Cash-Flush NYC Weed Shops Targeted by Robbers as Washington Tries To Catch Up

With New York City’s cash-only cannabis stores becoming top targets for smash-and-grab robberies, Washington lawmakers are pushing to allow cannabis companies to gain access to banking services.New York’s gray market marijuana dealers, though, would be left in the lurch even if the bill passes.Smoke shop robberies in New York City jumped to 593 in 2022 from 137 in 2021, according to the City. If the mayor’s office’s estimates are to be believed — that there are about 1,500 illegal cannabis shops in the five boroughs — that means more than one in three was robbed last year.Given that there are only two legal recreational cannabis dispensaries in New York City, the vast majority of the state’s post-legalization cannabis business has gone to gray market vendors who are evading state taxes, as well as attracting the attention of criminals looking to make a quick buck.Similar crimes, some of them violent, have plagued dispensaries out west. Earlier this month a group of robbers stole more than $500,000 worth of cannabis products at a dispensary in Santa Cruz before escaping in four weed-filled cars.Earlier this month, the deputy mayor of New York City for public safety, Phillip Banks III, encouraged New Yorkers to avoid buying so-called gray market cannabis from shops that are not legal dispensaries.“One, if you’re purchasing cannabis, it may be a little bit of an inconvenience, but follow the law and purchase it from one of the four legal cannabis shops,” Mr. Banks said. “And two, please pass that information along.”Since November, the city has conducted 235 inspections of suspected illegal cannabis shops, issued around 500 violations, levied $4.5 million in fines, and seized nearly $12 million in illegal products.Now, a bipartisan group in Congress is pushing for the passage of the Secure and Fair Enforcement Banking Act, which would allow legal cannabis operations to bank in the same way most other legal businesses do. As it stands now, banks are unable to provide services to cannabis businesses because the substance is illegal federally and banks are leery of running afoul of regulators.“Right now, legal cannabis businesses are forced to operate entirely in cash. It’s a dangerous system—ripe for robbery, assaults, tax fraud, and money laundering,” Senator Merkley said in a tweet. “If you care about public safety, cash is a terrible system.”According to Mr. Merkley, the SAFE Banking Act would “make sure all legal cannabis businesses have access to the financial services they need to help keep their employees and their communities safe.”Representatives Dave Joyce and Earl Blumenaure, a Republican and a Democrat respectively, as well as Senator Daines, a Republican, have joined Mr. Merkley in pushing for the legislation.According to Messrs. Merkley and Daines, the bill has healthy support in the Senate, with 38 co-sponsors, including five Republicans. It’s not yet clear if the bill has the votes to overcome the filibuster’s 60-vote threshold.The SAFE Banking Act has passed the House with bipartisan support multiple times in recent years, while more comprehensive legislation on cannabis policy has stalled out.The problem for New York’s many cannabis shops, though, is that this bill is unlikely to solve their banking problem, because most of them do not operate legally.As it stands, there are only 66 licensed cannabis retailers across the state, most of which are medical dispensaries. There are only four legally operating recreational dispensaries — two in New York City, one in Binghamton, and one in Ithaca.Although more licenses have been approved in recent months, only legal businesses will be affected by the SAFE Banking Act and the slow rollout of legal recreational cannabis in New York has led to a booming gray market.Mayor Adams has complained about his inability to crack down on stores that are selling cannabis illegally, saying earlier this year that police “can’t take the necessary action.”“This cannabis stuff is a real problem and we must make sure that we can’t have people [make] a mockery of our system,” Mr. Adams told reporters in February. “We go in, we do enforcement, and I think we can only do $250 fines.”

Cash-Flush NYC Weed Shops Targeted by Robbers as Washington Tries To Catch Up

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