OCM said that it would distribute up to 150 conditional adult-use retail dispensary permits.
OCM said that it would distribute up to 150 conditional adult-use retail dispensary permits.
New York’s adult-use cannabis market expects to be immense once it reaches maturity. Various reports suggest the marketplace could earn between $1 billion and $3 billion annually in the coming years.
Success will be determined, in large part, by the state’s ability to address the unlicensed market, sometimes referred to as the legacy market. States like California and Colorado have generated high sales but continue to struggle with unlicensed grows and dispensaries.
New York’s Cannabis Control Board (CCB) and Office of Cannabis Management (OCM) have released legislation incrementally. In April, the state granted over 200 conditional marijuana cultivator licenses to existing hemp farmers. On June 1, the CCB approved its first set of packaging, labeling and advertising regulations. Plans have also been made to issue approximately the first 100 licenses to people most affected by the drug war.
No further clarity has been given regarding license availability. In the meantime, a surge of unlicensed dispensaries has begun to open. Stores include brick and mortar, pop-up and mobile sales sites using the state’s current grey area gifting laws. Numerous operators assume early launching is the natural step to gaining an adult use license. Others caution that such a measure may eventually bite aspiring legal operators.
Unlicensed stores and sellers are popping up across the state. No more so than New York City, which consumed 77.44 metric tons per year of pot per year, according to a 2018 study. Sources offered various broad estimates of how many operate in New York City today, with most answers ranging between 100 and over 1000.
The city has its fair share of licensed locations, with names like Curaleaf (OTC: CURLF), Columbia Care, MedMen (OTC: MMNFF), RISE and Etain, all having a presence across the boroughs. A search on Google reveals scores of unlicensed shops. A deeper dive via community cannabis contacts or a stroll in certain parts of the city will likely show others, including standalone sellers in the park and bodegas.
Most sources noted that tracking how many sellers operate in New York City today is difficult.
“If you include every bodega and smoke shop selling unlicensed and untested cannabis, it’s easily in the hundreds, if not the thousands,” said Mike Zaytsev, academic director for LIM College’s cannabis degree program.
Gregory M. Tannor, executive managing director and principal at real estate firm Lee & Associates NYC, said that when considering illegal shops and bodegas, “Every day there are new smoke shops opening throughout the city.”
If using recent OCM reporting, there were at least 52 illegal storefronts across the state as of early 2022. In July, five months after announcing it had sent out cease and desist letters, the OCM announced it issued 52 warnings to various unlicensed operators that you can read here. However, some outlets report that non-cannabis operators were named, calling into question the list’s accuracy.
Some unlicensed operators believe that if they open now, they are likely to win a retail license once the state begins issuing permits. Some offered caution to those individuals.
Kassia Graham, co-founder and social media director for Cannaclusive, said that the state is taking note even if it seems lax on enforcement. She feels that entering the market now only makes sense if the operator has no interest in becoming licensed. Graham expects the illicit market to continue in New York past legalization like in other states.
“We’ll continue to see a thriving legacy market due to the costs, compliance, and legal issues related to making the jump to the legal realm of the industry,” she opined.
Andrew Livingston, the director of economics and research at Vicente Sederberg LLP, offered a similar opinion.
“The risk of being disqualified for operating an illegal enterprise is not a significant cost to those who are not interested or do not have the ability to open a licensed cannabis business,” He said.
Livingston added that the allure of quicker revenue in the illicit market likely further fuels the interest of some illegal operators.
Potential licensing bans might not faze existing grey operators already doing well for themselves. LIM’s Zaytsev feels it’s safe to assume that operators will continue on if they already have success.
“Why would any of them stop,” he asked, adding, “They’re doing quite well, from what I’ve heard.”
Editors Note: This is a guest post.
Medical marijuana dispensaries are a vastly different business from recreational dispensaries. Most states have much more stringent licensing requirements for medical dispensaries, and dispensary staff requires more training and knowledge than the average recreational budtender. Yet, despite the extra hurdles required of medical marijuana dispensary owners, there are more markets where medical marijuana is permitted, giving greater opportunities to entrepreneurs in the medicinal space.
