Across New York City, landlords are discovering that in the cannabis crackdown, they are the ones left holding the bag. After a years-long push against unlicensed cannabis shops, retail spaces have been padlocked under state and city orders, leaving owners unable to collect rent, unlock doors for basic repairs or bring in new tenants. The result, according to property owners, is a mess in which their relationships with tenants and the very agencies closing the stores have all taken a hit.
City lawmakers have also raised the stakes. A City Council measure adopted this year slaps landlords with a $5,000 fine for a first offense and $10,000 for each subsequent violation tied to tenants selling unlicensed cannabis. The law taps into a political mood that assumes owners should have known what was going on behind their own storefronts. Property owners and their attorneys counter that they are being penalized even when, they say, they had no idea illegal sales were happening on site, as reported by The Real Deal.
The Adams administration’s "Operation Padlock to Protect," launched in May 2024, has become the sharp edge of that policy. The Mayor’s Office says the initiative has sealed nearly 1,400 illegal smoke and cannabis storefronts and led to the seizure of millions in unlawful product. City officials insist the closures are about public safety and clearing a fair lane for the licensed market to compete. The scope of the effort has also been highlighted in local coverage of nearly 1,400 shops shuttered.
At the state level, lawmakers have rewritten the rulebook, baking new enforcement powers into the budget and follow-on bills that put tight deadlines and civil penalties on property owners. Under those changes, landlords are expected to move quickly, with courts and enforcement agencies allowed to push them to start eviction cases, and the state is authorized to use liens and similar tools that can put mortgages at risk. The expedited procedures and penalties are spelled out in detail by the New York State Senate.
Seized Goods, Locked Doors
The padlocks are only part of the pain. When investigators shut a shop, they can seize cannabis and hemp inventory, which then falls under state control and leaves landlords staring at empty shelves with little leverage. The Office of Cannabis Management describes sealing orders, product seizures and other tactics as pieces of a coordinated interagency strategy to shut down unlicensed sales and safeguard public health. Popping a seal or removing a padlock without authorization is illegal, and OCM explains how owners can contest or address orders on the Office of Cannabis Management site.
Landlords Fight Back
Owners are not just shrugging and writing this off as the cost of doing business. Property holders and their attorneys have gone to court with lawsuits, collection actions and aggressive strategies aimed at clawing back unpaid rent and holding lease guarantors to their promises. In reported cases, lawyers say they have frozen tenants’ and guarantors’ bank accounts, served restraining notices and pursued levies on any remaining inventory after winning back possession in court, according to The Real Deal. The firm Rosenberg & Estis, which represents retail landlords in these disputes, says recent trial victories have delivered possession, use-and-occupancy damages and legal fees for clients facing padlock orders, per Rosenberg & Estis.
What Owners Can Do
For landlords who walk up to a storefront and find a big city seal on the door, the advice is blunt, do not wait. Owners are urged to begin eviction proceedings, document every interaction with tenants and regulators, and talk to counsel about garnishing guarantor assets or freezing bank accounts where appropriate. Guidance for landlords from the Office of Cannabis Management outlines a formal path to seek removal of a seal under Cannabis Law §138-b and explains the required paperwork and timelines to challenge an order, according to the Office of Cannabis Management. If a landlord fails to prosecute an eviction within the required statutory timelines, enforcement agencies or prosecutors can seek civil penalties or liens, as provided in the framework set out by the New York State Senate.
For City Hall, the crackdown has cleared hundreds of unlicensed storefronts, a result officials say improves safety and makes room for licensed dispensaries to finally gain traction. For many landlords, though, the same effort has meant fines, seized goods, tight legal deadlines and a costly scramble to recover keys, rent and basic control over their own spaces.
