New York Archives - Green Market Report

Debra BorchardtDebra BorchardtApril 16, 2020
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4min8120

As part of its announced organizational overhaul, Canopy Growth said it will cease its farming operations in SpringfieldNew York, due to an abundance of hemp produced in the 2019 growing season.  The company said it will continue using this supply to produce hemp-derived CBD products for the US market.

Just one year ago Canopy announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. It has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY. That was back when Bruce Linton was the CEO.

The company said that design development would begin immediately with construction expected to start this summer. Canopy said in a statement that its vision for the property is to build the infrastructure necessary to support hemp-derived cannabinoid extraction and related manufacturing together with providing an opportunity for participation by other businesses in the hemp industry.

In a boost to the New York cannabis industry Canopy said it would begin hiring senior leadership in late 2019 and recruit the full workforce in mid-2020. Canopy Growth also noted that it had also begun securing farm capacity to supply enough hemp for its own future extraction and formulation activities within the park. The company intended to prioritize farms within New York State for the supply of hemp at this site.

New York State granted a hemp license to Canopy Growth in January of 2019, allowing Canopy to establish operations in the state and build a facility for hemp-derived cannabinoid extraction and processing for various applications. The new hemp facility will be capable of producing tons of hemp extract on an annual basis.

Tax Break

In November, Canopy was told it would receive a standard 15-year payment-in-lieu-of-taxes deal, qualifying for a 39% reduction in property taxes for the first five years of the agreement. When all is said and done, their tax break will equate to $1.7 million.

According to the Binghamton Press, starting in 2020 and until 2024, Canopy was expected to pay $192,000 in property tax payments versus a full tax bill of $312,000. From 2025 through 2029, the payments will be $252,000. Beginning in 2030 through 2034, the company will pay $282,000.

Go Farm Hemp filed a $1.9 million lawsuit last month against Canopy Growth with regards to the New York farm. Canopy paid the deposit for the agreement and two installments but failed to pay the third installment that was due August 15, 2019. Canopy was accused interfering with Go Farm’s performance by “threatening seizure of Go Farm’s crops and property without any right or authority” according to the lawsuit.

 


Gretchen GaileyGretchen GaileyJanuary 29, 2020
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3min5080

Governor Andrew Cuomo (NY) announced his plans to legalize cannabis for adult use in his state budget speech last week. He made the announcement with such enthusiasm some think legalization is an actual possibility this year. A major stumbling block in 2019 was sorting out the social and criminal justice issues that come with cannabis legalization, it will be so again this year.

Can the Empire State overcome the usual pitfalls and set up a market that will finally address those disproportionately affected by the War on Drugs?  Unlikely.

If we look closely at the Cuomo cannabis plan there are red flags. According to Cuomo’s budget, “the program will limit the number of producers and retail dispensaries to guard against a market collapse.” 

That may sound good but time and again states that have limited licensing markets face serious product shortages, increased consumer cost, and greater startup expenses that ultimately keep illicit markets going. 

Fewer licenses at higher costs mean fewer entrepreneurs. In many markets the initial capital requirements are so high minority entrepreneurs can’t compete. 

Cuomo says that he wants to “encourage equity through craft growers and cooperatives, and provide training and incubators to ensure meaningful and sustained participation by communities disproportionately harmed by cannabis prohibition.” If you read between the lines, that means the minorities who cannot meet the state’s high standards for a license will be thrown a bone and be allowed into a collective of other potential unworthy license holders who won’t be able to compete with the deep pockets of more established brands. None the less, come election day, it may seem to some that the Governor kept his promise for social and criminal justice.

The budget also says, “the Office of Cannabis Management will administer social equity licensing opportunities, implement an egalitarian adult-use market structure….” 

The fastest way to develop an egalitarian cannabis model is unlimited licensing, low barriers to entry, access to capital, ending “grandfathering” of medical market license holders, and a strict government agency that ensures access to minority entrepreneurs and polices abuse like shell companies scooping up licenses. 

While a truly free market is the American way, that free market needs to be tempered with reasonable regulation.  However, that regulation should not limit the number of licenses, or make licenses inaccessible to less established entrepreneurs.