Whether you are interested in opening a medical marijuana shop of your own or are merely curious about the best places for medical marijuana shop owners, read on.
California is the largest and most populous state where marijuana has been legalized for recreational use, and it is the state with the longest-lived medical marijuana program. Both recreational and medicinal dispensaries have generated several billions of dollars in sales, despite fighting a booming black market. Because taxes for recreational weed are exorbitant and driving many adult recreational users away, entrepreneurs in this state should seriously consider starting with a medicinal shop, which is subject to lower fees and taxes. Even better, there are many counties and municipalities that have banned recreational marijuana businesses but permit medical marijuana use, so entrepreneurs in this space have greater access to less saturated markets.
Arizona is poised to pass recreational marijuana regulations, which means the state is on the verge of a major uptick in cannabis interest. Already, marijuana use has been on the rise in the state, with medical marijuana sales growing significantly in every year since 2016. Greater acceptance of all cannabis use throughout the state will undoubtedly drive patients toward medicinal marijuana, especially within the next few years. Both recreational and medicinal dispensary licenses are available to entrepreneurs interested in capitalizing on a market yet to see serious competition.
Oklahoma boasts one of the more fascinating medical marijuana programs in the country. Unlike other states, where patients must suffer from one (or more) qualifying health conditions, Oklahoma allows patients to work with their doctors to determine whether marijuana might be a viable solution to their health concern. As a result, it is much easier to get medical marijuana in Oklahoma — which means the medical marijuana industry in the state is booming. Though the market is smaller than in states like California and Oregon, Oklahoma’s medical marijuana industry is booming, and there aren’t nearly enough dispensaries to keep up with demand.
Though sparsely populated, remarkably rural and quite conservative in its politics, Alaska has enjoyed a long and generally positive relationship with the good green herb. Technically, the state was the first to legalize recreational marijuana — way back in 1975 — but a few complications thwarted recreational sales until 2014. Currently, the medical and recreational marijuana industries in Alaska are earning hundreds of millions of dollars per year, and considering that marijuana tourism in the state is also popular, there is plenty of promise for entrepreneurs in this area. However, it might be worth noting that while dispensaries do good business, growers in Alaska are in particularly high demand. Starting a grow op and running a partnered shop might be a lucrative model to ensure enough supply of medicinal-quality goods.
Though Oregon wasn’t the first state to pass any marijuana legalization, it has quickly become the nation’s posterchild of how marijuana regulation can go incredibly right. Oregon’s marijuana industry is perhaps the booming-est, generating record-breaking incomes for almost every month in 2020. Not only is the state’s dominant culture incredibly weed-friendly, but Oregon borders three states with remarkably strict marijuana laws and attracts millions of marijuana tourists every year. What’s more, Oregon weed growers are currently producing more bud than current dispensaries can manage, so there is plenty of space for entrepreneurs to hang their shingle and thrive. Plus, fees and taxes are much lower for Oregon cannabis business owners than they are in other states. If you can’t get ahold of a license, you should be able to find a licensed business for sale.
Even as recreational marijuana laws are enacted in more states, medical marijuana businesses will continue to be valuable and thrive. The sooner you open your medicinal weed shop, the sooner your establishment can see success.
If you are a beginner and want a quick harvest, you should choose autoflower seeds from reliable auto-flowering seed banks.
Curaleaf’s medical marijuana dispensaries used to have a decidedly clinical look about them. That has changed. Curaleaf’s adult-use stores have leveled up to a new modern stylish look. Green Market Report went on a road trip to Ware, Massachusetts to check out the new store look and talk to Curaleaf Massachusett’s President Patrik Jonsson. Thank you for watching the Green Market Report! Be sure to subscribe to our channel on YouTube.
