New York

insights

November 10, 2021
Notable Players

A Deeper Look At This State

Regulatory Framework

After years of stalled attempts, Governor Cuomo of New York signed the bill to legalize adult-use marijuana in April 1, 2021. Existing operators will be able to pay a one-time fee to co-locate 3 adult-use dispensaries at their prior locations and stay vertically integrated. New operators will be prohibited from vertical integration, and licensees will not be allowed more then 3 dispensaries. Although a framework for other licensees does not exist yet, delivery and on-site consumption lounges will be just some of the licenses up for grabs. Moreover, 50% of new adult-use licenses are planned to be awarded to social equity applicants.

New York's Cannabis Control Board met in late October 2021, announcing their 18-month timeline to launch the state's adult- use cannabis market, with the first adult-use licenses being issued in Spring of 2023. What we know for sure is that the newly licensed operators will be prohibited from vertical integration - giving a true leg-up to the existing operators in the state.

Notable Market Activity

August 2019 | GTI acquires Fiorello Pharmaceuticals

October 2019 | Cresco acquires Glouscher Street Capital, LLC

November 2017 | MedMen acquires Bloomfield Industries

What's the Play?

With nearly 20MM residents and one of the highest GDP per capita in the US,  New York is poised to ultimately generate over $4b in annual cannabis sales. With nine of the 10 licenses being owned by the largest MSOs, New York is the land of bigs. Operators who took the cash burn to build infrastructure will be rewarded with a foothold in the market. Much like Illinois, whoever can build out cultivation will have a multi-year window of insatiable demand at industry-high prices. The market is primed, but out of state investors will likely need to wait eighteen months for the new licensing structure to be put in place.

With the recent legalization, New York is poised to be one of the biggest cannabis markets in the United States. Unfortunately, the current lack of licensing makes it difficult to discern who will be able to take home the biggest bite of the apple. What we do know is that the 10 current licensees have a leg up on the industry with the opportunity to be the only vertically integrated operators in the state.  

Current operators should begin ramping up production as adult-use sales will begin in Spring of 2023.

New licensees looking to get in on the racket will be forced to play catch-up with some of the biggest names in cannabis. No need to fret however, as the current operators will not be able to handle the new market alone. Opportunity abounds in the Empire state.  


Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~19.4MM

Annual Tourists

~
265
MM

Medicinal Legalization

2014

Adult-Use Legalization

2021

First Adult-Use Sales

Pending

MMJ Patients

~151K

Monthly Revenue

~$23MM

Cultivation Cap

No Limit

Cultivation Licenses

10/10 (Issued/Limit)*

Retail Licenses

10/10 (Issued/Limit)*

Retail License Cap per Operator

1

Vertical Integration

Required

Delivery

Allowed

MMJ Qualifications

Restrictive

State Population / # Retail Licenses

Accepts Out of State MMJ

No

MMJ Patients / # Retail Licenses

~13K

*Each vertically integrated license can open four dispensaries for a total of 40 dispensaries across the state.

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data

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Shit We Don't Know

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