Blazing a new path: Cannabis enforcement reforms are good news for the industry

Under the state’s new budget, Albany has finally learned from some of its stumbles in developing a homegrown cannabis industry and significantly raised fines for unregulated weed businesses, given state agencies the authority to conduct inspections for suspected unlawful sales and clarified that selling unlicensed weed amounts to tax fraud.

Some lawmakers and officials feared that going too heavy-handed on enforcement would simply recreate the failures of decades of marijuana criminalization that the state’s new industry and its novel licensing approach — providing the retail licenses first to people or families who were criminalized, or organizations that serve them — was supposed to help address.

Yet there’s a wide gulf between the pervasive war on drugs approach that swept thousands of people up and practically ruined their lives for very minor offenses and the routine enforcement of regulatory compliance for businesses, of the sort we already conduct without major incident for restaurants, liquor stores, medical practices and all sorts of other enterprises. Running an illegal liquor store should get you closed down, not locked up. These reforms, two years late in coming, will finally make it expensive, unfeasible and ultimately undesirable to open up and operate unlicensed cannabis shops.

What’s more, their absence isn’t just a discouragement but an effective encouragement of skirting the rules, as the remote possibility of inspections and the middling impact of the fines is practically the cost of doing business, as evidenced by the explosion of unlicensed shops in NYC, which number more than 1,600 in even the most conservative estimates. Their growth is the licensed industry’s loss, as it faces the real prospect of being strangled in the crib by the metastasizing black and gray markets.

In the end, under the weed Wild West, no one wins but the unscrupulous sellers: not the legitimate small businesses competing against unlawful sales that undercut them, not the consumers who are getting uninspected, suspect product, and not the state as a whole, which is losing out on the tax revenues that the industry is supposed to produce.