A months-long crackdown in New York City and across the rest of the state on unlicensed cannabis shops has resulted in more than 1,300 closures, but at least 2,600 such rogue shops remain operational while the city is home to a mere 79 fully legal dispensaries. And the vast majority of the $104 million in fines issued thus far by authorities have gone unpaid.

Sheriff Anthony Miranda shared those details during his testimony at a New York City Council committee hearing on Tuesday, where council members were trying to get a handle on the overall situation.

“Operation Padlock to Protect has been able to shut down illegal shops and unlicensed cannabis dispensaries in every city district. On a weekly basis, we are inspecting hundreds of locations,” Miranda told the council. “This is only the beginning. The operation will continue to change and expand as the industry continues to evolve.”

Dissatisfaction in the ranks

The operation – which launched in the spring after state law was amended to aid in the quest to close down thousands of unlicensed marijuana sellers – has shuttered 1,078 stores within New York City, following 5,059 inspections, Miranda told the council.

When pressed by Councilwoman Gale Brewer as to why only about $200,000 of the $104 million in fines – roughly 3% of penalties issued – have thus far been paid, Miranda noted that Operation Padlock was designed primarily to shut the shops down, not to collect on fines.

“The increased fines are meant as a deterrent. By and large, shops that are padlocked go out of business, and it is very difficult to collect fines from often untraceable LLCs that are no longer in operation,” Miranda said.

In addition, Miranda said, his office doesn’t have the legal power to collect on fines until at least 120 days after they’ve been issued, and there are a number of ways the shops can evade such deadlines, via extension requests or other legal means.

“The sheriff’s office is working around the clock to inspect unlicensed stores in the city,” Miranda said.

That didn’t completely satisfy the council.

“You have sealed a thousand shops. That could be $10 million in revenue. I know you mentioned this is not revenue-generating, but if people are breaking the law, they should pay a fine,” Brewer said.

The sheriff also said his office supports a proposal from the council to add a new tweak to the city’s 311 call center to offer residents a direct way to report suspected illegal cannabis shops, but he opposed an idea to increase mandated progress reporting from the task force, which he said would be “overly burdensome.”

Miranda also fielded a number of concerns raised by city council members, including reports that some of the illegal retailers simply moved their operations out to the sidewalk in front of their now-locked stores, and others that only open for business after dark in an attempt to avoid the crackdown. Some of the targeted shops have brazenly cut the padlocks and restarted their unlicensed cannabis shops, and even added food services, including grilling hamburgers for customers, one council member said.

“There are some retailers where you have closed, and then the operation continues right outside the door, with a locked, gated store behind them,” Brewer told Miranda. “Some of the illegal cannabis shops I’ve seen, they close during the day, they open at night, in order to evade you, because they think the sheriff only comes during the day.”

Miranda said that unlicensed marijuana sellers that deal on the street fall under the purview of the New York Police Department, not the sheriff’s office, but said his deputies have been coordinating with NYPD on some of those cases. He also said his deputies have been keeping a close eye on locations that were shuttered in case owners try to reopen.

“We also get calls when people break the locks and try to re-enter … that also makes it a priority for us,” Miranda said. “That’s why it’s imperative we stay vigilant.”

The sheriff’s office has been prioritizing reports of illegal cannabis sales from locations that are nearby public youth centers, schools and churches, along with reported cases of illnesses caused by narcotics sold by some of the shops in question.

However, Miranda pushed back when Brewer requested a list of the suspected shops, and said that information likely won’t be made public because the shops are technically not yet convicted of any wrongdoing.

‘Power corrupts’

Some speakers, including council members, also raised concerns about potential “due process violations,” which were also raised recently in a new lawsuit by Empire Cannabis Club, which is attempting to have the entire enforcement push declared unconstitutional.

To that point, Miranda acknowledged that attorneys representing many of the rogue shops have gotten “creative,” and said, “We’re adjusting. The law is something that is developing.”

A deeper problem within the sheriff’s office is undercutting the crackdown, alleged Ingrid Simonovic, the president of the New York City Deputy Sheriff’s Association labor union. Simonovic said that during Miranda’s tenure, more deputies have quit the job than have been onboarded, and she asserted that even more unlicensed cannabis shops have opened for business, despite the ongoing crackdown. She blamed Miranda, who she said has engaged in “retaliation” against his own deputies.

“In a nutshell, many stores are reopening after being shut down,” Simonovic said. “We have lost approximately 43 deputies in the last two years, while onboarding about 26. Some of those deputies have left because of the toll of seizing marijuana, which is being stored unsafely.”

Attorney Lance Lazzaro, who represents many of the shops that have been targeted for closure and cited with fines, also said the new laws which launched the crackdown have given the sheriff too much power. Lazzaro said Miranda has become “judge, jury and executioner” for bodegas and smoke shops, many of which he said are innocent of the allegations made.

Lazzaro said that even if a civil summons for supposedly selling illegal cannabis is dismissed by the city’s Office of Administrative Trials and Hearings (OATH), Miranda can ignore that finding and keep any of the shops closed for up to a year without evidence of criminal activity.

“Power corrupts, and the way the statute is written has not really dealt with the cannabis stores,” Lazzaro said.

Another attorney who spoke said Miranda was not being truthful when he told the council that the task force had not been seizing cash from smoke shops that have been raided, and said she’s got numerous clients who reported tens of thousands of dollars in cash and certified checks that were seized by deputies.

“The way to solve the problem is to give a conditional license to the bodegas,” she said.

David McPonski, who runs the licensed dispensary Freshly Baked NYC in the Bronx, also said the crackdown has thus far been “alarmingly insufficient.”

“Nearly all of the unlicensed stores near us that were previously padlocked immediately reopened within three days. And there are actually more unlicensed operators around our legal dispensary now than there were four months ago when we began reporting them,” McPonski told the city council.

Miranda report to NYC Council