Massachusetts adult use operators in western Massachusetts are planning for New York’s new legal market, even if the new market is not expected to impact sales any time soon.
“People who reside in other states and come visit the Berkshires are part of our customer base,” said Jesse Tolz, marketing director for The Pass, a retail store in Sheffield, Massachusetts. “We opened our dispensary back in 2020, and since then we’ve increased our grow capacity with indoor, outdoor, and greenhouse cultivation. We launched our wholesale channel over a year ago, distributing to plenty of other great dispensaries throughout Mass. Very soon we’ll be opening another facility in town, where we’ll significantly scale up our production capabilities to increase supply for retail and wholesale.”
The Pass is a vertically integrated company with a single retail outlet on Massachusetts’ western border. The region has been a popular one for retail outlets, considering it draws New York, Vermont, and Connecticut customers. Now, all three states are in various stages of creating their own legal adult use markets, potentially cutting into the market shares that western Massachusetts currently dominates.
There are about nine New York municipalities along the Massachusetts border, none of which opted out of the new adult use market, unlike the 57% of New York municipalities that voted to bar retail adult use sales. Two towns on the border, Ancram and Copake, voted to ban social consumption.
New York state regulators have said they are aiming for the first retail sales to begin by the end of 2022 or early 2023. Although that is roughly a year away, the market will also likely need time to stabilize before prices in New York can begin competing with Massachusetts.
Other producers see legalization in New York as an opportunity for growth.
“I think we have a great following in New York, Connecticut and New Jersey,” said Berkshire Roots CEO James Winokur. “We’d like to participate in the New York market.” Winkur said that he plans to obtain a manufacturing license in New York to spread the Berkshire Roots brand.
At the same time, Winkokur said he expected that there is a possibility for his retail store in Pittsfield to take a hit, but that the company was planning to make up any potential losses by increasing its wholesale business.
“Customers with access to cannabis in New York will stay in New York and we’re preparing for that,” said Winokur.
Winokur estimated that about 30% to 40% of the customers that visit their Pittsfield location were from out of state, but he added that it is tough to determine how many of those people are commuting for cannabis, or simply purchasing while on vacation.
“It’s a vacation area, so we see a lot of out of state license plates,” he said.
Theory Wellness is a multi-state operator with facilities in Maine and Massachusetts, including a retail store in Great Barrington along the New York border. They see legalization as another opportunity for the growing company.
“On our end, the end result is more access to cannabis, which is better,” said Thomas Winstanley, VP of marketing for Theory Wellness. “We hope to be a part of it at some point. We have a lot of great customers from New York that support us.”
Although it fluctuates, at times as much as 50% of the customer base is from New York, according to Winstanley.
“We’re just stoked to see more states legalizing,” he said. “The cannabis industry in New York will be interesting as it opens up. We know it’s going to affect us but I think the benefits outweigh the negatives.”
Canna Provisions operates an adult use retail facility close to the New York border in Lee, Massachusetts. As a result, roughly 25% of their customer base comes from the Empire State, according to co-founder and COO Erik Williams.
“The normalization of cannabis is good for everyone,” said Williams. “It’s good for the industry as a whole.”
Williams also said that despite cannabis currently being legal for adult use in New York, there is still a long way to go before the adult use market matures enough to become competitive with Massachusetts.
“When I look at the next year, New York has zero effect on us,” said Williams. He added that even after the first retail location opens, the market will still be at a disadvantage when competing against Massachusetts.
“There needs to be the wholesale supply and production needs to stabilize,” he said.
Williams also said that there was a grocery store that was about as far away from the highway as his retail store, and that, in his opinion, there was a similar ratio of New York license plates in the parking lot.
“Just because New York opens doesn’t mean that we’re still not going to be the most convenient or closest dispensary for a large number of New Yorkers for a long time,” he said.