William SumnerWilliam SumnerJuly 30, 2019
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4min25940

On July 29, 2019, New York Gov. Andrew Cuomo signed into law a measure that reduces the penalties for cannabis possession.

“While the failure to pass a comprehensive legalization bill is an unfortunate loss to the taxpayers of New York, the decriminalization of small amounts of cannabis is significant progress for social justice initiatives, an underreported aspect of the legalization movement,” said Evan Eneman, CEO of MGO|ELLO Alliance, a cannabis finance and banking firm.

Although New York decriminalized the possession of 23 grams or less of cannabis in 1977, tens of thousands of New Yorkers have still found themselves arrested and charged with possessing small amounts of cannabis. Between 2008 and 2017, approximately 360,000 people have been arrested for cannabis possession, the majority of which have been persons of color.

“Communities of color have been disproportionately impacted by laws governing marijuana for far too long, and today we are ending this injustice once and for all,” Cuomo said in a statement. “By providing individuals who have suffered the consequences of an unfair marijuana conviction with a path to have their records expunged and by reducing draconian penalties, we are taking a critical step forward in addressing a broken and discriminatory criminal justice process.”

Though the majority of New York residents support cannabis legalization, the state legislature failed this year to pass a full-legalization bill. The primary reason for the bill’s failure was to due to disagreements over diversity requirements for licensees. To many, the recently passed decriminalization bill is seen as a stop-gap measure while the legislature works out the details of full legalization.

The new law reduces cannabis possession to a violation punishable by a fine and removes criminal penalties for cannabis possession under two ounces. The measure also creates a process for individuals charged with cannabis possession to have their records expunged, both retroactively and for future convictions.

Individuals caught possessing cannabis will be fined $50 for the first offense and fined $200 for a second offense within three years of the first violation. Those caught for a third time within three years will be subject to a $250 fine and/or 15 days in jail. The new law will go into effect on August 29, 2019.

Medical Marijuana Inc.’s (OTC: MJNA) Dr. Stuart Titus said, “New York has a history of leading the way in many legislative policies for the U.S. and we hope that this new decriminalization measure in New York will set an example for other states, and the federal government to follow.”

The illegal nature of cannabis hasn’t frightened the investors away. Eneman added, “The cannabis industry isn’t waiting for regulators to catch up, as demonstrated by the record-setting pace of venture capital investing, as detailed in the MGO | ELLO Cannabis Private Investment Review. The report shows investment exceeding $1.3 billion already through the first half of this year as compared to $1B in total in 2018. Investors have a strong appetite for cannabis and they aren’t letting roadblocks like legalization stand in their way.”


Debra BorchardtDebra BorchardtApril 29, 2019
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4min28070

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. It has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY.

The company said that design development would begin immediately with construction expected to start this summer. Canopy said in a statement that its vision for the property is to build the infrastructure necessary to support hemp-derived cannabinoid extraction and related manufacturing together with providing an opportunity for participation by other businesses in the hemp industry.

“As we establish a stronger foothold in the exciting US market, we want to do so in a way that prioritizes local vendors and creates meaningful career opportunities for people in the communities where we operate,” said Bruce Linton, Chairman & co-CEO, Canopy Growth. “The vision for our investment is to create an eco-system that inspires new entrepreneurs and generates more economic stimulus than a single company can offer. As we build the facilities, we’ll also attract like-minded businesses who share our excitement for the emerging hemp and hemp-derived cannabinoid markets.”

New York State of Mind

In a boost to the New York cannabis industry Canopy said it will begin hiring senior leadership in late 2019 and recruit the full workforce in mid-2020. Canopy Growth also noted that it has also begun securing farm capacity to supply enough hemp for its own future extraction and formulation activities within the park. The company intends to prioritize farms within New York State for the supply of hemp at this site.

“We welcome Canopy Growth to Broome County with open arms. We haven’t seen an investment like this in Broome in some time, and we’re so excited a company like them is setting up shop in our area,” said Broome County Executive Jason Garnar. “With Canopy Growth coming to Broome County we look forward to seeing the benefits in job investment.”

Now that Canopy Growth has secured its building, the company said it expects to begin work quickly on Pine Camp Drive and with local construction teams retrofitting the facility, operations will scale-up quickly. It was once a vacuum parts building. It is expected that the operations will create hundreds of new local full-time positions, in addition to the contracted construction workers.