As the pandemic stretches into more months, dispensaries are realizing that this might not be a temporary situation. Slapping up some plastic sheets isn’t a solution that will work for the long-term and it just doesn’t look nice. One company has incorporated new safety design measures in its dispensaries and it seems that these local level efforts could set a trend nationwide.
Led by the Guadagnino family (a family-owned business), Keystone Canna Remedies (KCR) is an MMJ dispensary chain in Pennsylvania that currently has 3 locations – Allentown, Bethlehem, and Stroudsburg (the Poconos). Its third dispensary in Stroudsburg, PA has included features in its design of the space by architect Ryan Welty of RGW Architecture, LLC to make sure both patients and employees are safe.
Since many medical marijuana patients are already dealing with immunocompromised conditions, it is even more important to protect them. The patients need to feel safe if they are leaving their homes to meet with a professional or get medicine.
KCR Stroudsburg’s design and policy measures included the following measures:
The cannabis industry is accustomed to making adjustments as rules and regulations are frequently changed. However, in this case, most dispensaries took it upon themselves to adapt to a new normal. In KCR’s case, during the height of the pandemic, it moved all patient transactions out of the dispensary buildings and into the parking lots to maximize social distancing. It moved staff around to fill areas of need. Some employees were tasked with being “runners” between the patient/caregiver in their parked car and counter staff.
Glass shields were installed to separate patients and staff at both the reception desk and the point of sale counters. Social distancing efforts inside the dispensary include signs and physical distancing markers which serve as reminders, and limited patient counts in our waiting area and our sales area.
These measures may have been enacted as a response to a deadly virus, but it really does make sense to protect medical marijuana patients as much as possible. It is likely that such efforts will remain in place long after the COVID-19 threat passes. If this virus could be so deadly, there is no doubt more viruses will be in our future.
With terms like “social distancing”, “quarantine”, and “safer at home” orders now common parlance thanks to the Covid-19 global pandemic, it seems an odd time to forge ahead with opening new retail establishments, yet several determined cannabis companies are betting on a better future and doing just that.
Small business website “The Balance” itemizes the expenses associated with opening a storefront, which include licensing fees, rent, inventory, staffing, and equipment to name a few. To open even a small business in an inexpensive city or town can cost thousands of dollars. Factor in the extra costs retailers will have to swallow to stay within Covid-19 guidelines for reopening such as plexiglass cashier guards, protective equipment for staff, and restrictions on the number of customers allowed in the store at any one time, and the overhead becomes untenable for many current and aspiring shop owners.
Despite these factors, companies like cannabis product manufacturer Green Thumb Industries, cannabis testing laboratory Cannasafe, and cannabis retailer Canna Provisions are expanding their enterprises.
Green Thumb Industries (OTC:GTBIF) announced that it would be opening its fourth retail location in the Las Vegas, NV area on May 13, as well as the eighth store in Illinois on May 28. This makes for a total of forty-five storefronts nationwide for Green Thumb, with four new locations opening since the Covid-19 crisis began.
Green Thumb’s approach involves an emphasis on efficient curbside pick-up and delivery strategies to safeguard customer and staff safety. In a May 26 press release about the new Illinois location, Green Thumb Industries founder and chief executive Ben Kovler stated that his company has “continued to move forward through the ongoing COVID-19 crisis to provide jobs and much-needed access to well-being through the power of cannabis during these difficult times, as demonstrated by the opening of Rise Niles, our fourth opening since the crisis began.”
Cresco Labs (OTCQX:CRLBF) opened Sunnyside River North, the first Illinois adult-use dispensary in Chicago in the prestigious River North neighborhood. Sunnyside opened for adult-use cannabis sales on May 28th for online orders and in-store pick up that day through a pop-up retail experience. “We are thrilled to be opening the first adult use store in Chicago under the state’s new legislation and to provide an example of what normalized and professionalized cannabis looks like with a location in a traditional business district, a local and diverse operating team and a tremendous amount of community input and support,” said Charlie Bachtell, Cresco Labs’ CEO and Co-founder.
