High demand, low supply: NY cannabis retailers and processors struggle to find quality flower

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Just over a year ago, New York State was still awash in cannabis flower left over from the 2021 and 2022 harvests.

But in a stunning reversal, processors and retailers are telling NY Cannabis Insider that now they’re having difficulty finding sufficient high-quality, locally grown marijuana.

“The shortage problem is real, and it’s going to persist,” said Kate Miller, owner of Peregrine Toke in Sharon Springs.

Many of the state’s licensed cannabis growers have just packed it in or scaled back production in light of the botched dispensary rollouts in 2022 and 2023.

“I know at least 10 who have gotten out or seriously cut back,” Miller said, citing that as one reason for the shortfall.

It only made matters worse when the farmer assistance bills passed by the Assembly and the Senate failed to get Gov. Kathy Hochul’s signature, Miller said.

While there were some new cultivation licenses issued earlier this year, she noted, it was too late in the 2024 growing cycle to produce cannabis.

A board member of the state Cannabis Farmers Alliance, Miller pointed out what’s been previously noted by the state’s beleaguered growers — that “ROs were allowed to come in early” by the Office of Cannabis Management, which further “undercut the local farmers.”

The “supply shock is not surprising,” said Matt Leonardo, an attorney and lobbyist with Hinman Straub in Albany.

Consumer demand for flower products “accounts for about 60 percent of the overall market,” Leonardo said. And “as retail stores have finally begun to open, there has been a surge in overall demand” for high-quality bud.

Because of past missteps by the state, farmers who had grown too much product “were wary about sinking more resources into an uncertain market,” Miller explained.

Plus, growing outdoors – where farmers holding conditional licenses are limited to growing – is an expensive proposition.

It costs “thousands and thousands” to put seeds in the ground, she said.

Farmers have also seen a preference by some dispensary owners for indoor weed, she said — most of which is grown by deep-pocketed MSOs — because the controlled climate conditions can produce weed with higher THC levels.

Korey Rowe, owner of the DOSHA Farms dispensary in Oneonta, acknowledged that “processors are probably having a little bit of a hard time getting weed. A year ago there was a surplus, and we really don’t have that issue anymore.

“With all the new dispensaries that have opened up,” the high-quality cannabis sells “pretty quickly,” Rowe said.

While there is a shortfall in high-quality cannabis flower, Jonathan Lasser, CEO of Hepworth Pura Farms (one of the largest processors of flower and biomass in the state), said it’s better than going back to a huge surplus, which would be “devastating” to the market and the farmers.

Lasser foresees the supply-demand equation balancing out over the long term as more farmers are allowed to grow indoors, increase the size of their groves and possibly get more support from the state.

An OCM spokesperson said in an email that the agency “closely monitors product supply in our legal market,” and remains confident that “licensing hundreds of cultivators and microbusinesses to grow cannabis outdoors, in greenhouses, and indoors will ensure abundant supply and mitigate the seasonality of predominantly outdoor cultivation to date.”

Steve Halton, the owner/operator of Real Life Botanicals, based just outside of Syracuse, doesn’t see brighter skies in the near term, partly because of the pressure on local growers to compete with the ROs entering the market (since December).

“It’s kind of a pain” to compete with the lower prices of indoor weed, he said. “It makes us have to drop prices.”

Asked whether he opted to scale back his own production like many of the state’s 280 or so licensed cannabis growers, Halton quipped, “I guess I must be the definition of insanity, because I keep growing more plants.”