Gold balloons announcing the “GRAND OPENING” of Zaza City Convenience in southeast Queens were still floating in the shop last month when the authorities cleared its shelves of cannabis and tobacco products that were illegal to sell in New York. After the police officers had bagged and weighed the contraband and sent it off in an evidence van, a sheriff’s sergeant sealed the entrances to the store with padlocks.
Similar scenes have played out across New York City as a task force led by the Sheriff’s Office has flexed its new emergency powers to lock down unlicensed cannabis shops, which officials recently estimated outnumbered licensed retailers in the city by about 2,900 to 62. From May 7 to June 3, inspection teams closed 311 stores, seized $10.4 million worth of products and issued $23.4 million in fines, according to the mayor’s office. An additional 325 shops were put on notice.
Previously, shuttered stores could reopen within hours of inspections while officials sought court orders to shut them down permanently. But changes enacted in this year’s state budget and the city code have given the Sheriff’s Office the power to declare the shops an imminent threat to the public and close them immediately for up to a year.
Sheriff Anthony Miranda, in an interview at his office in Queens, said that the padlocks cut off income that the shops relied on to absorb the cost of violations. While some stores continue to evade enforcement by warning each other when inspectors are nearby or shifting to delivery services — even reviving weed trucks — others have stopped selling cannabis or shut down completely, he said.
“It’s not just the cost of doing business anymore,” he said. “They’re going to feel this.”
Following the state’s legalization of cannabis for recreational use in 2021, rogue smoke shops multiplied like an invasive species. Convenience store owners seized an opportunity to shore up their bottom lines, as did landlords whose spaces were emptied by the long decline in traditional businesses like salons and restaurants.
Despite officials’ repeated threats to crack down, the number of illicit shops almost doubled over the past year, fueling an avalanche of complaints, mainly about the stores attracting crime, misleading consumers and selling to children. Now it appears the city is finally ratcheting up the fight.
The unlicensed shops flourished after the passage of legalization amid confusion over what the law permitted and a reluctance among law enforcement officials to rehash the aggressive tactics of the war on drugs. Once state cannabis regulators made clear the shops were illegal, the problem shifted to figuring out whether it was the state or local authorities who were responsible for closing them. Lawmakers initially settled on the state cannabis agency and tax authority, but neither had enough resources for the task. So this year, officials changed the law to give local governments more leeway to do it themselves.
Critics of the city’s crackdown, many of them lawyers representing smoke shop owners, say the authorities are trampling on owners’ constitutional rights by seizing their businesses before their cases can be heard in court. The lawyers have raised concerns about inspectors’ turning off shop cameras during searches, a tactic that Sheriff Miranda said was necessary to prevent owners from eavesdropping.
They have also likened the growing number of arrests during inspections, including of shop owners who asked to see a court order authorizing a search, to the repressive tactics of the war on drugs. Mayor Eric Adams has defended the actions, but the city has declined to say how many people have been arrested during the inspections.
Lance Lazzaro, a Brooklyn-based defense lawyer, filed a federal lawsuit against the city on Wednesday on behalf of 27 shuttered smoke shops, seeking to have the city’s new enforcement strategy declared unconstitutional. “What’s going on here is a complete travesty,” he said.
The inspections offer a street-level view into a broader campaign against unlicensed smoke shops that officials say have flooded states that have legalized cannabis with illegal, unsafe and often counterfeit products. The efforts have yielded mixed results in California, where officials in cities like San Diego say they have gotten rid of illicit shops, while in Los Angeles, such stores outnumber licensed retailers by a ratio of about four to one.
New York State is beginning to find some success in its own fight against unlicensed stores. In May, the attorney general won a $15.2 million judgment — the biggest fine to date — against the owner of a chain of unlicensed dispensaries in the Finger Lakes region. In Rockland County, state prosecutors and federal investigators are weighing possible tax fraud and money-laundering charges against another chain of smoke shops.
Zaza City opened earlier this year and was one of four stores that The New York Times visited in late May, as task force teams inspected and sealed them. Two were located on a bustling block in Flatbush, Brooklyn, where the police said a 20-year-old worker was arrested on a weapons charge for having a dagger. Customers turned away in disappointment as the stores were closed, while curious onlookers expressed a mix of shock, relief and praise.
