NYC cracked down on illegal weed bodegas, left behind hundreds of shuttered storefronts

A candy-colored “Exotic Clouds” sign that once beckoned customers into a smoke shop at Stanton and Ludlow streets now hangs over a darkened storefront with windows covered in graffiti. Blocks away, on Allen Street, the gate is down on another shuttered shop, this one with an awning emblazoned with “Social Club,” written in understated cursive.

All around the Lower East Side, tucked between hip restaurants, bars and clothing boutiques, are the remnants of bodegas, lounges and makeshift dispensaries closed by the city in recent months, part of a crackdown on alleged illegal weed stores. Officials have made 5,000 inspections and closed more than 1,100 businesses citywide on charges of selling marijuana without a license.

The Lower East Side includes the zip code with the most cannabis summonses in the city, followed by parts of Williamsburg, Brooklyn, and the area near Fordham University in the Bronx, according to a Gothamist analysis of city data on violations issued through Operation Padlock to Protect, launched by Mayor Eric Adams and the sheriff’s office in May.

The enforcement push has left behind blocks pocked with empty storefronts, with no clear timeline for returning most of the properties to use — either under the same businesses, or other legitimate, functioning operations. While some shop owners are fighting the closures in court — which could keep the stores in limbo longer — others are surrendering their leases, allowing landlords to recover the properties from the city and try to find new tenants. Shop owners may also appeal to the city to let them reopen under different business models that don’t involve selling weed.

In some parts of the city where alleged unlicensed stores have been shut down, there are still no state-sanctioned dispensaries, the city data shows. In some cases, neighbors complain that the shutdowns have only moved marijuana sales to sidewalks, where weed sellers still do brisk business, just outside of the closed brick and mortar shops.

“At some point you [take up] the whole sidewalk and you can’t even walk,” said Israel Ochoa, who lives in Crown Heights.

The rise of the unlicensed weed shops came quickly. New York has long had a thriving underground marijuana market, but unregulated brick and mortar shops first started popping up after New York legalized marijuana for adult use in 2021, and they proliferated quickly.

The state took months to open the first legal dispensary, leaving a vacuum that gray-market operators rushed to fill. Commercial real estate brokers who spoke with Gothamist said landlords likely took a risk on these businesses, in part because of the lagging retail market and in part because they saw an opportunity to mark up their rents.

Now, many business owners whose shops have been closed are facing hefty fines — typically $10,000 apiece — and are grappling with whether to cut their losses and abandon their leases or keep paying rent while fighting the closure orders. Landlords, on the other hand, have yet to receive any fines under a 2023 law that calls for penalizing those who knowingly rent to unlicensed shops, according to the sheriff’s office.

Adams and local lawmakers have repeatedly praised Sheriff Anthony Miranda, who is leading the enforcement effort, for shutting down so many stores so quickly. But his operation is also increasingly coming under scrutiny for potential abuses.

Dozens of owners of businesses that were shut down are suing the city over alleged due process violations. Cannabis lawyers are also accusing the sheriff of improperly seizing cash from the stores that get raided, and sheriff’s deputies say complaints about the alleged practice have been submitted to the city’s Department of Investigation.

The Department of Investigation declined to comment on whether an investigation is underway.

Earlier this week, asked about the claims of improper cash seizures, Adams said he still has confidence in Miranda and doesn’t believe the sheriff has anything wrong.

“This guy’s closed down 1,100 smoke shops,” Adams said. “He’s doing the job New Yorkers asked him to do.”

Between May 4 and Sept. 17, the city issued 1,278 summonses to 1,187 businesses scattered across the five boroughs, according to data from the Office of Administrative Trials and Hearings, or OATH. These are largely the same locations the city has padlocked for alleged illicit cannabis sales, although there is no comprehensive public data that specifically captures closures, or indicates which stores have since reopened.

At a recent City Council hearing, Miranda said he has been prioritizing areas where his office has received tips about several shops clustered together. But he said the city is attempting to investigate every complaint that comes in.

Based on a map of the data, it’s clear sheriff’s deputies and police have walked certain commercial corridors across the five boroughs — such as Nostrand Avenue in Crown Heights, Fulton Street in East New York, and Broadway on the Upper West Side — and had little difficulty finding targets, raiding strings of stores over several blocks.

The fate of most of the shuttered properties is still up in the air.

