New York gears up cannabis licensing effort with $20 mln fee for multi-state operators


Jefferies analyst Pablo Zuanic said Friday it’s unclear whether New York State’s potential $9 billion legal cannabis market will provide a “significant source of upside” for larger cannabis companies such as Curaleaf Holdings Inc. CURLF, -1.09%, Green Thumb Industries Inc. GTBIF, +1.48% and Columbia Care Inc. CCHWF, +0.49%, which is being acquired by Cresco Labs Inc. CRLBF, +2.09%. The state’s Office of Cannabis Management on Thursday started accepting application for the first 150 cannabis retail licenses. Zuanic said multi-state cannabis operators will be required to pay $20 million to help fund a $200 million state fund to help finance the first licensees, which will be made up of people who have been jailed or harmed by the War on Drugs. It’s not yet been determined which of the eight license types that medical cannabis incumbents will get, Zuanic said. “For an established medical registered organization, at this stage it is not clear to what they will be ‘grandfathered’ (just cultivators), and let others do processing as well as wholesale distribution?” Zuanic said. Ascend Wellness Holdings Inc. AAWH, said earlier this week the New York market is not a priority currently and scrapped its acquisition of MedMen’s MMNFF, +0.49% and Green Thumb Industries GTBIF, +1.48% has sounded “bearish” on New York, although it’s building a large cultivation facility in the state, Zuanic said. Cresco Labs has sounded more upbeat due to the wholesale upside but only if they can play in a profitable and scalable manner but we are not sure this is known at this stage, Zuanic said.

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