Cresco Labs has said it has implemented procedures system-wide to eliminate wait lines, crowding, and social distancing during the COVID-19 pandemic and the River North location will launch with online orders only through Sunnyside.shop. Once customers receive a text notification that their order is ready, they can check-in at the Guest Experience Center at 22 W. Hubbard to be entered into the virtual pickup queue.
Meanwhile, Cannasafe has announced the opening of three new ISO-accredited laboratories in Oregon, Florida, and Illinois to help meet the increased demand for cannabis during the pandemic. Canna Provisions has opened a new storefront in Easthampton, MA with another in nearby Holyoke slated to open shortly. Another Lee, MA location shut down due to the pandemic will also be reopening. Canna Provisions is using a quick transaction model involving ID checks, a wireless ATM card reader, and frequent sanitizing to facilitate safe customer interface while offering additional support via Zoom links and instructional videos to help customers understand the new system.
These considered moves by some of the industry’s best-known names have all of the makings of successful ventures, especially given the attention to the potential infection hazards inherent in storefront retail. Still, as demand for cannabis continues strong and companies build capacity to meet that demand, it remains to be seen whether Covid-19 and a potential “second wave” will frame a gamble on the future of in-person sales as one worth taking or not.
In an attempt to discover which states within the U.S. are posting the biggest numbers in terms of marijuana dispensaries per capita, dispensary chain owner Verilife conducted a study spanning 600 cities. The company analyzed marijuana dispensary data from more than 600 cities with a population of at least 50,000 people within 36 states via state government health, cannabis, and recreational marijuana authority records up to Jan. 10, 2020.
Tax revenue from marijuana sales by state was also evaluated and showed that, to no one’s surprise, California led the pack with a whopping $345 million in marijuana-related tax revenue in 2018. Marijuana tax revenue data for Texas and Iowa was not available, and there are 16 states where such taxes were not collected.
As one of the first states to legalize medical marijuana, Oregon was a sure thing as the state with the most marijuana dispensaries per capita, with 16.5 dispensaries per 100,000 residents. Oklahoma came in a surprising second place at 15.6 dispensaries per 100,000, despite the fact that dispensaries were illegal in the state until 2018. Montana, Colorado, and Alaska rounded out the top five. The study points out that despite its second-place ranking for dispensaries per capita, Oklahoma generated the least amount of tax revenue in states where marijuana is legal.
From there, Verilife’s research breaks the numbers down city by city. Nine Oklahoma cities and eight Oregon cities made it into the top 30 for the largest number of dispensaries. In yet another twist, Missoula, Montana took first place as the city with the most dispensaries, with cities in Oregon and Colorado filling out the runner-up slots.
The study does not engage an in-depth analysis of some of the less expected outcomes, but at least one news outlet takes up the inquiry. In an interview for Oklahoma news station and NPR affiliate KGOU, reporter Drew Hutchinson spoke with Russel Ray, editor of The Journal Record. Ray shared that Oklahoma’s skyrocketing share of the dispensary market, which puts it ahead of even California, is due to a difference in licensing types (California has more than 100 types of licenses as opposed to Oklahoma’s “handful”) and licensing fees.
A license to open a marijuana dispensary in California can cost as much as $240,000 as opposed to $2,500 in Oklahoma. Also, in Oklahoma, there are no caps on the number of licenses that can be issued. Ray goes on to describe Oklahoma’s medical marijuana practices (such as criteria for determining the need for a prescription) as “somewhat lax” in comparison with other states where medical marijuana is legal. As for Missoula, Montana’s status as the U.S. city that boasts the most marijuana dispensaries, I could find no rigorous discussion about why this might be so.
For the time being, the numbers that surfaced from Verilife’s study paint an informative picture of the marijuana dispensary landscape today, but also makes it clear that when it comes to future rankings, it’s still anyone’s race.
MPX Bioceutical Corporation (CSE: MPX; OTC: MPXEF) announced that GreenMart NLV, LLC, a subsidiary of MPX, has been awarded four conditional retail marijuana store licenses in the state of Nevada.
