New York’s Weed Stores Are Exposing Banks to Illegal Drug Sales

The proliferation of unlicensed marijuana stores across New York City the last two years has had an unexpected consequence for banks and real estate owners: Many are now intertwined in the cannabis business.

The shops appeared slowly and then seemingly all at once, with the unlicensed sellers taking advantage of a regulatory vacuum in the aftermath of the state’s 2021 legalization of recreational marijuana. There are now as many as 2,000 in the five boroughs, even though the unauthorized sale of cannabis products is illegal.

More than two dozen landlords had multiple unlicensed sellers as tenants, according to an analysis by Bloomberg News and real estate ...