Cannabis Market Potential in New York

Will the New York Cannabis Market Live Up to the Hype?

New York has finally begun issuing its first full adult-use licenses to cannabis businesses. No more conditional licenses for cultivators, processors, or dispensaries, full licenses. Well…except for provisional ones (i.e., those without a property lined up).

To say this has been an arduous process in New York would be an understatement. With legalization officially occurring in 2021, we didn’t anticipate it taking four years for these licenses to start being awarded. And now there is real concern about whether the OCM is doing enough to not only issue licenses but combat the rampant illicit market in the state, and specifically within New York City. 

All this raises the question, is New York still worth it? Short answer: Yes. But with this turbulent roll-out, let’s go a little deeper into why New York is still worth it and why we feel there’s still opportunities to be had in the Empire State.


New Cannabis Licenses on the Horizon

So far, the Office of Cannabis Management has issued full operating licenses to cultivators, processors, retail dispensaries, and distributors. But there’s more licenses to come and additional licensing rounds throughout 2024.

Type 3 Cannabis Processor Licenses

The latest one is set to be a rolling license application for the type three processor. This is being called the branding processor license as it only allows a license holder to package, label, and/or engage in branding, including those interested in white labeling agreements only. So, no extraction or infusing with this license. But this being a rolling application and with overall minimal requirements means that we anticipate plenty of licenses to be awarded. This license type can be a great way to get a brand in the Empire State without having to deal with the often high costs of running a processing facility.

Consumption Facility Licenses

We are also so excited for additional, never before offered licenses to be made available later this year such as the consumption facility license. As consumption lounges have increased in popularity in states such as Colorado and Nevada, we’re eager to see New York’s rollout with this and the flexibility that this license offers (including for restaurants) makes it very appealing to entrepreneurs. Likewise, the new delivery license will all be incredibly beneficial for dispensaries. Especially those in New York City, who want to focus on offering cannabis and cannabis products to customers quickly and at their private residences.


Growth Potential in the New York Cannabis Market

A lot has been written about the slow dispensary rollout in New York. As of this writing, there are just over 75 adult-use dispensaries operating throughout the state. This is far short of the late 2022 goal set by Governor Kathy Hochul which would have seen over 250 dispensaries opened by this point in time. As frustrating as this may be, especially for applicants, this does mean there’s only one direction to go. 

Cannabis Control Board and Cannabis Advisory Board meetings have consistently shown the growth potential in New York month after month. Over $183 million in legal revenue has been made so far with sales rising from just $2.2 million in all of January 2023 to nearly $30 million by December.  We have no doubt that there is ample room for growth in New York, which is one of the driving forces behind still identifying New York as a state worth pursuing business in.


Population and Tourism 

And of course, when it comes to growth potential in the New York market, we can’t overlook the state’s population and tourism industry. With nearly 20 million residents, New York is the fourth most populous state in the country. On top of this, New York is a booming tourism destination with 2022 setting a record for tourists visiting the state, welcoming 291.5 million visitors. Crucially, these tourists generated nearly $80 billion in revenue for the state. 

If even a fraction of these tourists were to visit licensed dispensaries, that would create an enormous avenue for new businesses. It’s also worth considering, people will likely be visiting New York for cannabis. Given its location in relation to continents such as Europe—which has still somehow lagged behind the United States on cannabis—people across the world may come to New York for cannabis and make it a veritable cannabis hub, with New York City supplanting Amsterdam as the international cannabis spot.


Canna Advisors Can Help You Navigate Troubled Waters

We won’t sugar coat this. New York has been off to a rough start. Rough may even be too delicate a word choice here given the rollout has been plagued with delays, lawsuits, allegations of corruption, and weak enforcement mechanisms against the illicit market. Still, we believe the future is bright with New York. These above reasons and more are why we’re still feeling bullish with New York, and are prepared to guide you pre and post-licensure to make your cannabis business profitable in the Empire State.

Contact our experts or Book an Hourly Consultation to ensure you’re not left behind in this New York green rush.

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