This post was originally published on this site.
Join NY Cannabis Insider for its next industry meetup in Lafayette on June 13, 2024. Tickets available now.
Sales data in the still nascent New York State cannabis market show a strong upward trend for global powerhouse Curaleaf, which continues to be the market share leader in neighboring New Jersey.
According to HEADSET, a cannabis analytics firm based in Seattle, Curaleaf’s market share of wholesale sales in New York has been tracking higher every month since multistate operators were allowed to operate vertically at the end of last year.
Curaleaf, which operates across 17 states and is headquartered in New York City, is publicly traded on the Toronto stock exchange.
It also operates in several European countries including the United Kingdom, Germany, Italy, Spain and Portugal.
There are several other MSOs that are operating vertically now in New York — including heavy hitters like PharmaCann, MedMen and Etain (now owned by RIV Capital) — but it’s been Curaleaf that’s shown the strongest growth spurt, according to HEADSET.
“We estimate that the Curaleaf brands (Find, Grassroots, and Select) had a 6.5% market share combined for April in New York,” said HEADSET co-founder and CTO Scott Vickers. Each of the company’s brands are “showing strong month-over-month growth that is outpacing the market as a whole,” Vickers said.
Not surprisingly, the MSOs’ growth spurt has coincided with a dramatic drop-off in reorders for cannabis products sold by licensed New York State farmers, says Joseph Calderone, president of the Cannabis Farmers Alliance.
Which is “not really what we expected” to happen, said lobbyist Matt Leonardo, whose Albany law firm Hinman Straub represents the CFA. Their increasing market share “really comes at the expense of (local) farmers,” Leonardo said.
Brendan Mitchel-Chesbro, marketing content manager for BDSA, a national cannabis data analytics firm based in Louisville, Colo., called the quick inroads made by Curaleaf and the other MSOs “pretty big news for New York.”
BDSA is still in the process of compiling hard wholesale sales figures for New York, he said, but the company does have projected figures for the entire year.
“We’re projecting more than a billion dollars in legal sales for New York this year,” he said, comprising $910 million in adult recreational sales and $130 million for medical marijuana.
Mitchel-Chesbro noted that in the time since recreational cannabis became legal in New Jersey — April 2022 — the MSOs have come to dominate the wholesale market.
And Curaleaf is on top of the heap.
As of the first quarter of this year, the company was “still number one in New Jersey,” he said.
Curaleaf CEO Matt Darin noted in a December report that making a splash in the New York wholesale market was a main focus.
Under New York MRTA law, MSOs are limited to converting only three of their medical marijuana facilities into retail dispensaries.
As a result, Darin said, in a state of 20 million people, “the opportunity to sell into hundreds of other retail dispensaries on the wholesale side is going to be a very big opportunity.”
In particular, the CEO pointed to a large indoor growing facility located just outside of Albany, in Ravena, NY, where the company planned to ship out wholesale orders.
In an email Tuesday, Jordon Rahmil, Curaleaf VP of corporate communications, told NY Cannabis Insider that the upstate cultivation plant had a total canopy size 64,000 square feet.
The total size of the plant is 181,000 square feet with the rest of the space taken up with post-production functions such as drying, curing, extracting oil, and producing edibles and gummies. “We’re home to 35 active strains” of cannabis, Rahmil said.
Calderone from the CFA sees the Curaleaf game plan as bad news for the state’s 290 licensed growers, who are already struggling under mountains of debt incurred during the messy 2022-23 dispensary rollout.
He cited built-in advantages that the MSOs have in terms of having huge amounts of product, grown, dried, packaged, lab-tested and ready to go.
“By scaling their operations across multiple states, ROs have many more resources than New York farmers, from human processes to capital, that allows them to price aggressively and protects them from the ebbs and flows of the market,” Calderone said.
“Access to capital is an especially critical advantage for ROs,” he said, while also noting that farmers have been limited until just recently to growing all of their weed outdoors, which oftentimes may not match the strength and quality of indoor-grown weed.
Curaleaf execs in a conference call Wednesday denied that their intention was to dominate the wholesale market and push local farmers to the sidelines.
Bobby Sciarrone, senior VP of Curaleaf’s east region, said the company’s aim was to partner with local growers, and that the company understands it’s been “very brutal” for the New York State farmers who “raised all this weed with nowhere to sell it.”
As an example of the company’s good intentions, he cited the purchase agreement that Curaleaf entered into with Open Minded Organics, a Long Island-based grower and processor.
“We purchased a significant amount of oil from them, helping them to reduce their inventory and raise capital,” Sciarrone said.
Curaleaf will be seeking other such partnerships as the year progresses, he said, noting that local farmers play a vital role in the cannabis business.
Sciarrone also mentioned that state law requires 50% of dispensary shelf space to be set aside for independent product brands.
Curaleaf has exceeded that amount in its Newburgh adult-use dispensary, he said, because “our customers love that New York homegrown.”
Tessa Williams, owner of Empire Farm 1830, was not thrilled to hear about the huge growing facility just up the road from her Columbia County operation.
“It’s extremely unfair that licensed farms cannot grow indoor if it’s not approved in New York for our licenses, and we’re limited to a max of 12,500 square foot canopy allowance,” she said, while “the MSOs are allowed to waltz in and crush us.”