Despite Early Access for Out-of-State Brands, In-State Hope Remains

Some retail permit winners say they plan to prioritize local.

In-state New York cannabis brands, especially smaller operations that are family run, might feel some apprehension about the news that out-of-state brands are already staking their claim in the Empire State’s legal marijuana market.

But grower Brittany Carbone, the CEO of Tricolla Farms, said there’s reason for hope. She said she already has met some retail permit winners who have told her they’re going to dedicate much or even all of their shelf space to New York-based brands, instead of to more high-profile brands from California or elsewhere.

Carbone guesstimated that it would be a “fifty-fifty split” between retailers that are focused solely on the bottom line – which means carrying whatever brands and products sell the best – and retailers that are interested in supporting small companies, such as the 280 distressed hemp farmers that are currently the only ones allowed to grow recreational cannabis.

“There’s some CAURD licensees I’ve spoken to who’ve made it clear they really want to prioritize New York brands,” Carbone said. “Being exclusive to New York brands isn’t realistic, but at least prioritizing that in terms of shelf space and co-packing agreements … is really important.”

Carbone said her own brand, Tonic, likely will be ready for sales this month, as will products from several other farms she knows.

Attorney David Feder also said there’s still plenty of reason to believe the small farmers and processors can make their own brands competitive with national companies. He pointed out that they’re the “gatekeepers” for the entire market, since retailers are only allowed to get product from the processors and cultivators.

But, the prohibition on retailers having their own in-house brands will be a major handicap for smaller operators, he noted, and a big edge for larger more well-capitalized players.

However, there’s probably “huge opportunity” for any retailers that do want to specialize in New York state brands, he said. That could be a prime differentiator for a smart businessperson, in part because the illicit New York market is already saturated with cannabis products made legally on the West Coast but then smuggled across the country to New York.

Binske President Alex Pasternack, for instance, said he saw his own products for sale at a bodega near where he lives in New York City, not far from Housing Works’ Manhattan location.

“I recently saw Binske on the shelves” at a smoke shop that wasn’t licensed by the state to sell recreational cannabis, which underscores that out-of-state brands have already had a very visible presence in New York for months, if not years, he pointed out.

“The reality is, if you go to the illegal bodega next door, that’s where you see all the California brands,” Pasternack said, as opposed to the two legal shops, Housing Works and Smacked Village.

John Schroyer

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