New York City has been cracking down on illegal marijuana shops since May this year, shutting down over a thousand illicit storefronts. Despite issuing fines totaling $104 million, the vast majority of these operators have not paid the fines, and the city treasury has only received $200,000 to date.
The Committee on Oversight and Investigations of the City Council held a hearing on September 17 to review the effectiveness of the city’s “Operation Padlock to Protect,” which began on May 7 to forcibly close illegal marijuana shops. Committee chair, Council Member Gale Brewer, questioned Anthony Miranda, the security official responsible for the enforcement action, pointing out that even though the office sealed off a thousand illegal storefronts and issued fines of $104 million, why has the city treasury received only $200,000 so far, accounting for just 3% of the fines?
Miranda explained that the main purpose of the “Padlock Operation” was to shut down illegal shops, and the fines were intended as a deterrent. The illegal operators who were targeted usually declare bankruptcy, making it difficult for authorities to collect the fines. Additionally, the security office only has the legal authority to collect fines 120 days after issuing them, and operators can delay or avoid payment through various means.
During the hearing, some council members raised concerns that the enforcement actions were not effectively implemented. For example, some illegal operators appeared to close their doors but continued their operations on the sidewalk in front of the store, while others only opened for business after dark. There were also reports of some operators brazenly cutting the padlocks and resuming business, even expanding into food services.
Miranda stated that cracking down on illegal marijuana transactions on the streets falls under the jurisdiction of the New York City Police Department, and the security office closely monitors closed illegal shops to prevent operators from reopening. David McPonski, an operator of the legal marijuana shop Freshly Baked NYC in the Bronx, expressed during the hearing that the efforts to combat illegal activities were still insufficient. Illegal marijuana shops often reopen within three days of being shut down, and currently, there are more illegal shops than four months ago.
Starting in May, New York state and the city have taken action to shut down over 1,300 illegal marijuana shops, but at least 2,600 are still in operation, while the city only has 79 legal operators. Some closed operators have filed lawsuits against the enforcement actions, citing violations of constitutional due process rights. Lance Lazzaro, a lawyer representing multiple closed and fined operators, told Crain’s magazine that the enforcement actions gave security officials excessive power and forced operators to close for up to a year without evidence of criminal activities, prompting operators to challenge the constitutionality of the crackdown in court.