New York’s Inaugural Cannabis Year Reaches $138M in Cannabis Sales After Second Half Surge

Despite never ending legal battles, New York’s cannabis industry finally began flexing its buds last year as business owners reported nearly $138 million in sales, quietly yielding some of it’s potential and re-emerging as the dormant east coast cannabis powerhouse that it had originally intended to be.

Last month, the Office of Cannabis Management (OCM) released its 2023 Annual Report, detailing the state of the cannabis industry through Dec 9th.

Numbers showed the state had seen almost $133.1 million from retailers and an additional $4.8 million from the Cannabis Grower Showcase initiative, a series events where local growers have a chance to showcase products & temporarily sell, on-site. Accounting for the remaining three weeks, New York State likely saw about $150 million in total sales last year.

Two things stuck out in the report: last year’s second half growth rate & the success of edibles.

After a spike in April (shout out 420), a volume decline in May, and a string of lawsuits facing the state, growth projections seemed murky and steeped in pessimism.

But New York’s 2023 summer set the pace for growth.

By volume, the first six months accounted for $32 million, while the second half generated over $101 million — a 219% increase.

At the current pace, New York could be reaching $250 million or more next year, assuming growth (by number of stores) continues and larger multi-state operators enter the market this year.

And while flower and pre-rolls continue dominating by category share, edibles surprisingly hold the top spot by # of units.

While it’s too early to tell if non-flower products as a whole (which made up 54% of sales vs 46% of flower products including pre-rolls) will continue to outperform, it suggests New York’s more densely compact hub is driving consumers to more smoke-free options.

While it’s important not to throw the book at only one year of sales in an emerging market, the report demonstrates the Big Apple’s growth potential in the immediate years, while also giving an early glimpse into how New Yorkers are shopping.

Takeaways:

• New York’s first year of legal adult use cannabis sees $138 million in sales.

• New York’s second half sees a massive surge in sales, more notably in June, where we saw a near doubling of market size.

• Flower and pre-rolls continue thriving as category leaders, though fall short when comparing flower vs non-flower products in market share. Non-flower products make up 54% of all sales, suggesting stronger preferences for more discreet consumption methods.

• Edibles lead all categories by number of units sold. This likely won’t translate to category share dominance as flower continues battling volatility and price compression in most states. Edibles are also generally priced higher than edibles, especially with more weight.

• Recreational store count continues to grow, though at a slower than expected pace as operators battle industry growing pains. Legal battles, licensing rollouts and high upstart costs continue weighing down new retailers.