On Monday, Curaleaf (CURA) (CURLF) became the first company to launch medical cannabis flower products in New York.
Curaleaf’s new products in New York
In a limited release, the company launched Curaleaf Ground Flower Pods at the Carle Place dispensary in Nassau County, Long Island. Also, the company plans to introduce the products at all four dispensaries in the next few weeks.
Vaping concerns might impact growth prospects
Curaleaf wants to expand its presence in New York’s market. However, the move in the medical vaporizer space could be risky for the company. Notably, Wisconsin and Illinois were the first two states to report life-threatening lung disease in patients with a recent history of vaping. On September 6, the CDC disclosed about 450 cases of vaping-related lung disease. On September 19, the CDC increased the number of vaping cases to 530. So far, the death toll from the disease increased to nine. To learn more, read Vaping Warning by CDC Should Worry Cannabis Players.
Currently, the CDC wants individuals to refrain from using e-cigarettes or vaping products. The New York State Department of Health recommends that residents avoid vaping. Overall, health officials want more details about vaping-related lung diseases. On September 10, Marijuana Business Daily reported that New York plans to require medical marijuana dispensaries to display warning signs. On September 16, New York imposed a 90-day ban on most of the flavored e-cigarettes as a part of emergency legislation. Regulatory agencies might have a negative impact on Curaleaf’s cannabis flower products. To learn more, read Vaping Risks: Health Canada’s Warning, US Reports More Cases.
New York’s medical marijuana market
Despite vaping-related concerns, the state’s medical marijuana market offers significant growth opportunities for Curaleaf. According to Grand View Research, the legal cannabis market opportunity in New York was worth $1.8 billion in 2018. So far, medical marijuana has dominated most of the sales since recreational marijuana isn’t legal in New York. However, the state decriminalized recreational marijuana on July 29. Grand View Research expects the New York cannabis market to report a CAGR of 14.7% from 2014 to 2025.
According to Marijuana Business Daily, New York is the seventh fastest-growing medical marijuana market in the US. The newsletter estimates the average daily medical marijuana patient growth in New York to be 67. Oklahoma, Florida, Ohio, Illinois, Maryland, and Arizona are the six fastest-growing medical marijuana markets in the US. According to Marijuana Business Daily, registered medical marijuana patients account for 0.5% of New York’s total population.
Curaleaf wants to increase its position
According to the second-quarter earnings call, Curaleaf is one of the ten vertically-integrated licensed medical marijuana companies in New York. The company operates four stores in the state. In July, the company almost doubled its canopy size in New York. Notably, Curaleaf can supply 14,000 pounds of cannabis flower annually, which is 2.5x its previous supply capacity. The higher cultivation capacity has positioned Curaleaf to benefit from marijuana legalization initiatives in New York. Read What Would Legalization in New York State Mean for Cannabis? to learn more.
Based on the second-quarter earnings call, Curaleaf expects New York to demonstrate growth potential similar to Florida in the medical marijuana space. Besides New York, Curaleaf is focused on investments and capacity expansion in other limited license markets including Florida, Arizona, New Jersey, and Massachusetts. Recently, Curaleaf also became the first company to launch medical marijuana tablets in Florida. To learn more, read Curaleaf Comes Out with Cannabis Tablets in Florida.
Many medical marijuana companies have been choosing an inorganic way to target the opportunity in New York’s market. On August 8, Cresco Labs (CRLBF) announced regulatory approval to acquire Gloucester Street Capital—the parent company of Valley Agriceuticals. The acquisition will result in Cresco Labs getting hold of one of the ten licenses given to vertically integrated cannabis businesses in New York. As a result, Cresco Labs can operate one cultivation facility and four stores in the state. To learn more about the deal, read Cresco Labs Lands New York Deal before Earnings.
On August 26, Green Thumb Industries (GTI) (GTBIF) announced the completed acquisition of Fiorello Pharmaceuticals. Notably, the deal added New York’s vertically integrated cannabis business license to Green Thumb’s portfolio. According to the second-quarter earnings call, Green Thumb Industries opened three retail stores in New York from January 1 to August 28.