Ronald Tawwab, 72, a superintendent for a couple of buildings on the block, said he was glad to see the shops go.
“They’re doing the right thing,” he said of the authorities. “The stuff is garbage.”
Leila McPherson, who walked by the Brooklyn stores with her daughter, said she supported the closings on one condition: “As long as they’re not impeding on the shop owners’ rights, I’m all for it.”
The Adams administration has maintained that the task force does not need a court’s permission to conduct inspections, and that it is reasonable to make arrests when the searches turn up evidence of criminal activity.
But lawyers for the shops say the city is bound by a provision of the state’s cannabis law that requires officials to obtain a court order when a shop refuses an inspection. The city disagrees, saying that the law only applies to state enforcement agencies.
“The Sheriff’s Office is doing exactly what the law permits the Sheriff’s Office to do and that is really something that broadly everybody wants,” Lisa Zornberg, the chief counsel to the mayor and City Hall, said during the mayor’s weekly news conference on June 4.
Nadia Kahnauth, a Queens lawyer who represents convenience store owners, said the enforcement blurred the line of legality.
“Where do we draw the line about what is an investigation of unlicensed activity and what is an unlawful search and seizure?” Ms. Kahnauth said.
In Queens, a spa and a bike club were effectively shuttered when the sheriff padlocked the gate they shared with Rush Hour Family Farms, an unlicensed cannabis shop, raising questions about the collateral damage to businesses physically connected to such stores. However, neither the spa nor the club responded to requests for interviews sent on Instagram.
After a hearing on June 5, the city’s administrative law court held the store in violation of the state law prohibiting unlicensed sales of cannabis. The hearing officer said that although the amount of cannabis flower found at the shop was below the three-ounce legal limit for personal possession, the presence of a scale and several small bags indicated the store was likely preparing it for sale.
Eladia Clark, the shop’s owner, said that she had a hemp license and sold smokable flower and CBD potions.
Hearing officers have so far tended to side with the city. Violations were upheld in 106 of the first 147 cases to result in rulings, allowing the city to collect a $10,000 fine from each retailer, according to data provided by the court. Thirty-three cases were dismissed over concerns that the summonses were not properly delivered, though the Sheriff’s Office has begun to reissue them. Others were withdrawn or replaced, or the hearings were rescheduled. Just four rulings found that the shops had not committed a violation.
Once the summonses are adjudicated, the State Department of Taxation and Finance can levy additional financial penalties and charge retailers criminally with tax fraud. Owners like Ms. Clark, who have licenses to sell lottery tickets, tobacco and liquor, could see those revoked as well.
Still, the authorities have yet to penetrate the nimble criminal networks that are supplying cannabis to the unlicensed stores. It was only through a stroke of luck — specifically, two 911 calls reporting a burglary in Downtown Brooklyn — that the authorities were able to launch their biggest operation yet against a distribution warehouse supplying cannabis to bodegas.
No arrests have been made in that case. But Sheriff Miranda said the warehouse’s landlord had given the authorities information about the tenants who leased it.
Property owners have been eager to cooperate, helping the authorities to identify the owners of the shops, who often hide behind layers of limited liability companies, the sheriff said.
His office provides landlords with affidavits describing a tenant’s illegal activity to help with evictions.
Property owners had been willing to gamble on unlicensed smoke shops when the rules were ambiguous, Adam Lindenbaum, a real estate lawyer, said. But now that they face the loss of rent from padlocked stores and potential lawsuits from the city for renting to illegal businesses, many have decided that it’s too risky.
“I think the party’s over,” Mr. Lindenbaum said. “It’s still new but the shot out of the gate is heard by both the landlord and tenant’s side.”
For some licensed cannabis dispensaries, enforcement has been a boon.
Joseph Abramov, the owner of Urban Leaf in Midtown, said that sales had risen between $500 and $700 a day after the authorities shut down shops near him.
“Every dispensary would see a spike if they shut these down,” he said.
Kirsten Noyes contributed research.