With New York’s recent legalization of adult recreational cannabis use, residents can now grow their own plants and smoke in public wherever cigarette smoking is allowed. Eventually they will be able to walk into a shop and buy an assortment of cannabis-infused edibles, pre-rolled joints and other psychoactive products.
New York joins 15 other states (counting Washington, D.C.) to legalize the plant’s use and enter the rapidly expanding market. According to New Frontier Data, total legal cannabis sales in states where the substance is currently allowed, will reach nearly $30 billion by 2025.
New Yorkers seem to have a generally positive but guarded attitude towards cannabis. The 2021 MRI-Simmons National Cannabis Study surveyed New Yorkers age eighteen and up before the substance was legalized there, and found about three quarters of New Yorkers believe legal cannabis sales can be a good source of tax revenue and can provide some medical benefits. Three quarters of respondents also believed that improper use could have negative health effects and sixty-three percent were worried about its deleterious effects overall.
On social justice and criminal reform, sixty-three percent favored the expungement of past marijuana related crimes and arrests.
Fifty-seven percent of the adult New Yorkers surveyed said they would try it, if it was legal to do so. What’s next?
When next-door neighbor New Jersey legalized recreational cannabis in February, many in the industry predicted nearby states would quickly follow suit because politicians would prefer to create and cash in on their own tax revenue source than have their residents drive across the state border (illegally, but not enforced) to buy cannabis. Indeed, New York legalized cannabis use shortly thereafter and Delaware, Rhode Island and Connecticut look likely to end prohibition this year.
Investment Pouring In
Vice Ventures founder Catharine Dockery expects cannabis to become part of the SPAC trend with “with at least 1-2 really massive blank-check companies” and potentially many more. The first companies to be funded will likely be associated with strong brand names or high-profile celebrities or investors, and those companies will have plans for national expansion assuming federal progress on de-scheduling or legalization.
In the meantime, Dockery expects a “rather messy interim year while the state government finalizes regulations and licensing.” Medical dispensaries are open now, but estimates on the first recreational dispensary openings range from six months to two years.
Real Big, Real Fast
Nidhi Lucky Handa founder of Leune, a California-based cannabis grower, expects New York to quickly become the second largest adult use market behind California. “With all eyes on New York, it’s an exciting time to be a cannabis consumer, operator, or general enthusiast in the empire state,” said Handa.
She predicts the large pool of New York-area talent will translate to, “disruptive and creative marketing,” and that there will be both demand for big California brands as well as launch a flurry of NY-born brands.
Kristi Palmer Cofounder of Kiva Confections believes those marketing activities are likely to start before actual sales. Regulations and license applications will take time to be finalized, but New York “will become the epicenter of cannabis marketing due to the sheer number of consumers and opportunities there,” she predicts.
Worry While the Details Are Sorted
There will be a multi-month lag between decriminalization and meaningful legal, taxed and regulated cannabis sales noted Brett Heyman founder and creative director of Flower by Edie Parker. The positive effect of immediate decriminalization will be a dramatic decrease in cannabis related arrests, which have disproportionately impacted people of color, he said. “Unfortunately, the negative is that the decriminalization element of the legislation will give the black market time to accelerate,” before legal sales come to market.