NY Hemp

New York State granted a hemp license to Canopy Growth in January of this year, allowing Canopy to establish operations in the state and build a facility for hemp-derived cannabinoid extraction and processing for various applications. The new hemp facility will be capable of producing tons of hemp extract on an annual basis. In 2018, Canopy Growth acquired leading hemp research company, ebbu, Inc. The R&D, along with ebbu’s Intellectual Property will be applied directly to Canopy Growth’s hemp and THC-rich cannabis genetic breeding program and its cannabis-infused beverage capabilities.

Canopy also said in its statement that it will begin approaching third-party organizations to join the ecosystem. Canopy Growth is eager to attract businesses and researchers focused on every application of the hemp crop such as fibers, seeds, and hemp-derived cannabinoids.


Video StaffVideo StaffJanuary 18, 2019

3min12150

Green Market Report asks that you sign up as a sponsor on our Patreon page and let’s keep the news alive and unbiased.

Also, Green Market Report released its fourth quarter review on the Cannabis Company Index. Head to the website and read what is one of GMR’s most popular reports.

Ohio began sales of medical marijuana this week. Sales were reported as brisk and lines were long, but the patients said they were happy and supplies held out. Acreage Holdings (CSE: ACRG.U) and Greenleaf Apothecaries both opened dispensaries

New York Governor Cuomo said he hoped to have adult cannabis legalized within 100 days. That doesn’t mean products will be for sale in a few months, it just means legislation could happen. Expect several more months before any retail stores open.

This week, Tilray (TLRY)  signed a $100 million deal with Authentic Brands to provide CBD for any of the company’s product lines. Authentic licenses companies like Nine West and Juicy Couture. This comes just one week after DSW said it was working with Green Growth Brands  to sell its CBD products

MedMen released its unaudited revenue figures for its second fiscal quarter. systemwide revenue increased 40% sequentially to $29.9 million. The company said that if it included pending acquisitions that revenue number would be $49.5 million. Official results will be posted in February.

TILT closed the Jupiter and Blackbird transactions this week. Through Jupiter, TILT has a “bird in the hand” vape hardware business expected to drive roughly $200m in revenues in 2019 as vape demand continues to accelerate. Blackbird brings wholesale distribution capabilities in CA and NV that can be propagated into additional markets as well as leveraged longer term with the company’s Baker CRM to expand TILT’s wholesale footprint.”

Golden Leaf terminated its plan to buy Sweet 16 license.

HEXO Corp. said that its common shares have been approved for listing on the NYSE and will begin trading at the open of markets on January 23. HEXO’s shares will trade on the NYSE American under the ticker symbol “HEXO”, the same symbol the Company’s common shares currently trade under, and will continue to trade under, on the Toronto Stock Exchange.


Debra BorchardtDebra BorchardtJanuary 16, 2019
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15min110961

New York State Governor Andrew Cuomo announced his plan to legalize adult use cannabis in 100 days. The governor did not provide a lot of details but suggested it would continue to be a restrictive program.

Of course, New Jersey also said it would legalize adult use cannabis but then found it has taken much longer to make adjustments to the rules and regulations of a conservative medical cannabis program. Cuomo did note that consumers would need to be over the age of 21 and he was very supportive of towns cities having the ability to opt out of allowing cannabis businesses.

In December the Governor said, “The fact is we have had two criminal justice systems: one for the wealthy and the well-off, and one for everyone else. He also said that law enforcement “for too long targeted the African-American and minority communities.”

On May 15, 2018, New York City Comptroller Scott Stringer published a report estimating the potential size of the state’s legal cannabis market and how much tax revenue it would generate for both the city and the state. According to the report, the New York State cannabis market could see up to $3.1 billion in annual sales, with up to $1.1 billion being generated in New York City alone. In terms of tax revenue, legal cannabis could generate up to $436 million for New York state and $336 for New York City. Some lawmakers have even suggested this money could be used to fix the troubled subway system.

A new report from ArcView and BDS Analytics is estimating the New York cannabis market could reach $1.6 billion by the year 2022, a big jump from the expected $263 million in sales for 2018. This would be the fourth biggest market in the U.S. The biggest market is California, followed by Colorado and Florida respectively.

