New York on Pace to Sell $520M of Cannabis in 2024; Could Crack $700M

New York’s adult-use cannabis market is starting to show signs of life in 2024.

The state’s licensed dispensaries reported $260.6 million in sales from January through June, or roughly $43.4 million per month, according to the New York Office of Cannabis Management (OCM). This puts New York on pace to top $520 million in adult-use sales this year, but based on a recent upward trajectory, the state will likely eclipse $700 million.

According to OCM, 113 stores were open and operational during June’s reporting period, but more dispensaries are coming online weekly. And more stores mean more sales in this nascent market.

In mid-July, New York has 137 dispensaries and eight delivery-only operators serving adult-use customers. Nearly half of these licensed retailers are located downstate in Manhattan, Brooklyn, Bronx, Queens and Staten Island, according to OCM.

“We’ve been seeing a lot of velocity in this market from the beginning of the year,” OCM Policy Director John Kagia said during the state’s July 10 Cannabis Control Board (CCB) meeting. “Even as we work through all of these initiatives that are intended to grow this market, we are seeing very green shoots in the doors we have open and the folks that are getting open.”

More than 110 of New York’s 145 licensed retailers that are currently operational kickstarted their operations this year, and many more are on deck.

So far in 2024, OCM officials have issued 729 licenses across the supply chain, including 138 to cultivators, 268 to retailers and 136 to microbusiness (56 with retail operations). The CCB approved 109 of these 729 licenses at its July 10 meeting.

The 2024 velocity comes after a wretched program rollout in 2023 when New York had just one licensed dispensary serving adult-use customers in January and 32 operational stores by the end of the year. Overall, the state reported $150.9 million in cannabis sales in 2023, or roughly $7.75 per capita, which is by far the lowest rate among adult-use states in the nation, according to Cannabis Business Times research.

At the high end, Michigan’s adult-use cannabis market sold roughly $300 per capita in 2023, while Connecticut, at the lower end, sold approximately $40 per capita.

New York’s $150.9 million in 2023 sales represents a fraction of OCM’s projection that the state’s adult-use cannabis industry will eventually generate $4.2 billion in annual revenue.

New York’s slow sales launch was primarily attributed to two factors: The state’s social equity-focused rollout went underfunded and was challenged in court, allowing unlicensed retailers to thrive.

Amid these challenges, the OCM reversed course on a plan to prevent larger companies—specifically the state’s existing medical cannabis licensees—from entering the adult-use marketplace for three years to allow social equity retailers to establish equal footing in the market. New York refers to these equity retailers as Conditional Adult-Use Retail Dispensaries (CAURD).

Instead, the OCM decided to open the market to everyone by the end of 2023—two years earlier than planned.

Among 150 original CAURD licensees, roughly 20 had operational retail facilities when the OCM opened a license application window for non-social equity operators to enter the adult-use market in October 2023. Many of the state’s existing medical cannabis companies began adult-use wholesale distributions in December and adult-use retail sales in January.

As more and more retail operators entered the adult-use market during the first six months of 2024, sales numbers continued to climb. According to the OCM, New York’s June reporting period featured a weekly record of $15.1 million in sales, which equates to roughly $65 million over 30 days or approximately $575,000 per store for one month.

Kagia called the state’s recent sales momentum “absolute gangbuster.”

“Essentially, in Q2, we made the same amount of money we made in all of 2023,” he said. “And if that’s not an indication of momentum, I don’t know what is.”

Kagia said that in addition to new dispensaries opening, the state’s enforcement efforts against unlicensed cannabis operations have driven increased sales for licensed dispensaries, Kagia said.

Specifically, licensees in Manhattan, Brooklyn, Bronx, Queens and Staten Island collectively experienced more than $1.8 million in revenue growth, a roughly 50% increase, in the six weeks immediately following increased authoritative action by New York’s Enforcement Task Force, according to the OCM.

This growth is a result of adult-use customers discovering licensed dispensaries as state officials force the unlicensed shops to close their doors, Kagia said.

RELATED: Enforcement Powers, Padlocks Part of New York Plan to Dismantle Unregulated Cannabis Sales

As of July 9, the OCM reported that state enforcement officials conducted more than 323 inspections, seized 4,800 pounds of unregulated cannabis products valued at nearly $30 million and padlocked 164 unlicensed stores. Moreover, officials issued 252 violations and conducted 76 hearings.

While it will take New York’s adult-use cannabis market longer than expected to reach its multibillion-dollar potential, Gov. Kathy Hochul indicated that the state is moving in the right direction.

“New York is building a robust and equitable legal market that is driving significant economic growth for our communities,” she said in a July 10 press release following the CCB meeting. “The issuance of 109 additional adult-use licenses is just one step in developing New York’s nation-leading cannabis industry.”