Nutcrackers in Washington Heights are tasty but taboo.

“It’s very much like weed,” says Leo Fuentes, a Washington Heights native. “You have to know who to go to on a certain point of the block.  If you’re white, it’s like, ‘Who are you?  Why are you here?’”

A nutcracker produces a sugar high with an alcoholic kick.  The syrupy beverage comes in every rainbow-bright flavor, tastes like a spicy juice box, and is sold icy cold at bodegas and barbershops to locals who want to cool off and catch a buzz.

Nutcrackers are also mostly illegal.  Nearly all nutcracker brewers in Washington Heights mix and sell the drink without licenses, sometimes to minors.  So lawmakers have cracked down. This summer marked the first under the state’s new so-called Nutcracker Bill, which stiffened punishments for unlawfully distributing the drink.  Officials hoped harsher penalties would cripple the lucrative nutcracker market.

And it is lucrative.  Herbert Martinez, who calls his business Nutcracker Kings, has been selling the drink in Washington Heights and Inwood for six years.   He said he earns as much as $3,000 on holidays, peddling in parks, and pulls in about $400 on a typical day.  “I’d rather sell that then get a regular job,” he said.

But now that summer and nutcracker season have ended, the law’s effectiveness looks questionable.

“The nutcracker industry didn’t fade, it just evolved,” said Leo Fuentes, who has written extensively on the subject on his website, uptowncollective.com, and is co-producing a documentary, “Nutcracker Inc.,” about the drink and the community that birthed it.

Fuentes had his first slushy sip during a haircut.  It was 2000, St. Nicholas Avenue, and hot outside.  The hairdresser took a perspiring plastic bottle from a cooler and handed it to Fuentes.  His appointment took a turn for the tipsy.  “You get lured by its candy taste… Then you realize this is really strong,” Fuentes recalled.

His drink was on the house, but others paid $10 per 32-ounce concoction.  Fuentes said the stylist sold nutcrackers all summer, and eventually earned enough to buy two apartments, one to live in and another to house her nutcracker trade.  Selling the drink wholesale—$400 per five-gallon bucket—allowed her to open her own barbershop and hire six workers, said Fuentes.

On one of many webpages he’s dedicated to the nutcracker, Fuentes wrote that it reflects the “tenacity, hustle and determination of the Dominicans in particular and Latinos and immigrants in general.”

But the entrepreneur ran into problems as nutcracker knockoffs popped up around the neighborhood.  More dealers meant more attention, not the good kind.

State Sen. Andriano Espaillat noticed the nutcracker.  “The dangers of alcohol consumption for minors are even worse when they are sold in the form of sugary, colorful alcoholic beverages that are easy to drink but deceptively intoxicating,” Espaillat said in a press release last spring.

The nutcracker frustrated lawmakers.  Since the vendors didn’t have liquor licenses in the first place, authorities couldn’t revoke them.

To seal the loophole, Espaillat and Bronx Assemblyman Nelson Castro co-sponsored a bill to revoke whatever licenses nutcracker dealers held–barbershops, grocers–if they were caught selling liquor illegally.

The Nutcracker Bill also increased fines and jail sentences for those manufacturing or selling unlicensed alcohol.

Now, selling alcohol without a liquor license, a misdemeanor, is punishable by 60 days to a year in prison, or a fine equal to three times the cost of a liquor license in the county where the seller was busted.  (Previously, the fine was twice the licensing cost.)  Additional convictions bring higher fines, to a maximum of five times the licensing cost.

The fines can get steep.  The New York State Liquor Authority charges $4,552 to apply for a two-year New York County wine, beer and liquor license.

Espaillat and Castro’s bill passed on June 6, 2011, but wasn’t enforceable until 120 days later, missing the bulk of last year’s nutcracker season.  This was the law’s first full summer.

“We are sending a clear signal that there is nothing more important than the health and well-being of our young people,” said Espaillat when his legislation passed.

But the signal wasn’t clear enough, said Angelo Ortiz, coordinator of the UNIDOS Coalition, a 30-year-old youth organization at Inwood Community Services.

To Ortiz, nutcrackers are “still popular,” and the Nutcracker Bill is largely impotent.

“The problem with the bill is that there’s no money for enforcement,” said Ortiz.  “You can make the penalty a million dollars, but if there’s nobody enforcing it on the street, no one’s going to get busted.”

Leo Fuentes agreed.  Despite heavier penalties, the drink’s prevalence has only increased since first hitting neighborhood streets around eight years ago, Fuentes said.

“The legislation was targeted at businesses selling it—the barbershops, the salons,” said Fuentes.  “But people who sell nutcrackers are smart, involved.  If they were selling them outside, now they sell them inside.  If they sold them indoors before, they sell them outdoors now.”

Still, the new law wasn’t totally ineffectual; it might have discouraged some dealers from selling to kids, Fuentes said.

To Herbert Martinez, trusting your neighborhood nutcracker dealer has become vital.  “A lot of the time, people that sell these drinks in the streets will put drugs in it so that people get addicted and keep coming back,” he said. “I keep my drinks clean.”

The industry’s reputed champion earner retired a while back.  The entrepreneurial hairdresser’s business folded in 2004 when police raided her nutcracker-financed apartments, Fuentes said.

But the nutcracker isn’t going anywhere.   Martinez will keep selling as long as it remains popular, and he’s sure it will because “it’s cheap, tastes good and will get you feeling good for only 10 bucks.”