“Let’s legalize the adult use of recreational marijuana once and for all,” he added.

During the midterm elections, the New York State government shifted to Democratic control and it was expected that the new lawmakers would fully legalize cannabis. The efforts by Cuomo as expected to be approved in Albany. The tax revenue and jobs from fully legal cannabis would be a big boost to some of the needy areas in the state.

Just this week, Canopy Growth (NYSE: CGC) said it was going to spend $150 million to build its first production facility in the U.S. after getting a license to grow hemp by New York.

Canopy Growth Corp. will spend as much as $150 million to build its first production facility in the U.S. after the Canadian cannabis company was granted a hemp license by New York state. “I applaud the political leadership at the federal and state level that has allowed today’s announcement to become reality,” Canopy Chief Executive Officer Bruce Linton said in a statement.

The company said it was reviewing locations in the Southern Tier region of New York State and said it would announce the winner within 100 days.

Cuomo is under pressure to create jobs in depressed areas in upstate New York and cannabis jobs fit the bill. A study, published by Joblift, shows that cannabis growth in California is “steadily declining,” while New York State is experiencing strong growth. New York is now third in terms of gross domestic product and is experiencing a “surge in medical marijuana job postings,” with the study saying it could hold “the most potential for overall growth in the sector.” New York experienced two times more job postings (155 vs. 67) in the first half of 2018, compared to the prior year.

Next comes the question investors want to know. Who is poised to capitalize on the New York market? Cannabiz Media is a company that tracks license holders in states around the country.

Figure 1Provided by CannaBiz Media

 

 

Company Symbol
MedMen Enterprises CSE: MMEN
Vireo Health Private Company
Columbia Care Q1 2019 Est Public Date
Etain Health Private Co.
Acreage Holdings CSE: ACRG.U
Fiorello Pharmaceuticals Private Company
iAnthus CSE: IAN
Curaleaf CSE: CURA

 

MedMen Enterprises

According to their data, it looks like MedMen Enterprises Inc. (CSE: MMEN) (OTC: MMNFF) is poised to be the big winner as a result of its acquisition of PharmaCann, which had the highest number of permits awarded in the state. MedMen acquired PharmaCann for $682 million in an all stock deal back in October. It not only doubled the reach for MedMen, but expanded its presence in New York.

MedMen had acquired New York’s struggling Bloomfield Industries at the beginning of 2018. The company had been unable to pay vendors and was looking for new investors. Bloomfield was one of the original five licensees in New York.

“MedMen is proud of its record of providing high quality products and shopping experience to medical marijuana patients in the state of New York and customers around the U.S. We believe that as New York moves to become the 11th state in the union to legalize adult use, the wealth of experience and knowledge MedMen brings having operated in other highly regulated and complex markets is an asset to the state,” said spokesman Daniel Yi. “We also believe that in order for an adult use cannabis market to flourish and thrive in New York, there needs to be a clear path for participation in ownership and jobs for new entrants to the industry. There also needs to be access to resources and capital for such new operators in communities disproportionally impacted by the war on drugs, and more specifically the prohibition of marijuana. MedMen stands ready to work with the state and to be a proactive partner with others in the community to build a sustainable and inclusive cannabis program.”

Vireo Health

Vireo Health is next on the list. Vireo  is  a physician-led multi-state medical cannabis company, that says “It is committed to safely alleviating pain by providing patients with best-in-class cannabis products and compassionate care.” Unfortunately for investors, this company is still private. Although it did raise $17 million back in August and the company said that it was planning on going public at some point.

Vireo is still making headlines as formers executives were set to go to trial at some point this year for smuggling cannabis oil from Minnesota to New York. The company was trying to move inventory to meet a New York deadline and the move was exposed due to a whistleblower. Dr. Laura Bultman and Ronald Owens, the company’s former chief medical officer and chief security officer.  face felony charges of smuggling $500,000 worth of cannabis oil into New York. They face up to two years in jail and a $3,000 fine for violating Minnesota state medical marijuana laws.

Columbia Care

Next in line for number of permits is Columbia Care, which is expected to go public in the first quarter of 2019 following a merger with Canaccord Genuity Growth (CGGC), a special purpose vehicle.  In October it was announced that the two companies would combine. The companies agreed that CGGC would be valued at C$60.7 million and that Columbia Care would be valued at US$1.35 billion. The deal is expected to close in the first quarter of 2019.

