Two Months In, Union Square Travel Agency Says 'Illicit Market' is Biggest Hurdle

Shift in tone from OCM has leadership hopeful that enforcement will be stepped up.

The biggest issue facing early movers in New York’s nascent recreational marijuana trade is still illicit competition, said company leadership this week at Union Square Travel Agency, one of just nine legal retailers that are operational to date in the Empire State.

“We’ve certainly had to be very persistent about ensuring that revenue continues to rise. There’s quite a bit of competition from the illicit market,” said Arana Hankin-Biggers, Union Square’s president and co-founder. “That’s the main hurdle.”

Though she said customer retention has been solid at about 45% – meaning nearly half of customers have been returning on a weekly basis – Hankin-Biggers said the shop’s performance so far has not been what she’d hoped for.

“It certainly hasn’t been as easy a home run as much as we thought it would be. Our numbers were significantly lower upon opening compared to Housing Works,” Hankin-Biggers said, referring to the first legal cannabis shop in New York City, which opened for sales on Dec. 29.

“We’ve been open for two months, we’re doing really well now, not as well as we’d like to, but the numbers keep rising, the revenue. It’s slow and steady,” Hankin-Biggers said.

Tone Shift on Enforcement

“The tone has shifted” from elected officials regarding the unlicensed market, Hankin-Biggers said, and she’s seen signals from both state and city leaders that they’ll be taking a more “aggressive” approach toward cracking down on illicit cannabis sellers.

She’s hopeful authorities will crack down on landlords that allow unlicensed retailers to operate at locations they own, through civil fines and tax liens, as opposed to using criminal charges.

Hankin-Biggers said one of the biggest obstacles to getting the shop open in February was finding real estate and a landlord who was willing to lease to a marijuana company, particularly because they didn’t have a corporate guarantee to offer as an incentive.

“We had to put up personal guarantees, and we were lucky enough to have a person on our team who had the means to stand that up, but it was a battle. We literally had to talk to 15-20 landlords to find a location, most of which are incredibly apprehensive about cannabis companies,” she said.


On the supply chain front, Hankin-Biggers said Union Square has already been having to turn away brands that are looking for shelf space. She said her shop is already stocking about 245 SKUs from roughly 50 brands, and that there are another 50 or so brands on the “wait list” to prove their worth to the Union Square product vetting team.

Until recently, Hankin-Biggers said, Union Square had primarily been stocking whatever products have been available, but going forward she said her purchasing staff will be getting much pickier.

“Up until now, it was a matter of making sure they have their lab results and that their pricing is on par with what other folks are charging. So we haven’t had to be extremely selective,” Hankin-Biggers said. “But now is a point where we have to be a lot more discerning going forward. We’ve been very purposeful about carrying very small, boutique artisanal brands.”

Union Square Travel Agency is also still operating out of a temporary “pop-up” location next door to what will eventually be its flagship store, which is expected to be ready within a few more months, perhaps as soon as July.

After that, Hankin-Biggers said, her team will also start considering potential new locations, since each retailer will be allowed up to three stores around New York. The locations have yet to be determined, she said, though it’s likely they’ll have two other shops within New York City, perhaps in boroughs other than Manhattan.

John Schroyer

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