Cannabis Business: New York, 2023

Business of Cannabis: New York 2023 kicked off this morning at the New York Academy of Medicine, bringing together hundreds of key state cannabis regulators, policymakers, financial institutions and leading businesses.

Taking place at a pivotal time for New York’s burgeoning cannabis industry, the day’s sessions focused on diving into the key issues facing the market, exploring the unique social capital-driven framework on which it is being built, and discussing why is expected to become one of the most lucrative and exciting markets in the world.

Introductory remarks

The day began with an address by Tremaine Wright of the New York Cannabis Control Board, who reminded the audience that “capital must be the foundation” of the New York market.

With more than 700 licenses issued, mostly to small family businesses, she added that New York has already created the most diverse cannabis market on the planet.

Despite the “continuing challenges” brought on by litigation that effectively halted the CAURD program, Ms. Wright continued, “I’ve heard from 1,000s of New Yorkers about how much they’ve sacrificed to get to this point. That’s why the Cannabis Control Board and Cannabis Management Service are so committed to arming licensees and applicants with the tools they need to thrive, including providing business development and training programs.

“I cannot stress enough that this is a historic moment in our state and for our country. New York is building the most accessible and inclusive cannabis market in the world. And thanks to our regulations, we will make sure this industry is home to a diverse set of independent operators who represent the best of the Empire State.”

She concluded by addressing the audience, stating that “the future of the legal cannabis industry is here.”

“And we in this room are actively shaping all that is and all that can be. I invite you to join us in building the future of cannabis here in New York.”

East Coast State and New York Capital Markets

Viridian Capitals Scott Grieper then took the stage to discuss the state of capital markets in New York.

He began by highlighting the fact that “the biggest, most dynamic city in the world” is struggling to attract cannabis investment.

“Investors are chasing returns, and returns are based on financial performance. So this could work, but ultimately it depends on the business.

“We had a lot of deals in New York, but the money wasn’t coming to the market. We’ve been doing this for nine years. We’ve only been able to track about $35 million in investment activity coming into the state.”

He continued that 2019 was the high point for investments, M&A and IPOs, but that “deal size has fallen sharply since 2020.”

Mr. Grieper explained that he believes “rescheduling is the most important factor in attracting institutional investment because it removes the stigma.”

This is set to be a “game changer”, bringing in a lot of cash flow and “significantly increasing the value of every part” of the industry.

“This state must become the shining star of the US states. There is something unusual about paroxysmal conditions. New York State needs more capital and needs more M&A activity to grow.”

Investing in New York

Mr Greiper then joined a panel of investors, advisers and industry experts in a session looking to explore investment opportunities in the state.

To open the panel, it was asked what kind of investors are currently involved in the New York industry, to which the panel confirmed that it remains a “non-institutional capital market” dominated by accounting firms, high-net-worth individuals and angel investor groups .

However, the group pointed out that the growth rate of the cannabis market, which is currently showing a 30% CAGR over the past five years, cannot be ignored by investors.

David Hess, president and co-founder of Hess Capital, told the floor: “New York has arguably been the capital of cannabis consumption for decades. The community is here, the consumers are here and the brands are here, and that’s something we’re excited to get behind.”

Addressing the rollout of the market, which the group expects to grow to $5 billion to $7 billion annually, the panel discussed barriers to investment in the state’s supply chain.

Ask me anything with Jeffrey Hoffman

The audience then had the opportunity to participate in an unscripted conversation with cannabis attorney Jeffrey Hoffman for an AMA session.

A number of questions addressed the unique challenges New York faces with its thriving illicit market.

Mr. Hoffman explained that the only reason the illegal market has exploded is because “the city has done absolutely nothing about it” and that the practice has effectively been decriminalized.

“I think the police are really concerned about violent crime, they don’t really want to deal with cannabis and they don’t have the resources to be able to deal with it. Unfortunately, that really let it all blow over.

“New York is the cannabis capital of the world. There’s been a billion dollar cannabis market here for as long as I’ve been alive. This is an illegal, not a regulated market. If something like this was going to happen anywhere, this is where it wasn’t going to happen

“If we really want to solve this, we need legally regulated cannabis dispensaries that make their customers happy.”

He suggested that legal firms should be given tax breaks “until we figure this all out”. Speaking about taxes in a later question, he said the current system had “done real damage to the state and the country” and was leading to abandonment along the value chain.

“At this point in the game, we have so many problems with the illicit market, where we have so many problems with the capital applicants that we want to license, we want to give them the opportunity to thrive.”

“We don’t collect huge amounts of tax revenue. Let’s give them that advantage of not having that extra burden to really drive their business. And then, once they’re established with their businesses, we introduce this tax scheme and they have to collect that money that goes back into the communities.”

Speaking about the upcoming rescheduling, Mr Hoffman said he was not a big fan of making it a Schedule 3 substance because it opened the door for big pharma to come in and dominate and would create additional paperwork for an already heavily regulated sector.


Cannabis Business: New York partnered with the Cannabis Association of New York (CANY) ahead of the event to launch the #BUYLOCALNY campaign aimed at protecting New York’s local cannabis growers.

On that note, the next session featured CANY Cultivation Committee Chair Joan Kudrevich and Cannabis Now CEO and Founder Eugenio Garcia discussing the importance of cannabis grower showcases and local growers.

Having previously been licensed, Ms Kudrewicz explained that with New York expected to be the biggest market in the world, she would be “on the up” by now and that the product she produced last year, will be “long gone”, providing money in the bank to “fuel the continuation of this business”.

With only 26 outlets licensed to sell the products, “cultivators have no money”.

“Without the retail operations available to us growers, there simply aren’t enough opportunities for people to sell, let alone thrive and make a living.”

She went on to explain how cannabis grower showcases are a lifeline for businesses like hers.

“So many of these farmers are not in dispensaries and don’t have enough bandwidth to get their product on the shelves. If these showcases don’t continue, I don’t know if we’ll be able to survive financially.

“This is the only revenue stream we have. These showcases are due to end on December 31st of this year.

“I’m in six dispensaries right now and the only reason is because of the relationships I’ve built through these grower showcases.”

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