Columbia was selected to be one of five licensees in Virginia and became the first U.S. company licensed in the European Union. It was recently awarded one of the six new licenses in New Jersey.

Etain Health

Etain Health is one of the original five licensees in New York and it too remains a private company. It is female-owned only recently began to expand beyond the state lines as it looks to California as another market for its products.

Acreage Holdings

Acreage Holdings, Inc. (CSE: ACRG.U) (OTC: ACRZF) also stands to benefit due to its ownership of New York Canna, now known as Terradiol New York. New York Canna was originally formed  in 2015. The initial shareholders of New York Canna, Inc. were intended to be New Amsterdam Distributors (NAD) and EPMMNY. However, NAD and EPMMNY were unable to reach an agreement as to EPMMNY’s contributions to the operating entity and the terms of investment. NAD says it was the sole shareholder of New York Canna when it began talking to Acreage among others.

EPMMNY doesn’t agree with this assessment and recently filed a lawsuit asking for $400 million. EPMMNY says in its lawsuit that it was “frozen out” in 2016 and its stake reduced initially to 12.5% as NYCANNA merged with defendant NY Medicinal Research & Caring, which included NYCI Holdings, Impire Holdings and Acreage Holdings as investors.

Fiorello Pharmaceuticals

Firorello Pharmaceuticals also known as FP Wellness is a New York State only licensee. It is privately owned. The company lists its partners as The Clinic, Plant Consulting Group and LIU Pharmacy on its website. A report in the Daily Gazette said that Fiorello is building a medical marijuana production facility in Glenville and plans to open other dispensaries in Monroe, Nassau and New York counties.

iAnthus

Valley Agriceuticals was supposed to be sold to iAnthus Capital Holdings Inc. (CSE: IAN) (OTC: ITHUF) in 2017  for $17.3 million, but that deal was never closed. iAnthus then acquired New York’s Citiva Medical for $18 million at the beginning of 2018. According to the original press release, Citiva NY’s license included a cultivation and processing facility and four dispensary locations to be located in Brooklyn, Staten Island, Dutchess County and Chemung County. Citiva’s proposed 2,000 square-foot flagship Brooklyn dispensary was slated to open in Q4 2018, and would be one of only two dispensaries located in New York City’s most populous borough, with 2.6 million residents.

The statement said that Citiva’s Staten Island dispensary, would be the only Registered Organization serving Staten Island’s 500,000 residents and it was also slated to open in Q4 2018. The Dutchess County and Chemung County dispensaries are planned for the second quarter of 2019.

Curaleaf

Finally, Palliatech, which changed its name to Curaleaf Holdings Inc. (CSE: CURA) (OTC: CURLF) is based in Boston MA. It has locations in seven New York counties. Its website says more counties are coming. Near Manhattan there is a dispensary in Forest Hills in Queens. In the company’s last earnings announcement, it said that it estimates it will post revenue of $400 million in 2019 including revenue generated by the non-profits, and free cash flow of $100 million. Curaleaf expects to complete two acquisitions in the fourth quarter of 2018 in Maryland and Massachusetts. At the end of 2018, Curaleaf also expects to have at least 40 operational stores.


Debra BorchardtDebra BorchardtDecember 17, 2018
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4min12981

New York State Governor Andrew Cuomo presented his 2019 agenda on Monday morning to the New York Bar Association and it included his plan to legalize adult use cannabis.

“The fact is we have had two criminal justice systems: one for the wealthy and the well-off, and one for everyone else,” Mr. Cuomo said before introducing the cannabis proposal, describing the injustice that he said had “for too long targeted the African-American and minority communities.”

“Let’s legalize the adult use of recreational marijuana once and for all,” he added.

During the midterm elections, the New York State government shifted to a Democratic control and it was expected that the new lawmakers would fully legalize cannabis. There have been estimates that legalizing cannabis could bring in an additional $1.3 billion in annual tax revenues with $336 million for New York City alone.

It was reported in several New York publications that some lawmakers were considering the tax revenues as a way to pay for upgrades and expensive maintenance projects in the subway. “The biggest issue we hear about as elected officials is the state of the subway system,” Corey Johnson, the City Council speaker, said in an interview with the New York Times. “To be able to tie these things together is something that could be highly impactful and potentially transformative.”

