People are too lazy or unwilling to take the risk of starting a legitimate business—renting a storefront, investing in inventory, and paying taxes. Instead, they block the sidewalks selling cheap, illegally made knockoffs while the businesses that follow the rules are left to compete with them.
This sounds like every other government socialist program that ends in massive waste fraud and abuse. Poor people trying to get ahead in life cannot help themselves. They will find any avenue that gives away free or discounted shit and steal it all before those who actually needed can obtain it.