While most of the attention around the Empire State’s transition to allow adult-use cannabis is focused on opportunity for new growth and restorative justice in a market worth nearly $4 billion, New York’s legislation also contains a nod to the businesses currently active in the state’s highly restrictive medical market.
Known for its incredibly high barriers to entry and tightly regulated list of qualifying conditions — which has been loosened since the state’s adult-use bill was signed — the New York medical market was limited to 10 vertically integrated licensees, each allowed to open four storefronts.
Recognizing the investment in both the licensing and infrastructure those businesses had already made, the adult-use legislation gives the current licensees the distinction of being the only non-microbusinesses within the state’s industry to vertically integrate and increased the number of storefronts each licensee will be allowed to eight, with three allowed for recreational sales.
Marijuana Venture reached out to each of the 10 licensees, nine of which are massive multi-state operators that include some of the biggest, most recognizable names in the North American cannabis industry. Five of those companies consented to interviews to discuss their current operations and plans for the state’s recreational market.
The Other 5
Founded by a registered pharmacist, Citiva Medical was acquired by iAnthus Capital in 2018 and operates three New York dispensaries — under the brand name Be. — including one in Staten Island, one in the Hudson Valley and its original location, across from the Barclay’s Center in Brooklyn, with a license in place for a fourth location upstate, in Chemung County.
According to a story published in January by the Times Herald-Record, Citiva Medical is requesting tax breaks to complete a production facility in Warwick. Construction began in 2018 on the 128,000-square-foot facility that would employ roughly 100 people. Because Citiva doesn’t have its own operating production facility yet, it purchases products wholesale from other licensees.
Columbia Care is a multi-state operator with more than 80 dispensaries in 15 U.S. states, including four New York retail locations.
In March 2022, Cresco Labs announced an agreement to acquire Columbia Care in one of the largest deals in cannabis history. The estimated $2 billion acquisition is expected to close in Q4 of 2022 and will create one of the largest cannabis companies in the world.
Ngiste Abebe, Columbia Care’s vice president of public policy, told MJ Brand Insights in December 2021 that the company planned to open three recreational shops once regulations are completed. The company in 2021 also acquired for $42.5 million a 34-acre greenhouse site in eastern Long Island with an eye on future expansion.
Green Thumb Industries bought into the New York market with the acquisition of Fiorello Pharmaceuticals in 2019.
In September 2021, Forbes reported that GTI had broken ground on a 40-acre, $150 million cultivation and manufacturing site in Warwick, a town about 60 miles north of New York City.
GTI has dispensaries in Halfmoon, Manhattan and Rochester, all operating under the company’s Rise retail brand, which also has locations in 12 other states. The company is also licensed to open a fourth medical dispensary in Nassau County.
Easily one of the most recognizable brands in the legal cannabis space, MedMen has four dispensaries in New York. The company’s Buffalo, Long Island and Syracuse shops give the company a footprint that spans the state from east to west, but it’s the flagship location on Fifth Avenue in Manhattan that sets the retailer apart from its competitors.
However, MedMen is in the midst of an ongoing lawsuit filed by Ascend Wellness over a proposed sale of MedMen assets in New York to Ascend. MedMen backed out of the acquisition agreement, prompting Ascend to file suit in what it describes as a case of “seller’s remorse.” The deal with Ascend was valued at $73 million. MedMen originally acquired the New York License from Bloomfield Industries in 2017 for $25 million.
Vireo Health is the New York dispensary brand for parent company Goodness Growth Holdings, a multi-state operator with more than 500 employees and businesses in eight states. In New York, the company has dispensaries in Albany, Johnson City, White Plains and Queens.
Vireo Health was one of the original 10 New York licensees in 2015. As the company grew into a multi-state operator, it changed its name to Vireo Health International and then to Goodness Growth Holdings when the business expanded into other plant medicines in June 2021. At the time of this writing, Goodness Growth Holdings has entered into a definitive arrangement agreement to be acquired by the multi-state operator Verano for $413 million in stock.
In addition to operations in Illinois, Massachusetts, Ohio, Pennsylvania and other states, Acreage Holdings has a growing footprint in New York, which includes four Botanist-branded dispensaries.
While the medical marijuana program in New York is infamous for its high price of entry, rigid regulations and low patient participation, the state’s 10 licensed medical marijuana businesses are poised for considerable growth with revamped medical regulations and the looming recreational market.
“It took off at almost lighting speed when Governor (Kathy) Hochul took over,” says Bill Lettier, general manager of Acreage Holdings’ New York operations. “There were some immediate changes. The ability to sell flower was great … and there was some more communication.”
Aside from the transition to an adult-use market, Lettier says the regulatory updates to the medical program incentivized Acreage to expand its operations by 65,000 square feet — 30,000 square feet of which is dedicated to cultivation.
“You feel a little bit more confident that the recreational regulations will be coming,” Lettier says, adding that the company is currently working on a branding initiative for the upcoming launch of recreational sales, though Acreage remains dedicated to the medical side of the business.
“When we look at the recreational side, we’re now looking at our dispensaries and saying, ‘Okay, how do we execute a concept within a concept?’” Lettier says. “We’re looking at ways to make the recreational user able to come in and shop at a user-friendly market, if you will, and then making sure that we take good care of the medical patients that come in, and that they’re still receiving first-class care.”
Acreage entered the New York market in August 2018 with a $48 million acquisition of NYCanna, one of the original medical marijuana licensees in the Empire State — a deal that is now the subject of a $600 million lawsuit filed by the original owners of NYCanna.
