Summary List Placement
New York’s new legal marijuana market could be worth billions, creating a massive opportunity for some of the biggest cannabis companies in the US.
The state legalized cannabis for adults over the age of 21 on Wednesday. Regulations for retail sales are still being formulated, meaning you may not be able to buy a pre-roll or a gummy in stores before next year.
Once the market ramps up, annual sales could reach $5 billion to $7 billion, according to estimates from analysts at Stifel and Cantor Fitzgerald, respectively. Now, a gold rush is shaping up as major firms eye what could be the one of the biggest US cannabis markets, fueled by the state’s large and relatively wealthy population and plenty of tourism.
Most of the biggest cannabis companies by market value — Curaleaf, Green Thumb Industries, and Cresco Labs — are already in New York, and planning to ramp up to serve the recreational market.
Other large players that don’t yet have a footprint in New York told Insider they’re waiting for regulations to roll out, but emphasized their excitement over the potential to serve the state. Some said they’re already drawing up early plans to enter New York.
“We think it’s a huge market. We’re very interested in it. We’d love to be there and bring our product there,” said Sam Ghods, the CEO of Connected, a cannabis firm that operates in California and Arizona. “We really hope and anticipate that New York takes a fair and competitive process to enable people to grow and sell weed.”
New York’s current cannabis companies have big advantages over newcomers
Incumbent cannabis operators in New York have two distinct advantages over newcomers: they already have the infrastructure set up to somewhat supply the new marketplace and they’ll be allowed to both grow and sell cannabis in the recreational market if they choose to.
Newcomers will have to decide whether to be cultivators (allowed to process and distribute their own products) or retailers (barred from cultivation).
Big cannabis companies in the US typically both grow and sell marijuana, so New York’s rules represent a departure. Cannabis is legal for recreational use in 16 states, and for medical use in 36, though the drug remains federally illegal.
Analysts at Viridian Capital Advisors and Bloomberg Intelligence say that cultivation is a good option for operators with deep pockets and abundant operating experience who are looking to enter …read more
Source:: Business Insider