An uphill climb

Major hurdles and unknowns abound for New York’s recreational marijuana market, but stakeholders remain optimistic

BY JOHN SCHROYER, GREEN MARKET REPORT

The New York state cannabis market is projected to be one of the biggest in the world, with some industry estimates forecasting sales to surpass $2 billion within just a few years. But the slow rollout and uncertain regulations—after all, the rules are still in draft form—leave many wondering if a large chunk of sales will continue going to unlicensed dealers.

On top of that, the state’s unclear timeline for when licenses will be issued and storefronts will be fully operational as well as concerns about how much consumers will be willing to spend once potency and excise taxes are baked in, among other hurdles, have given some stakeholders pause about how successful smaller players will be in the market.

“ is is a very optimistic time, but the business owner in me is very stressed out every single day on how I’m actually going to make this work,” said Brittany Carbone, a board member of the Cannabis Association of New York and the CEO of Tricolla Farms, near Ithaca. “ ere could be thousands of millionaires rather than a few billionaires created through the New York market, and the rst step is getting more people licensed.”

Cultivation licenses were the rst to be issued, but they were restricted to existing hemp farmers who could convert to growing marijuana to supply product rich in THC, the chemical that provides users with the sensation of being high, when the adult-use market launched. ere’s a long way to go, however. As of early January, the New York O ce of Cannabis Management had awarded 354 conditional licenses, made up of 279 growers, 39 processors and 36 retailers, on top of the 10 registered organizations, or ROs, that are allowed to sell medical cannabis. at includes 26 new adult-use retail licenses for four of New York City's boroughs and Long Island. (Brooklyn was one of ve regions where licensing has been delayed by litigation.) Each of those licensees can open three stores.

In addition, Manhattan, Queens, the Bronx, Brooklyn and Staten Island are already home to eight medical dispensaries, including three in Brooklyn.

It’s not clear when authorities will grant more permits; 903 applications were led for the rst round of retail licenses alone last year, so timing is a major question mark.

Not only that, but the sheer price di erence between the rst legal retailer in New York thus far— Manhattan’s Housing Works—and the enormous number of unlicensed dealers have some fearing that many companies won’t survive.

See HURDLES on page 12