By Julia Meyer
New York’s retail cannabis market is eagerly awaiting to open over a year after the state passed the Marijuana Regulation and Taxation Act (MRTA) legalizing the use of cannabis for adults aged 21 years or older. This progressive legislation in conjunction with having the largest metropolitan area in the country, New York City, has the potential to become a major hub for the United States cannabis industry.
Neighboring New Jersey’s newer cannabis market has brought in major revenue for the state, providing hope for New York City’s market to create economic growth. As noted by co-founder Kris Krane of the nation’s leading cannabis multi-state operators, 4Front Ventures, “Just across the river, New Jersey has seen over $80 million in sales in the program’s first few months. There is no reason to think New York won’t see similar or even higher sales rates once legal sales open up. Of course, this comes with new jobs, investment, and taxes for the city.”
NYC’s Opportunity for Economic Growth
New York’s large population makes the city ideal for a potential booming cannabis market. According to Liesel Bernard, CEO of CannabizTeam, a cannabis-focused executive search and staffing firm, the number of people estimated to consume cannabis both medically and recreationally in NYC alone is what makes it potentially one of the biggest markets in the US.
“By 2025, it’s predicted that there’s gonna be about 740 million US dollars in revenues coming just from the cannabis industry because of the population in New York. I think just the openness of people and excitement about cannabis in that area we’re projecting just a huge revenue stream from the industry, both from a tax perspective as well for the state, which is really exciting,” Bernard said.
Bernard explained CannabizTeam confirmed New York’s growth potential for cannabis jobs in its annual Tri-State (NY, NJ, CT) Cannabis Salary Guide, which provides cannabis employers and job seekers insights into the top cities and positions for cannabis jobs, salary ranges, and why cannabis companies are relying on temp employees versus full-time.
“We really see it as sort of the next big growth region for cannabis. I think just by looking at other markets and the number of licenses that are being issued in the tri-state area; New York, New Jersey, and Connecticut we’re predicting close to 100,000 jobs that are going to be created between those three states. Over the next three to four years, New York specifically, we’re looking at 65,000 jobs, around that amount that we can create.”
Further, Bernard emphasized that New York has taken the example of other states’ cannabis social equity measures further providing potential for the industry’s success.
Bringing Cannabis to a Cultural Epicenter
Due to New York’s large population, the city is a cultural melting pot that can offer a thriving diverse cannabis market. New York’s diversity has allowed other industries to thrive in the city providing hope for the cannabis industry’s survival according to the Director of Marketing and Partnerships, Jen Seo of Nabis, California’s top licensed cannabis wholesaling platform.
“With a strong international demographic and large population, NYC coming online will help further solidify the legitimacy of the cannabis industry. Major businesses from different industries such as tech, fashion, etc have established themselves in NYC, which then has attracted a metropolitan crowd. There will be more opportunities for new and legacy businesses to come out of the woodwork and thrive in a market that has been untapped for a while,” Nabis stated.
Another benefit of New York’s cultural diversity is the opportunity for a more creative and trendy market in the city. This factor makes New York an exciting market to open according to Jacobi Holland, Co-Founder at On The Revel, a parent company for a collection of curated educational and networking experiences for those interested in the regulated cannabis industry.
“I think New York is easily the most exciting market to go online and it’s for a number of reasons…If something is cool in New York, it becomes cool and all of these other states and in different countries, that’s the first part. When you think about brands, or experiences or activations, like people are so damn creative in New York, that you’re not getting the same, regurgitated, kind of like stagnant strategies and thinking when they create something,” he stated.
Holland further added that New York’s many diverse communities have the potential to cultivate novel ideas that will make the city’s market unique.
“There’s all of these super microcosms of communities. We have a relatively broad community but even within it you have, people that started from like skate culture and people that started from like the downtown dance scene, and other people that [have] been in the hash-making community on the low in New York for decades. All of the little microcosms and the way they intersect I think it creates new ideas that don’t exist in other markets,” he said.
Challenges to the NYC Cannabis Market
Since retail sales have yet to roll out in New York, the state is still in the process of licensing cannabis businesses. The state has released a limited number of temporary conditional licenses so far to cultivators and processors, making raising capital for the new industry a current challenge.
Krane stated “At this stage, there are very few jobs in the legally licensed New York City cannabis industry because [retail] businesses have not opened yet. The largest problem at this stage is the need for more access to capital and compliant real estate. Raising capital in the cannabis industry is always challenging, even more so for new operators without a demonstrated history of operating experience.”
The long-held prohibition of cannabis has led to an already existing illegal market in New York causing the need to transition these businesses into the legal market. As noted by Seo, “It is important to recognize the preexisting market that is currently thriving in New York, and hope to see a favorable transition for those businesses. A balance needs to be held between facilitating legacy, new operators, and brands in the space.”
Another challenge according to Holland that might dissatisfy consumers is higher taxes on certain THC products. “I would also say one of the bigger risks that I don’t think we’ve focused on yet is that there’s a THC percentage tax, that’s going to be really tough for the concentrates or higher potency products.”
Contributing to a Growing Market
As a result of the Federal Cannabis Prohibition, transporting cannabis products across state lines is illegal, making New York a self-reliant industry. As Bernard explained, New York will therefore anticipate jobs in all levels of plant cultivation to supply the industry.
“Companies are going to have to hire in cultivation, and again, there’s so many different jobs just in cultivation that companies hire for. Then as the chain progresses, you have to process the plant, going to extract some oil or whatever the products are made, and then that manufacturing, distribution, and retail will follow after that. So, New York and the whole tri-state area will be hiring in all those verticals in order to be able to provide products on the shelf and in dispensaries. So I think initially it’ll be more cultivation and extraction, but that will quickly migrate into the other phases of the life cycle in order to have the products ready for when retail opens,” Bernard said.
Krane elaborated that most of the jobs in New York City’s industry are expected to be primarily full-time living wage-paying jobs. This will include everything from cultivators, trimmers, budtenders, inventory managers, and ancillary businesses that serve the plant-touching businesses.
Seo also explained the businesses that will be involved in the city’s cannabis market will be dependent on who the state grants the licenses to, and who they prioritize to be social equity license holders.
Bernard added that in order to further affirm New York’s cannabis industry success, companies can utilize people seasoned in the industry from other states.
“I think a lot of companies are setting up cultivation facilities, obviously manufacturing and retail as well, and helping those companies find the right talent so they can succeed. I think we’re (CannabizTeam) doing a lot of hiring people from other states that have experience like Colorado and obviously, California, has been a big market in cannabis over the last six years. There’s a lot of people with experience in those states, I think New York, New Jersey, and Connecticut will pull on in order to make sure that they don’t make some of the same mistakes that some of these other states have made,” Bernard explained.