Getting the padlock off

Sion Misrahi, president of Misrahi Realty, said the city has shut down three pot shops that operated out of buildings his company owns on the Lower East Side. Misrahi said he has let one of the tenants out of their lease and gotten the city to take the padlock off so he can re-rent the space. The other two tenants are still paying rent — and Misrahi said he is hoping to avoid initiating any eviction proceedings, since they can take a long time.

“It’s never easy to get quality tenants,” Misrahi said. But he added that the storefronts he owns on the Lower East Side get rented out more quickly than those in other parts of the city “because of the youthful population of the area.”

When he spoke with Gothamist in mid-September, he said he’d already gotten interest in the space he recovered from the city from a deli and a liquor store.

Misrahi said he was unaware that the businesses he was renting to may have been selling weed.

“We don’t pry into people’s businesses,” he said. “We rent them a store.”

While some of the owners of stores that have been shut down are trying to hold onto their spaces while they fight their closures in court, others are cutting their losses and working with their landlords to get out of their leases early, according to cannabis and real estate lawyers.

As of Sept. 16, the sheriff has released 138 storefronts back to the building owners after the tenants left, according to Ryan Lavis, a spokesperson for the sheriff’s office.

The sheriff also agreed to reverse the closures of another 139 shops following OATH hearings, although he emphasized at the City Council hearing that stores can get re-inspected and shut down multiple times.

The owners of shuttered businesses also have the option to work with their landlords and the city to get the keys back by promising they will no longer sell cannabis, according to Liz Garcia, a spokesperson for City Hall.

Any shop that receives a summons — which frequently comes with a closure order — is entitled to a hearing with OATH. Hearing officers then decide whether to uphold the summons and the fine that comes with it. But hearing officers can only make a recommendation as to whether a closure order should remain in place.

The final decision is up to Miranda, who has the authority to keep stores padlocked for up to a year.

But he says that’s not his goal.

“This administration wants a legally operating business to be able to take over the commercial space as soon as possible,” Miranda said at the City Council hearing on Operation Padlock earlier this month. “This will not only help the landlord, but also improve the neighborhood.”

‘It was fast money’

Francisco Gonzalez, a Lower East Side native who founded the commercial brokerage firm Loisada Realty, said many landlords have been eager to rent to cannabis stores because they’re willing to pay more. He added that unlicensed businesses often present themselves as “convenience stores” or “smoke shops.”

Gonzalez said he has been approached by several entrepreneurs looking to open weed shops in the area without a license, but has declined to help them find locations — even if it means giving up a big commission.

“It’s a stain on the neighborhood,” Gonzalez said of the rush of stores that have popped up.

He’s not opposed to marijuana generally, though. He helped his friend Coss Marte find the Delancey Street space for his legal dispensary Con Bud — which Marte said gets a boost in sales every time an allegedly unlicensed competitor gets shut down.

Richard Flateau, a commercial real estate broker and former Central Brooklyn community board chair, said the sluggish post-pandemic retail market likely played a role in motivating some landlords to take a chance and rent to tenants running unlicensed cannabis shops.

“In Central Brooklyn, it’s taken a long time for the recovery of commercial activity on a lot of these commercial strips,” Flateau said. “For a while, it might have been a choice between getting a cannabis place or holding it vacant for an extended period of time.”

“I think it was fast money for a lot of landlords,” he added.

Back to the streets

The Lower East Side and other parts of Lower Manhattan are now home to a growing number of official, licensed dispensaries that provide an alternative to the underground market. There are about 200 statewide, with more likely to open in the coming months.

But some neighborhoods targeted by law enforcement are still legal weed deserts.

Crown Heights, for instance, has yet to get a licensed dispensary, and there are only a dozen spread across all of Brooklyn. Nearly as many stores have gotten summonses for illicit sales along the 10-block stretch of Nostrand Avenue between Fulton Street and Eastern Parkway, Gothamist’s analysis found.

But that doesn’t mean there’s nowhere to buy weed.

A Sunday walk along that section of Nostrand earlier this month revealed a couple of businesses that appeared to be selling cannabis without a license, though several former weed shops’ gates were down.

Some vendors set up shop on the sidewalk outside a darkened storefront, hawking their product from lawn chairs and greeting friends from the neighborhood while music played from a speaker.

At a recent City Council hearing, several members said they had received complaints about the same thing happening outside shuttered stores in their districts.

Donnel Boykin, who patronized one of the Nostrand Avenue stores that closed, now buys his weed outside from people he knew growing up — just like the old days.

“Everybody is like family,” Boykin said. “That’s how it was before the stores came. We used to be outside getting weed.”