This would be a huge shift from the Governor who has tapped the brakes on any effort to fully legalize cannabis in the state. Cuomo was also quoted in the past to say that he believed marijuana was a gateway drug.  While the Governor did sign medical marijuana into law, the program was very restrictive. Lawmakers were willing to make concessions at the time to the Governor in order to get the legislation passed.

“This is a much different year given the assault of the federal government,” Governor Cuomo said to 1010Wins Radio. “There’s no doubt that New York has to stand up for itself and we have to fight Washington and we have to protect ourselves and we need state laws that do that.”

Polls also show support for legalization with 62% in favor. The NY Health Department has also recommended legalizing cannabis. The Governor held “listening sessions” throughout the year in order to get the public’s opinion on legalization, but maintained he was against recreational cannabis.

“The goal of this administration is to create a model program for regulated adult-use cannabis — and the best way to do that is to ensure our final proposal captures the views of everyday New Yorkers,” said Cuomo spokesman Tyrone Stevens.


Video StaffVideo StaffAugust 13, 2018

3min14990

iAnthus Capital Holdings (ITHUF) recently broke ground for its new medical marijuana facility in Warwick, New York. The company and its subsidiary, Citiva are celebrating the groundbreaking of its medical cannabis facility.

Citiva is one of only ten licensed medical cannabis producers in New York State. This location used to be the Mid-Orange Correctional Facility, and will eventually support up to 125,000 square feet of total cultivation and processing space, with an estimated yearly medical cannabis production of 2,400 kg.

“We’re excited to be taking the first steps in building out our robust and comprehensive medical cannabis program in the State of New York. The iAnthus and Citiva teams have worked incredibly hard to reach this milestone,” said Hadley Ford, CEO of iAnthus Capital. “The growth and success of our Warwick facility will lay the foundation for the rest of our operations across New York State, and we look forward to continued expansion, development, and most importantly, service to our patients, through our vertically integrated operations.”

According to the company statement, Phase 1 of the buildout is projected to be completed in the first half of 2019. The Warwick site can eventually support up to 125,000 sq. ft. of total cultivation and processing space and will be built out in several phases. Citiva purchased the eight and a half acres of land for the Warwick facility in May of 2018 for US$526,000.

Warwick is pleased to welcome one of the nation’s leaders in the medical marijuana industry to the Warwick Technology Park and is honored that Citiva has found a home in our town,” said Michael SweetonTown of Warwick Supervisor. “Our goal in acquiring the Mid-Orange Correctional Facility was to bring well-paying jobs to the area, and we look forward to seeing this come to fruition through the official groundbreaking of Citiva’s medical cannabis facility.”


William SumnerWilliam SumnerMay 16, 2018
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As the debate to legalize cannabis in the state of New York rages on, one report offers to shed some light on the financial incentives that come with legalization. On May 15, 2018, New York City Comptroller Scott Stringer published a report estimating the potential size of the state’s legal cannabis market and how much tax revenue it would generate for both the city and the state.

According to the report, the New York state cannabis market could see up to $3.1 billion in annual sales, with up to $1.1 billion being generated in New York City alone. In terms of tax revenue, legal cannabis could generate up to $436 million for New York state and $336 for New York City.

In order to estimate both market size and potential tax revenue, Stringer used several different data points. First Stringer used data from a 2012 survey conducted by the New York City Comptroller’s Office, which estimated the size of New York City’s cannabis market to be approximately $1.65 billion.

Stringer then used aggregate data on marijuana sales in both Washington and Colorado to help improve estimates. Although both New York City and state have larger populations that Washington and Colorado, Stringer estimates that a smaller segment of the New York population uses cannabis.

It is estimated that only 8-10% of New Yorkers use cannabis on a monthly basis; compared to the 17% of Colorado adults and 11% of Washington adults. With the estimated rates, Stringer was able to determine that approximately 1.5 million New York residents use cannabis, of which an estimated 550,000 live in New York City. These estimates do not include the nearly 1 million individuals that work in New York City but commute from out of state, nor does it account for out of state and international tourists.

