New York Brand Leader Says Survival Will Be 'Tough' For Many Without More Stores

Nick Guarino: 'The bets are crashing down.'

One of the few New York marijuana licensees who’s been able to get his brands onto legal store shelves predicted to Green Market Report last week that a good number of existing companies could drop out of the market over the next year because of the low number of operational retailers.

“There’s just not enough stores,” said Nick Guarino, the CEO of cultivator, processor and brand parent company Naturae. “We’re in like 16-17 storefronts, and we need at least a critical mass of like 50 stores. So now, the issue becomes, how long can you hang on? What staying power do you have? Who can you go to? And everyone’s in a different situation.”

Guarino said the slow retail rollout, combined now with the court order that’s paused all new store openings until at least next month, has created a bottleneck that will be “tough” for many operators to weather.

And, Guarino estimated, farmers probably need double the exposure for a functional wholesale market.

“The critical mass required to have a working wholesale market, whereby people have the cash flow to buy crops ahead of time … it probably isn’t 50 stores for the number of cultivators we have. That’s likely in the hundreds of stores, to make that work. So this is going to be a very tough couple of years,” Guarino said.

He and many other companies have this year had to begin asking vendors to extend payment terms or renegotiate deals because of a lack of overall sales.

“This year, it’s been renegotiating, extending terms, suppliers for all the different inputs we have … have been super gracious, and have worked with us,” Guarino said. “A lot of the same game we had to deal with in hemp and CBD: extending terms and figuring out how to rob Peter to pay Paul.”

Guarino echoed a warning made earlier in the week by another grower, Grateful Valley Farm’s owner Tess Interlicchia, who said some farmers have already exited the New York cannabis industry.

“The expectations are so far removed from what reality is and what’s unfolded in 2023,” Guarino said. “The bets are crashing down, as big as they were.”

Now that the 11 large “registered organizations” have received the formal signoff by the state Office of Cannabis Management to enter the recreational market in December, he expects those large players – such as Green Thumb Industries and Curaleaf – will dominate the wholesale market in 2024. That’s because their indoor cultivation capacity will give them a significant advantage on price point competition that none of the other existing farmers will be able to keep up.

“It does mean that the wholesale market is going to get obliterated. That is the nail in the coffin for the cultivators, what the ROs are going to be able to do,” Guarino said.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.

 Sign up

About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


Recent Tweets

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.