sales.

“Governor Kathy Hochul today signed new legislation to increase civil and tax penalties for the unlicensed and illicit sale of cannabis in New York as part of the FY 2024 Budget,” the New York governor’s office announced this week. “The legislation, first proposed by the Governor in March, provides additional enforcement power to the Office of Cannabis Management and the Department of Taxation and Finance to enforce the new regulatory requirements and close stores engaged in the illegal sale of cannabis.”

But Isn’t Marijuana Legal?

News of a marijuana crackdown is a bit of a head-turner for a state that legalized the stuff in 2021. But the legislation intended to bring the booming underground market into the open was hobbled from day one. “New York’s law…is surprisingly permissive in some respects but includes high taxes and other provisions that compromise the interests of consumers,” Reason‘s Jacob Sullum warned at the time.

Last year, as taxes and regulations added up, and licenses were issued based on social justice grounds, it became increasingly obvious that the state was creating a “legal” market “so hobbled that it will offer uncompetitive prices to consumers and daunting barriers to vendors,” as I noted in August.

Now, a bare handful of legal vendors operate across the state. They’re somehow supposed to replace a thriving underground market that delivered high-quality weed to my door in the days of the beeper (after I quit the business myself) before further innovating. Unsurprisingly, the “unlicensed and illicit sale of cannabis” has been barely challenged by tax- and rule-hampered legal-ish competitors.

“New York legalized cannabis possession in small amounts in 2021,” The Wall Street Journal‘s Zusha Elinson observed on April 28. “Two years later, just five shops sell marijuana legally in New York City, while 1,400 bodegas, smoke shops and other outlets without licenses do, according to an estimate by the city sheriff.”

“Steep taxes and heavy regulation are making it hard for licensed pot sellers to operate in some states, driving more producers and buyers to illegal outlets,” adds the story’s subhed.

Failure to Learn From the Past

New York officials could ha