$12M in 6 months: How New York’s First Legal Weed Retailer Exceeded Expectations
From the Gothamist:
Cannabis sales figures released on Monday show that the dispensary run by the nonprofit Housing Works exceeded its revenue expectations for the first six months. But it’s unclear whether other early licensees who have struggled with New York state’s slow rollout of the retail industry will be able to replicate this success.
The state’s cannabis program has prioritized granting licenses to nonprofits like Housing Works as well as people whose lives were affected by prohibition. In late December, when Housing Works opened New York’s first legal recreational marijuana dispensary in the East Village, a line stretched around the block, and it sparked a flurry of local news coverage. But the initial hype was not a guarantee of sustained sales — especially given how many unlicensed dispensaries were selling untaxed weed nearby.
The Housing Works shop sold $12 million worth of edibles, flower and other marijuana products in its first six months, averaging $2 million a month. That’s twice the monthly revenue the nonprofit was projecting when it launched, according to Matthew Bernardo, president of Housing Works, which provides health care, housing and social services.
“We were very pleased and it was really successful from day one,” Bernardo said. The dispensary did about $40,000 in sales within three hours of opening on Dec. 29, the nonprofit said.
Because state officials have been slow to open other dispensaries, Housing Works accounts for more than a third of the $33.4 million the state’s legal recreational marijuana industry generated in its first six months. But more than 400 retail licenses have now been distributed, and other shops are coming online one by one. As of Friday, seven legal dispensaries operated across the five boroughs, and 17 had opened statewide, not counting a handful of delivery-only operations.
The state’s legal recreational cannabis industry generated $33.4 million from sales in its first six months. Housing Works brought in more than a third of that revenue.
From the New York State Cannabis Control Board
For Bernard Allulli, who has a license to open a dispensary in Manhattan, the initial sales figures from Housing Works are encouraging. “It helps with investors, obviously, for those numbers to be released, because people know that this is a real thing,” Allulli said.
Still, he said he felt Housing Works had certain advantages.
“I’m not going to be on Broadway and Eighth Street right on top of NYU, and I’m not the first shop that opens up that has all of that press behind them,” Allulli said.
At Housing Works, deliveries currently account for about 5% to 7% of sales, and Bernardo said the goal is to expand that segment of the business. “We are trying to get the word out,” he said.
So far, Housing Works delivers to parts of Manhattan and Brooklyn as well as Long Island City in Queens.
Part of the appeal of legalizing marijuana was to generate more tax revenue for the state. Housing Works created about $1.8 million in sales tax in its first six months. New York’s recreational cannabis retailers generated an estimated $4.3 million in sales tax revenue during that time, based on overall sales figures from the state’s Cannabis Control Board.
Tax revenue from the recreational cannabis program is supposed to go towards education, grants to community organizations and drug treatment programs.
Meanwhile, Housing Works is using its cannabis revenue to bolster its social programs, including housing and job training for people re-entering the community after being incarcerated, Bernardo said.
He added that the company is planning to launch a cannabis job training program where people can shadow employees at the Housing Works dispensary, so they can either work there or elsewhere in the legal weed industry.