GreenMart is a fully-operational cultivation, production, and kitchen facility that produces MPX-branded wholesale products for both the adult-use and medical markets in Nevada. The new dispensaries will operate under the “Health for Life” brand, which is the company’s flagship retail brand. Nevada recorded more than half a billion dollars in cannabis sales during the first year that adult use was legal, according to the Nevada Department of Taxation, exceeding many expectations.
MedMen (MMEN.CN) (MMNFF) announced that it has closed its previously announced acquisition of a dispensary license in Emeryville, California from B12, LLC.
MedMen paid a combination of cash at closing and shares of MedMen in an undisclosed amount. The transaction closed within 90 days of signing. With the closing of the acquisition, MedMen will have one of only two adult-use cannabis dispensary licenses issued in the City of Emeryville, just outside San Francisco. MedMen currently operates eight dispensaries in Southern California. The Emeryville dispensary will be located in the commercial heart of the East Bay and is expected to open in 2019.
In the last month, MedMen acquired additional licenses in Arizona. Through the acquisition of PharmaCann, MedMen will own an additional twenty-five licenses across 12 states (permitting operation of an additional 18 retail facilities and 7 cultivation/manufacturing facilities).
Liberty Health Sciences Inc.
Liberty Health (CSE: LHS) (OTCQX: LHSIF) opened its first South Florida dispensary in the heart of Miami. The new dispensary provides customers in Miami-Dade County, the most populous county in Florida, access to premium quality medical marijuana products and educational services.
Located at 6827 Bird Road, Miami, FL., the dispensary is on one of the oldest and busiest state roads in Miami, with traffic exceeding 70,000 vehicles per day. The company said that it is a primary artery that feeds the main suburbs in Miami such as Coral Gables, West Miami, South Miami, Westchester, and Kendall. In addition to the Miami location, Liberty plans to open 3 more dispensaries this month with more to come in 2019, all subject to the receipt of the Florida Department of Health approvals.
“Liberty remains committed to ensuring that its premium quality medical marijuana products and educational services are accessible to the more than 2.7 million people who call South Florida home,” said George Scorsis, CEO of Liberty Health Sciences. “When people come to our dispensaries, they know they will find the highest quality medicinal cannabis. They also trust that they are going to have access to the best brands in any category, including PAX and Mary’s Medicinals products.
The Super Bowl turned into a bonus day of sales for cannabis dispensaries. According to data from software company Flowhub, retailers saw a 32% increase in cannabis sales for the 2018 Super Bowl weekend versus last year’s Super Bowl weekend.
Compared to typical weekend sales, Super Bowl weekend sales jumped 7% and transactions climbed by 12%. Flowhub said that transaction sizes were getting smaller, but the volume of people buying marijuana for the celebration had increased.
“The rise in sales over Super Bowl weekend shows that Americans are continuing to incorporate cannabis into these national celebrations just as they would beer or even guacamole,” said Flowhub CEO Kyle Sherman. “Marijuana is becoming part of the fabric of American society and our national pastimes. I think we will continue to see this trend grow as legalization continues to spread.”
The top strains that were sold over the Super Bowl weekend included crowd favorites like Blue Dream, Gorilla Glue #4, Golden Goat, Durban Poison, Chem #4 OG. Perhaps hosts didn’t want to go too crazy and opted for fan favorites.
Dispensary owners shouldn’t be surprised that football lovers are big customers. They could have even capitalized on the holiday by offering Super Bowl specials. A study conducted by Consumer Research Around Cannabis and released in December found that cannabis consumers preferred the NFL over all other pro sports. The study found that 55% of cannabis users/buyers watched the NFL.
“The NFL has been the most successful professional sports league over the past couple of decades – supplanting Major League Baseball,” said Jeffrey Stein, Vice President of Consumer Research Around Cannabis. “In many ways, the league’s success mirrors our nation when it comes to income, age, and education.”
