Officials who oversee New York state's recreational marijuana industry say they will work with Gov. Kathy Hochul and the legislature to include additional resources to crack down on illicit dispensaries as legally licensed stores come online at a snail's pace — allowing thousands of illegal storefronts to open statewide.

In the nearly two-and-a-half years since adult-use recreational marijuana became legalized in New York, the state has 27 legal dispensaries open of more than 460 retail licenses issued to business owners.

"Obviously, the retail footprint is not sufficient at this moment, and I don't run from that fact," OCM Executive Director Chris Alexander said to lawmakers Monday. "We've got to open more stores."

Office of Cannabis Management officials defended to lawmakers Monday why there's thousands of illegal cannabis dispensaries in New York, overwhelming the slow-growing legal market. OCM officials say they don't know an estimate of the number of illicit stores statewide.

OCM says it has raided about 300 illegal stores in nearly five months since it got more enforcement power in the last budget.

"We've got a process now, but it's inefficient," Alexander told reporters after the hearing.

The office has completed the required hearings for 16 of those stores so far, and recent media reports show OCM has stopped holding more hearings for now. Alexander said the enforcement trials were paused while the agency works to tweak its enforcement regulations and ensure illegal marijuana retailers receive the maximum civil penalties, with fines starting at $10,000 per day, and rising up to $20,000 per day.

OCM expects to resume action on enforcement penalties in the next several weeks, Alexander said, but does not have a precise date or timeline for when.

He added legislative action is needed to improve speed and efficacy of inspections, seizures and support to legal retailers.

Senate Cannabis Subcommittee chair Jeremy Cooney says getting more licensed shops open while cracking down on illegal dispensaries is essential to reversing the state's troubled rollout of recreational marijuana.

"We know there have been some legal challenges across the way, but we have to do better," Cooney said. "If we do not speed this process up, if we do not address the lack of retail access in the state, both upstate and downstate, then the illicit market will continue to overcome and overtake the legal market. We've seen that in other states, we can't let that happen here in New York."

The last state budget passed in May imposed stricter penalties on unlicensed marijuana sellers, and gave more enforcement power to OCM and the Department of Taxation and Finance to fine and take action to close illegal stores. The budget allocated $5 million to hire an additional 37 OCM staff to focus on enforcement.

Alexander said OCM has tried to prioritize focusing enforcement on the more problematic illegal shops, or areas with greater population density.

But even penalized illicit stores have reopened without law enforcement knowing, or taking additional action.

"There's lot of shops, and we have a lot of work to do and that's what we're focused on doing," he said.

State officials and police admitted Monday they're struggling to keep up, and said they'll need more resources in the next state budget to curb New York's illegal market.

But lawmakers and officials alike continue to struggle with who manages and oversees penalties for illicit stores.

"If you see these illegal stores popping up, who do you call?" Cooney said. "And how long will it take for an action to take place?"

Cannabis sold at illicit dispensaries largely comes from California, and poses a public safety threat, the senator said, as the marijuana flower and products were rejected by California's laboratories and are more likely to have heavy metals, pesticides or other harmful contaminants.

With a lack of legal dispensaries open, farmers continue to financially struggle as many sit on hundreds of pounds of unused marijuana flower harvested last year — a concern that many say threatens to bankrupt them as they prepare to harvest this year's crop with little change in the number of places to sell it.

Sen. Cooney said there's at least 250,000 pounds of marijuana legally grown in the state last season that's languishing and losing potency as it remains unsold.

OCM plans to extend allowing cannabis farmers to partner with licensed retailers and sell their products at approved public events, known as Cannabis Grower Showcases. The change, first made in July, expires Dec. 31.

Members of the Cannabis Control Board are working on a resolution to allow the sales at public events to continue in 2024.