To estimate tax revenue, Stringer devised a tax structure based off of what other states with legal adult cannabis sales have. Under this theoretical tax structure, state-wide cannabis sales would carry a 10% excise tax on top of the normal 4% state sales tax. Like many other states, cities and municipalities would be free to levy local cannabis taxes up to a certain percent; in this case 25% would be the ceiling.

Assuming both New York City and state were to implement this tax structure, legal adult cannabis sales would generate $336 million and $436 million in tax revenue, respectively. In a statement, Stringer said that aside from the tax revenue generated by cannabis, legalization would also go a long way towards reducing public safety costs and reducing “a source of harm that has afflicted communities of color for so long.”

“This is not just about dollars – it’s about justice. Not only is marijuana an untapped revenue source for the City and the State, but the prosecution of marijuana-related crimes has had a devastating and disproportionate impact on Black and Hispanic communities for far too long,” said New York City Comptroller Scott M. Stringer. “There is simply no reason for New York to be stuck in the dark ages. This new analysis shows just how much New York City and State stand to benefit by moving toward legalization.”

Stringer went on to note that a legalization bill has already been submitted to the state legislature by Sen. Liz Krueger and Assemblywoman Crystal D. Peoples-Stokes, which is called the Marijuana Regulation and Taxation Act.

Separately, New York City’s Mayor Bill DeBasio called for the New York Police Department to overhaul its marijuana enforcement policies within the next 30 days. The New York Times recently published a story about racial disparity and marijuana arrests. It turns out that 86 percent of those arrested for low-level marijuana possession were either black or Hispanic.


William SumnerWilliam SumnerFebruary 1, 2018
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4min12420

iAnthus Capital Holdings, Inc. (IAN) is poised to take a bite out of the Big Apple. On Feb. 1, 2018, the company announced that it had acquired Citiva Medical, LLC (Citiva NY), which holds one of New York’s 10 vertically integrated medical marijuana licenses, and Citiva, LLC (Citiva USA), which owns various assets and intellectual properties in the cannabis industry.

The total value of this acquisition was $18 million. Citiva NY was acquired for $12 million, with $2.4 million payable in cash and $9.6 million in iAnthus common shares and Class A convertible restricted shares at a price of $2.57 per share. Citiva USA was acquired for $6 million, with $1.2 million payable in cash and $4.8 million in iAnthus common shares and Class A convertible restricted shares, also at a price of $2.57 per share.

Citiva NY’s properties include cultivation and processing facility and four dispensary locations. The four dispensary locations, which have yet to be opened, will be located in Brooklyn, Staten Island, Dutchess County and Chemung County.

Citiva’s proposed 2000 square foot Brooklyn dispensary, which will serve as the company’s flagship dispensary in New York, is set to open in Q4 2018 and will be one of two medical cannabis dispensaries located in most populous borough, with approximately 2.6 million residents.

The Staten Island dispensary, which will be the only dispensary to serve the areas approximately 500,000 residents, will also open in Q4 2018. The Duchess County and Chemung County dispensaries are slated to open in Q2 2019.

iAnthus also plans to complete the purchase of 8.2 acres of land located in Orange County, NY and hopes to begin construction on a cultivation facility by the end of this fiscal quarter. At a later date, the company hopes to purchase an additional 6.2 acres at the same location.

Phase One, which will create 27,500 square-feet of cultivation space generate approximately 1,470,000 grams of total flower per year, is expected to be completed by February 2019. Phase 2 is expected to begin in Q3 2020 and construction is expected to conclude by Q1 2021. Phase 2 is expected to expand the facilities space to 43,000 square feet and generate approximately 2,940,000 grams of cannabis flower per year.

“We’re excited to be partnering with a Citiva team with deep roots in New York, and which has a sophisticated understanding of how to build healthcare companies in the state…” said iAnthus CEO Hadley Ford in a statement.”With the closing of the New York transaction, iAnthus now has operations in six states, and is currently the only publicly traded company which holds a New York Registered Organization.”

On Feb. 1, 2018, the company held a conference call for financial analysts and investors to discuss the transaction. A reply of the call will be available for up to seven days and can be found here. Interested parties can also access the call by dialing (855) 859-2056 for domestic callers, (404) 537-3406 for international callers. The conference ID is 8788029.



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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


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