In 2018, cannabis delivery service Eaze experienced a 56% increase in deliveries compared to a typical Sunday over the past year. Eaze’s recently released State of Cannabis Report also found that more and more people are increasing marijuana use across all major holidays, which is a sign of evolving times and attitudes toward marijuana. This is only expected to continue as marijuana goes mainstream and many people celebrate traditional holidays – like Super Bowl, Valentine’s Day, or July 4th – with it.
A few did take advantage of knowing their customers’ preferences and ran specials. A sampling included Sunday Goods Delivery in Arizona that offered “Super Deals for Super Bowl Sunday” with a special on specific strains and swag. Chalice Farms offered Super Bowl specials of 25% off on flower and $4 pre-rolls. Inyo Dispensary in Las Vegas also offered a special on Pre-98 Bubba Kush with 5 free Bluebird pre-rolls.
Next year there may be a cannabis bowl in addition to the puppy bowl.
It’s the first marijuana unicorn in the country. California based MedMen recently received a $30 million investment from Captor Capital for 3% of the company placing the valuation of the currently private cannabis company at a billion dollars.
Chief Executive Officer Adam Bierman said MedMen is expecting an additional private investment in February that will make the valuation even higher. Following that, MedMen is planning on a reverse merger that will place shares on the Canadian Stock Exchange with the proposed symbol of MMEN. The estimated open of the publicly traded shares is expected sometime in the second quarter. “I used to say we were the biggest pot company in America and that was aspirational, now it’s actually true,” said Bierman. He went on to add, “It was a real heavy lift to get all the signoffs and go through all the governance we had to go through to do the roll-up.”
MedMen did not become a unicorn overnight. It was founded by company President Andrew Modlin and Bierman back in 2010 as a dispensary owner and consulting business. Then the company pivoted towards investments raising capital with the intent to put investors money to work towards various cannabis projects. In October 2017, MedMen announced it was planning on raising $250 million for the Opportunity II fund which would have made it the largest marijuana investment fund to date. Those plans were scrapped and MedMen pivoted again with the decision to go public.
“The second fund was doing better than the first fund,” said Bierman, “But it was going to take a year and a half to raise that $250 million. At the same time, a billion has been raised in the Canadian market.” Bierman said he had already been in discussions with various groups in Canada over the past couple of years and the timing finally felt right.
“It all lined up. The money being raised in Canada, California’s legal market and the number of people looking for a California play,” he said. Now when people invest with MedMen they are investing in the expansion of the brand, not outside investments.
MedMen believes it will be successful because it remains hyper-focused on just three markets. California, Nevada and New York. “We only compete in constrained markets where there is a high barrier to entry,” he said. He noted that Los Angeles will be trimming its 1,500 illegal dispensaries to approximately 200 licensed operators. “Even if it swells back to 500, it is still cutting down on the total,” he added.
Bierman also acquired licenses in New York for medical marijuana and has leased space on Fifth Avenue for a dispensary planned sometime in the future. In Nevada, three locations are planned, with one of those on the strip in Las Vegas. The Nevada market is already experiencing a heavy tourist trade and California is expected to see the same. New York is a heavily restricted medical market, but many in the industry are planting flags now for what they believe will inevitably become a recreational market. If that were to happen, New York is also expected to do a heavy tourist trade.
MedMen’s choice to stay focused on these three markets leads Bierman to believe it won’t suffer from the typical retail margin squeeze seen in other markets. In Washington, Oregon and Colorado dispensaries have faced market saturation causing falling margins and stiff competition. “For us, it doesn’t apply. The margins will only get better,” said Bierman.
MedMen currently has six locations open in California with a seventh planned. Three are in the process of being established in Las Vegas and should be on board this year. New York has three dispensaries operating in upstate with one planned for Manhattan, but no firm opening date. That puts MedMen at potentially owning 14 locations as of now.
By comparison, Native Roots in Colorado has 21 stores with 59 licenses in the Denver area. LivWell Enlightened Health has 14 locations open in Colorado and holds 43 licenses, plus it operates a dispensary in Oregon for a total of 15.
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