New York Marijuana Farms Have $750 Million Of Weed & Nowhere To Sell
New York Marijuana Farms Have $750 Million Worth Of Weed & Nowhere To Sell
By almost all metrics, New York’s cannabis market rollout should be in the final innings. The state began handing out growing licenses to more than 200 farms last spring and farmers have since sowed seeds, tended to rows of plants all summer, and just in the last few weeks, finished harvesting.
Now, hundreds of thousands of pounds of weed — worth hundreds of millions of dollars — is ready to be sold at dispensaries.
There’s one hitch: Instead of being shipped to retail stores, the weed is just piling up. Though a rampant gray market is already up and running, not one legal recreational dispensary has yet opened in New York, despite the state regulator’s repeated assurances that cannabis stores would be a fixture by the end of this year.
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The languishing stockpiles — estimated to weigh around 300,000 pounds, according to the Office of Cannabis Management — pose a host of problems for farmers, not least of which is that over time, cannabis can deteriorate.
Based on an average estimated wholesale value of about $2,500 per pound, according to Cannabis Benchmarks, a research firm that tracks wholesale marijuana prices nationwide, the hoard could be worth as much as $750 million. If farmers don’t get their harvest into stores soon, that near-billion-dollar revenue will eventually start to dwindle. In the meantime, farmers have to figure out how to store it indefinitely, making sure the weed is as fresh as possible while also keeping it safe from theft or potential contamination.
Applicants for one of the initial 150 individual retail licenses and 25 nonprofit licenses expect to hear back from the state any day, but a green light from the OCM is only the beginning of the long process involved in opening a storefront.
“It’s an unclear path to market,” said Melany Dobson, chief executive officer of Hudson Cannabis, a 520-acre farm about two hours north of New York City. “We’ve been told again and again that dispensaries will open before the end of the year. I’ve acted as though that’s our single source of proof, so we’re prepared for that.
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