The Travel Agency is set to become the first cannabis retail brand in New York State with multiple locations, solidifying its position in the legal-cannabis industry while illegal shops struggle to keep up.
In a separate development, Curaleaf Holdings Inc. announced that it has received special-use approval to open its inaugural adult-use store in Newburgh, a city situated approximately 70 miles north of New York City.
Curaleaf has plans to initiate a delivery service from this location, with a soft opening scheduled for the end of January, pending state approval. The New York-based company has been serving the medical cannabis market since 2017.
Following this announcement, Curaleaf’s stock experienced a 7% rise on Friday. Over the past year, their shares have seen a 23.5% increase, as compared to the 37.4% growth of the Nasdaq COMP.
Despite facing initial obstacles such as high real estate costs and fierce competition from numerous unlicensed stores selling unregulated cannabis products, New York State’s legal-cannabis industry is gaining momentum.
During its first year of operation in 2023, the licensed-cannabis market in New York generated $150 million in sales, considerably lower than the $274 million generated by Connecticut—a smaller state that introduced adult-use sales around the same time.
In an effort to combat unlicensed cannabis shops, Governor Kathy Hochul intends to propose legislation to further regulate the industry. Her proposals include repealing the cannabis potency tax and implementing a weight-based tax, aimed at simplifying tax compliance for distributors.
This proposal aligns with a similar initiative in the state legislature, which suggests replacing the potency tax with a 9% wholesale excise tax. By reducing certain cannabis taxes, the hope is to lower prices at the point of sale and make legal marijuana more competitive against the unregulated product found in unlicensed stores.
Paul Yau, the founder of The Travel Agency, praised the state’s efforts to address illicit stores and expressed optimism about the future of the industry.
“We are fully supportive of the measures taken to eliminate illegal shops,” Yau affirmed. He also highlighted Governor Hochul’s commitment to ensuring safe, tested, and clean cannabis products, as mentioned in her state-of-the-state address.
Cannabis Companies Gear Up for Expansion in Brooklyn
Cannabis companies in Brooklyn have faced numerous obstacles that have hindered their growth. One major challenge is that if a property is under a mortgage held by a major bank, the bank may not allow a cannabis business to be a tenant due to the federal illegality of marijuana.
Operating expenses for cannabis companies remain high as they navigate these obstacles and others.
However, despite these challenges, The Travel Agency is preparing to open its second store at 118-122 Flatbush Avenue, near the Barclays Center in downtown Brooklyn. The location offers convenient access to major public transportation routes.
The goal is to make this new dispensary the premier cannabis destination in Brooklyn, shares Yau, a representative of The Travel Agency.
Initially, the store will open as a pop-up occupying 3,500 square feet and employing 60 full-time and part-time workers. However, there are plans to expand the store to 4,800 square feet in the future.
While adult-use of cannabis has been approved since 2021 in the state, legal shops have been slow to emerge. This is because the state initially granted licenses to non-profits and individuals affected by the War on Drugs.
The Travel Agency currently operates two stores for license holders: The Doe Fund in Manhattan and GMDSS LLC in Brooklyn.
The flagship store of The Travel Agency, known previously as Union Square Travel Agency, opened a year ago just south of Union Square in Manhattan. It was the third retail cannabis shop to open in the state.
In a rebranding effort, both the original Union Square store and the new downtown Brooklyn location will be referred to as The Travel Agency.
Last November, the state also sanctioned existing medical-use licensees to participate in the recreational market. Some of the companies with an existing presence in the medical program include Columbia Care, Curaleaf Holdings Inc., Etain, Nycanna LLC, PharmaCann, and Valley Agriceuticals LLC.
Other notable companies in the cannabis industry include Curaleaf Holdings, RIV Capital Inc., Green Thumb Industries Inc., and PharmaCann.
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