Is New York's cannabis business really flying high?
Five years after it was Legalized in the state, cannabis is seemingly everywhere in New York. But, business owners say that many legitimate outlets are struggling – largely because of a thriving grey market, and the complicated legal status of the US cannabis industry.
If you've recently visited New York, you've probably noticed something.
Advertisements outside bodegas display pictures of bright green flowers, higher-end dispensaries that resemble coffee bars or electronics shops welcome customers from all over the world, and then of course there's the smell – so seemingly omnipresent that even US Open tennis players have complained.
Weed is everywhere. From the outside it looks like a free-for-all, one that is drawing scepticism even from voices broadly supportive of the aims of the legalisation – including reducing harm and boosting tax revenue.
Social media is rife with complaints (typical comments include "New York could not have screwed up legal weed any worse!") and for years the local press has been chronicling the rise of the "weed bodega" – typically a corner store selling products of dubious provenance. Across the country, weed consumption has increased – though studies indicate that the rate of young people using has gradually declined since the turn of the century.
Things may have come to a head recently when the New York Times, once a legal weed supporter, published an editorial headlined: "Marijuana Is Everywhere. That's a Problem."
The newspaper now argues that "marijuana is causing more harm than predicted" and calls for tighter regulation.
But this new green rush is not as straightforward as it seems. Business owners say that public perceptions have been sullied by illegal operators, and that many above-board businesses are struggling – largely because of the incredibly complicated legal status of the US cannabis industry.
"At first glance, New York's cannabis industry appears to be booming," says Jayson Tantalo, a cannabis businessman and vice president of operations for the New York Cannabis Retail Association. "But that perception was initially driven by an oversaturation of illicit operators.
New York state legalised recreational use of cannabis five years ago this month. But legal wrangling and slow issuing of licenses hampered initial growth, while sales in other states such as California were racing ahead.
The bottleneck was so restrictive that some growers in New York complained that their crops were going to waste because of the lack of retail sales outlets. Meanwhile hundreds of those shady outlets sprang up, particularly in New York City.
Those wild days may be coming to an end. State authorities are starting to crack down on illegal operators, and police have been given power to immediately shut shops without a licence. And more legal businesses are being set up to address pent-up demand.
"It was really out of control," says Vlad Bautista, co-founder of Happy Munkey, a cannabis retailer in the Inwood neighbourhood of Manhattan.
"It made a little dent," he says of recent enforcement efforts. "But there’s still a long way to go."
CRB Monitor, a firm that researches the cannabis industry, counts more than 2,000 active cannabis business licenses across the state – including retailers, wholesalers, growers and other types of cannabis companies – with another nearly 5,000 applications in the pipeline.
The effects can be seen far from Manhattan with weed shops popping up all across a state that is roughly the size of England. New York's growing pains are just one example of the extraordinarily complicated legal status of cannabis that has caused confusion across the country - for businesses, customers and the public.
The patchwork legal regime around the industry is a product of cannabis's long strange trip from respectability to contraband and back again. George Washington, the first US president, famously grew hemp crops at his estate.
But waves of restrictions followed, culminating in a 1970 law that deemed marijuana a Schedule I drug – the most restrictive category.
Despite the US government's war on drugs, there has always been a significant movement calling for looser regulations on cannabis. That movement gradually became more mainstream in the early years of this century.
Support for legalising cannabis first cracked 50% of Americans in 2013, according to polling firm Gallup, and that figure has since risen to more than two-thirds today. But instead of blanket legalisation, reforms came in piecemeal fashion, on the state and sometimes even the local level, creating a fragmented state-by-state market.
To top it off, weed remains illegal under federal law – thousands of people still get arrested each year for marijuana possession and related crimes.
