New York cannabis farmer Nicolas Guarino is battle-scarred from five years of mostly flailing in the national hemp-CBD market, but his six-year-old company, Naturae, now appears poised to do well in the recreational marijuana market, which has already skyrocketed sales for the company.
“It is early, but (sales have) been surprisingly high. We were counting on roughly $25,000 in sales per month per store, on average, and we’re closer to like $75,000 per month per store,” Guarino, the CEO of Naturae, told Green Market Report last week during an interview at MJ Unpacked in New York City.
“We went from from the last couple of years doing like $200,000 or $300,000 in sales per year. And it looks like we could close April now close to $400,000 in sales,” he said. “And we still have a lot more products coming.”
Guarino flirted with a bigger-name out-of-state brand that came to him looking for a way into the New York cannabis scene, but he instead opted to launch his company’s own in-house brand, Jaunty, in January – just a few weeks after Housing Works became the first adult-use cannabis retailer in the state on Dec. 29.
And because he was price-conscious and negotiated heavily with other farmers on wholesale prices for Jaunty vapes and edibles, Guarino said he’s so far been able to compete effectively with the much-cheaper illicit market products, which abound in New York City.
Jaunty vape cartridges, he said, are priced at $55, which after tax comes to about $62. Prices at most unlicensed smoke shops – which present the biggest untaxed and lower-priced competition for the state’s nine operational MJ retailers – range from about $40 to $60, he estimated.
“So we’re right there on the higher end of the unlicensed market,” Guarino admitted, but said Jaunty’s sales to date are evidence that New Yorkers are willing to pay slightly more for the quality and safety of a lab-tested vape cartridge.
The products are already available through the nine licensed retail shops operational so far, he said, but the biggest hurdle for his company and many others is the retail bottleneck. Brands and the upstream supply chain are desperate for more outlets through which to sell to customers.
There are already more than 100 brands available in New York state for retailers to choose from, and so Guarino said the landscape among his colleagues has already become “very competitive very quickly” when it comes to seizing shelf space.
As a flip side to that, Guarino said he expects several dozen of the 280 licensed cannabis farmers to exit the industry in the near future, because many haven’t been able to unload marijuana crops from last year and are having trouble finding buyers this year as well.
And a lot of those farmers, like him, have vivid memories of the hemp wholesale price collapse in recent years.
Naturae buys wholesale from eight of those farms, Guarino said, and they’re telling him that almost none of the licensed processors are actually paying farmers for cannabis biomass they’ve provided.
“It very much feels like a hemp 2.0, because it’s already happened in the state, where a ton of biomass for hemp was produced and there’s no buyers for it,” Guarino said. “The farmers are struggling a ton and a bunch of them are even considering just not going into the ground this year. They’re just saying like, ‘Well, I already put all this money up, I’ve already seen the story in hemp, and I was promised that this would be different. I’m just not gonna go into the ground.'”