How to tell the difference between licensed and illicit dispensaries

legal vs illicit dispensaries

Cannabis legalization often means wider access in states that pass reform. Some states, like New York, see illicit dispensaries popping up like toadstools when adult-use legalization takes effect. 

While this typically is not the norm, it can lead to a lot of confusion for people seeking safe and tested cannabis products. How do they know who to trust?

New York City has hundreds if not thousands of unregulated cannabis shops, many of which may pass for legitimate establishments to unknowing consumers. Due to regulatory hiccups, there are only a handful of licensed dispensaries in the city—far fewer than the number of illegal ones. This can make it difficult to discern a state-approved dispo from a trap shop.

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For those who wish to support the legal market, there are several ways to tell whether a dispensary is legit. According to Mike Wilson, CEO and co-founder of cannabis retail design firm The Temeka Group, you can start with window shopping.

“If someone is walking down the street and looks in a store and sees the (cannabis) product, they may think, ‘That must be a legal shop, I can see the product.’ It’s the complete opposite. That’s the illicit shop. Because of regulations, you cannot see the product from the street,” Wilson told GreenState.

The Temeka Group has designed clever decals for legal dispensaries to display on their windows and doors, telling potential customers the business is licensed. Wilson hopes to make the designs obligatory, but until they are, consumers may be left to their own devices. 

Here are five questions to ask that could help you determine whether a dispensary is regulated. 

Did someone check your ID?

Licensed cannabis dispensaries are required to have staff check IDs for customers. They typically also have a holding area where guests must wait to be verified before entering the store. If you waltz right into a shop and no one seems concerned about your age, that’s a major red flag.

How are the products displayed?

In New York, live products must be kept under glass or behind the counter in sealed packaging. Jars of flower or hanging displays with edibles and carts are strictly forbidden. If you see anything like this, you can bet the store is illicit.

“You can’t serve customers bud from a jar deli-style. Flower has to be in a sealed package with the State of New York symbol,” Wilson noted.

What does the packaging look like?

Okay, so maybe you entered a shop, your ID was checked, and all the products were under glass. The next clue is the products themselves. 

Anything with a California cannabis symbol or testing sticker is immediate cause for concern. California brands have flooded New York despite the fact that cannabis cannot cross state lines. 

“Since interstate commerce does not exist in cannabis, anything from California is technically illegal,” Wilson explained. “It may have come from a legitimate source and sent to New York or it could be counterfeit. Either way, it’s against the law.” 

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How did you pay?

The majority of dispensaries are cash-only, but some will accept debit cards. This goes for licensed and unlicensed businesses. However, if a retailer offers the ability to pay with Venmo or Cash App, that’s a potential red flag. Payments for weed products violate these apps’ rules since cannabis remains federally illegal.

Was tax added to your bill?

New York’s cannabis law requires a 13 percent excise tax to be tacked onto all purchases. This is in addition to any local taxes that may be imposed. While some retailers may opt to price their products all-in, the exact amount of tax should be outlined on your receipt. Don’t see any tax added—or didn’t get a receipt at all? That’s a telltale sign you’re in an unregulated shop.

While most people are accustomed to buying cannabis from the legacy market, legalization promises a safer alternative. For people wanting to purchase products that are tested and in child-safe packaging, licensed dispensaries are the way to go. It may be tricky telling one from the other, but this guide should provide some hints on whether the store you’re in is bona fide.


Rachelle Gordon

Rachelle Gordon is a cannabis journalist and Editor of She began her weed writing journey in 2015 and has been featured in High Times, CannabisNow, Beard Bros, MG, Skunk, Cannabis and Tech Today, and many others. Rachelle currently splits her time between Minneapolis and Oakland; her favorite cannabis cultivars include Silver Haze and Tangie. Follow Rachelle on Instagram @rachellethewriter