Business of Cannabis’ third New York Sessions event took place last month (February 23), bringing together some of the leading voices in the state at a crucial juncture for its cannabis industry.
5 Key Takeaways
- New York is expected to become the second largest cannabis market in the US, behind only California, by 2033. The state could see up to 1200 cannabis stores opened over the next 10 years, generating revenues of $4bn a year.
- The state’s emerging framework will create the most ‘sustainable equitable market in the industry, and by 2033 it will be the most demographically diverse market in the world. Unlike other markets which start off diverse but consolidate within three to six years, New York’s strategy will enable these diverse operators to retain their licences.
- The prevalence of counterfeit and illicit products will be the biggest challenge faced by the state, and in order to effectively fight this a lot of work needs to be done to reach out to communities and neighbourhoods to find the legacy players who have ‘been on the corner for years’. Furthermore regulators will be strict in their enforcement of banning any licence applicants that are found to have participated in the illicit market.
- The more people that are able to get the message that New York will be different to states that have come before, the better the process will be. The state also has the advantage of learning from the mistakes of the 19 states that have come before.
- Ensuring the supply and demand sequencing is done correctly is vital to its success, and as long as supply is handled well, retail licences will be handed out ‘as fast as we can’.
Held at the female-led Work’N’Roll venue in Manhattan, the evening began with an update from Office of Cannabis Management’s Director of Policy John Kagia, who shared his insights into what he expects the city’s burgeoning regulated cannabis market will look like over the next 10 years.
Mr Kagia said he believes New York will become the most sustainable, equitable market in the industry, and that by 2033, it will be the most demographically diverse market in the world.
Furthermore, he argues that unlike other markets which start off diverse but consolidate within three to six years, New York’s strategy will enable these diverse brands to retain their licences.
New York is also predicted to be a leader in biomass presentations and research, and is expected to become the most advanced research market on the planet.
Next, Bruce Barcott, Senior Editor at Leafly, partner of the event, noted that if Washington and Oregon were anything to go by, it could be eight or nine years before New York reaches consumer equilibrium and the market becomes steady.
By the time, according to data garnered from analysing similar legal states, the state could experience eight years of growth, see 1200 cannabis stores established generating $4bn in sales, and become the second largest US cannabis market after California.
However, he said it would take a ‘lot of work’ to get there from the current situation, which is expected to see 175 stores launched, with 97% of consumers currently being served by the legacy market.
Paul Botto,Co-Founder & President of Lucid Green, also a partner of the event, followed Mr Barcott by explaining that New York has a unique opportunity to address many issues currently facing the US cannabis industry using solutions such as its proprietary software Lucid ID.
These include the continued prevalence of counterfeit products and the illicit market, which in California still holds 55% of the market, and a lack of reliable tracking data on products.
These issues were addressed in more detail in the following panel session, in which the previous three speakers were joined by Uber’s Global Lead of Strategic Operations New Verticals, Jessie Young, and Leafly’s East Coast Editor Calvin Stovall.
Mr Kagia began by stating that he believed that in order to effectively fight the illicit market, a lot of work needed to be done to reach out to communities and neighbourhoods to find the legacy players who have ‘been on the corner for years’.
There will soon reportedly be a significant shift in enforcement strategy in efforts to encourage these players to establish a legal operation, though he warned that any licence applicants that are found to have participated in the illicit market will be denied a licence.
He continued that getting the ‘supply and demand sequence’ right was vital to success in the state.
Mr Barcott emphasised that the more people are able to get the message that New York will be different to states that have come before, the better the process will be, adding that it has the advantage of learning from the 19 states that have come before.
Mt Kagia concluded that the next generation will be the first who won’t have a raised eyebrow when taking a cannabis product out of their pocket, and that the recreational cannabis industry was likely to massively disrupt the alcohol market in 20-30 years time.