Founded in Illinois in 2014, Cresco Labs moved into the New York market in 2019 with the purchase of Valley Agriceuticals. Today, the company has a cultivation and processing facility in Wallkill and four medical dispensaries open in Bardonia, Brooklyn, Huntington and New Hartford, all operating under the company’s Sunnyside brand. In March, the company announced an agreement to acquire Columbia Care, which also has four dispensaries in New York.
Cresco is currently building out a new production facility in what was a historic knife factory in Ellenville. The new space will help meet the increased demand from the state’s expanded medical program as well as the new demand expected in the adult-use market.
According to John Sullivan, executive vice president of public affairs, the company expects to open its full allotment of dispensaries, adding one more medical and three recreational storefronts, once regulations are completed. Currently, the company employs fewer than 100 people in the state, but expects that number to increase dramatically with 350 jobs projected at the new cultivation facility alone.
“The great thing about this is the amount of jobs that are created in New York,” Sullivan says, noting that Cresco operates union facilities and offers “head of household type jobs.”
The multi-state operator is publicly traded on the Canadian Stock Exchange and has operations in 10 U.S. states, employing more than 1,500 in its home state of Illinois alone. Sullivan says Cresco is the No. 1 cannabis wholesaler in the U.S., with cannabis products sold under several different brand names, including the High Supply and Cresco brands.
Sullivan says the company hopes to locate operations where it can “make the most impact” and is currently exploring real estate options throughout the Empire State.
With 6,000 employees across 23 U.S. states and Europe, it only makes It only makes sense that one of the largest cannabis companies in the world would not only be part of New York’s medical market, but ready to expand into adult-use.
“We’re extremely excited about the future of the New York market,” says Curaleaf president Matt Darin. “No question it’s going to be one of the largest and most exciting cannabis markets in the country.”
Curaleaf, which has been part of New York’s medical marijuana industry since its inception, currently owns and operates a cultivation and processing facility in Ravena and dispensaries in Carle Place, Newburgh, Plattsburgh and Queens.
Darin says Curaleaf plans to build out its full allotment of dispensaries and though it is currently awaiting state regulations, the company is investing in more production capacity at its Ravena facility and working to identify potential locations for new dispensaries.
Curaleaf, which began in the East Coast medical markets and expanded throughout the country primarily through acquisitions, will draw on its prior experiences to establish its brand among the top in New York, Darin says.
“We lived the migration from medical to adult-use markets in many of the states where that’s occurred,” he says.
Curaleaf also has operations in several neighboring states, including Connecticut and New Jersey, which are transitioning to adult-use, and Pennsylvania, which has a strong medical market. Darin says he expects New York’s market will be a “great addition to the Northeast” and Curaleaf is excited for new players to help create the “market the state of New York deserves.”
“We’re extremely well positioned having been in the medical market since the beginning and we’re really looking to have it be a very robust market,” he says.
Within New York’s highly exclusive medical marijuana industry, Etain is an outlier for being the “small company” standing alongside nine industry giants.
The women-owned company is one of the Empire State’s original licensees — the only single-state operator among the 10 registered organizations. The company has four dispensaries, with a flagship store in Midtown Manhattan and three others in Kingston, Syracuse and Yonkers. Its cultivation facility in Chestertown grows four proprietary strains — Dolce, Mezzo, Balance and Forte — and will be built out further to handle the influx of new customers.
“While much of our planning for New York’s adult-use market is contingent upon pending regulations and awarding of licenses, we are expanding our upstate cultivation facility from 12,000 square feet to 50,000 square feet to accommodate an anticipated increase in demand for cannabis products,” says chief operating officer Hillary Peckham.
While New York’s legalization bill generally prohibits vertical integration, the 10 licensed medical marijuana companies — as well as new microbusiness license holders — have been granted a carve-out allowing them to own cultivation and retail licenses.
Once the adult-use market opens, Peckham says the company will continue to prioritize customer service, while offering “effective, diverse and accessible products” in a welcoming environment.
Plus, with about seven years of experience in the state’s limited medical market, Etain has a leg up on some of the competition.
“Our experience working with local communities and patients across the state has provided us with insight on how to best utilize cannabis as an overall wellness tool and communicate those resources effectively,” Peckham says. “These key factors set us apart from newer companies entering the market.”
Verilife is the New York dispensary brand of PharmaCann, the largest privately owned, multi-state operator in the industry. The company has operations in seven states — including Colorado, Illinois, Maryland, Massachusetts, Ohio and Pennsylvania — and is in the process of renovating its New York operations in anticipation of recreational sales.
“When it comes to transitioning these more rigidly regulated Eastern markets from medical to adult use, this isn’t our first rodeo,” says Jeremy Unruh, senior vice president of public and regulatory affairs. “We were one of the original licensees in Illinois and we’ve done this transition there. We have something of a playbook that we’re going to be able to use in New York, because we have seen this process and we know that it often takes longer and is more complicated than most people envision.”
Unruh says Verilife currently has approximately 120,000 square feet of cultivation space and is expanding to add another 30,000 square feet. However, the transition toward recreational customers in terms of branding and marketing is going to move at a slower pace.
“Right now, we have some edibles, we have some other general products, but a lot of the newer, level-two products are going to have to wait for the regulators to set rules around,” he says.
Unruh says the company is proud to have recently hired industry veteran David Chiovetti, who was most recently with Cookies, and before that with MedMen and other consumer brands.
Chiovetti “will be a big part of our look and feel at the retail level in New York,” Unruh says.
The company is looking at California and New York like “cannabis bookends,” he adds, with the key difference being that New York, unlike California and many Western markets, never had a regulated mom-and-pop-industry and is still operating under highly restrictive conditions.
“You can’t just jump from one extreme to the other overnight or you risk a lot of destabilization,” Unruh says.