New York’s new drug problem: what to do with a billion dollar Weed mountain?

Cannabis farms are booming upstate, but red tape frustrates newly legal shops in the city. Result: confusion – and a very big stash.

Let’s Be Blunt: No smoking in the plazas” is the message that has been placed around Times Square following newly liberalised cannabis laws that have turned New York, some say, into a pot-smoking free for all. The legislation has also set off an upstate cultivation boom that produced 300,000 pounds of weed, valued at three-quarters of a billion dollars, in its first harvest.

So far just a handful of state-licensed dispensaries have opened, a complement to hundreds of weed-selling vape stores, more traditional home delivery services and those calling out their wares in parks and street corners across the city.

With the aroma and sales of cannabis seemingly everywhere, the city’s mayor, Eric Adams, is committed to redoubling efforts to crack down on unlicensed distributors, raiding dozens of stores, confiscating product and issuing fines. In one instance, a converted school bus selling marijuana near Rockaway Beach ferry was seized.

There is big money at stake. As of March 2022, weed-legal states reported a combined total of $11.2bn in tax revenue from legal, adult-use cannabis sales. Nationally, the legal cannabis market could reach $66bn by 2025.

“We have to zero in on this cannabis stuff,” Adams said last week at City Hall in one of a series of speeches in which he has expressed concern that illegal stores are selling unregulated and untested cannabis products designed to entice children. “We can’t have people make a mockery of our system.”

That “system” is designed to promote social justice but critics say the legal market is weighed down with a bureaucracy of permits, licenses, taxes and regulations that, notwithstanding the possibility of arrest and seizure, scarcely troubles the long-standing illegal trade.

Under rules drawn up by Adams’s predecessor, Bill de Blasio, New York’s Office of Cannabis Management favours growers and dispensaries run by members of communities disproportionally affected by decades of prohibition, a century-long period that the American Civil Liberties Union describes as a “racist war”.

“Over the last 30 years, Black New Yorkers were 15 times more likely to be arrested for cannabis than white New Yorkers,” the management board says. “For Latinos, it was 8 times more likely.” Accordingly, it says, the majority of licenses announced to date were awarded to people of colour.

But New York has licensed far more farms than dispensaries, creating a glut of unsold product.

At Hudson Cannabis, Melany Dobson has 2,700lb of harvest bud stacked to the roof in storage containers awaiting certification from one of five state testing labs. At the market value of $300 a pound wholesale, her stash value is $800,000.

But wholesale prices in New York are falling, as they are across the US where many growers have gone out of business, and the federal government in Washington is paralysed by political disagreements over full legalisation.

Dobson, 30, is an employee of Abby Rockefeller, who also runs the nearby Churchtown raw milk dairy, where milk cows have named stalls. Rockefeller, a descendant of the oil baron John D, has said her primary interest is in the natural regeneration of soil – and it turns out that hemp and cannabis are effective in that effort.

Hudson Cannabis is licensed to produce 43,000 sq ft of cannabis flower, 29,000 sq ft of which are grown outside. But the industry is new to New York and the cannabis seed is not yet optimised for the Hudson Valley climate.

“It doesn’t make sense for anyone to be claiming the best cannabis right now, because so many seed banks were wiped out during prohibition,” Dobson says, and points out that New York’s illegal growers ignored agronomic traits because drug deals were often done in a hurry. “We have some way to go to make seed that reflect the conditions,” she adds.

Moreover, under state-by-state legalisation moving weed from one to another is illegal. “The regulations are confounding,” says Scott Solomon of OSS Inc, a risk management company involved in providing secure transportation. “In New York, businesses have none of the resources of the big cannabis players.”

The quagmire of regulations gives the illegal market a competitive advantage. “There is a lot of frustration,” Solomon says. “It’s a grey market where cannabis is not necessarily legal but it’s decriminalised.”

With certification and distribution bottlenecks, and no expectation New York will allow a pick-your-own or roadside sales common to vineyards or fruit farms, Old Mud Creek’s weed mountain will likely be processed for its active ingredient or sold to edible-product producers.

Dobson, who grew up on a micro-green farm in Maine and planned to study law before joining a five-greenhouse weed operation in Humboldt, says the business is a natural fit with the farm-to-table movement.

“I’d compare it to wine and coffee. The only way we can meet the needs of farmers is if we value where the cannabis comes from and its specific attributes,” Dobson says. “Until now, unless you go to Jamaica or Mexico, we really had no idea where it came from.”

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