New York's Billion Dollar Cannabis Boom

When New York first opened for recreational cannabis just over two years ago, it felt like a cautious first step. With just a single operating dispensary and only $2 million in sales the first month, the market’s foggy hype was far from clear. But last month, New York’s Office of Cannabis Managament (OCM) released a long awaited annual report into the progress of its adult-use market.

OCM’s report revealed a blistering pace towards one billion in total sales since the state’s launch in 2023, putting it closer to becoming one of the top five markets in the country by the end of this year. Despite storylines of illegal shops and social equity hurdles, the state’s industry has emerged into a growth story - backed by the largest year-over-year sales jump in the country. In 2024, the state saw $884 million in total sales, more than quadrupling the $166 million figure reported for 2023.

At $126 million (Dec 2024), New York also becomes the sixth largest US market by monthly sales.

A key driver has been the number of store openings. At the start of 2024, only 32 stores were operational. By November 2024, this number jumped to 215 stores—a 572% increase in less than a year. The largest spike happened between June and September 2024, where the number of stores increased from 119 to 175— 56 new dispensaries in just three months. For context, it had taken all of 2023 to reach the same number.

While growth is the story here, it’s almost important to acknowledge the bruising bottleneck that continues to plague retail license rollouts. The report shows New York’s OCM has received 7,200 applications for adult-use licenses, yet only 1,277 licenses have been issued, leaving thousands of operators stuck in limbo. This slow churn is likely to continue into 2025 with a newly filed lawsuit againt OCM and the Cannabis Control Board (CCB) just last week.

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Category & Brand Leaders

When it comes to category performance, Headset’s latest New York market data shows that flower continues to lead at roughly $41 million in monthly sales (Dec 2024). Brands like Dank by Definition dominate by individual sku performance, with most of their cateogory-leading 1/8ths priced at around $51 - no suprise given New York’s one of the more pricier cannabis markets in the country with an average item price of $35.96, according to Headset. In fact, Dank by Definition 1/8ths hold the top three flower selling products in the state.

Other flower leaders include Stiiizy and Rhythm.

By YoY growth, the flower category continues taking more sunlight with a nearly 340% YoY growth performance; though bigger jumps are happening elsewhere. Pre-rolls grew 430% YoY, while concentrates, despite still being fifth in monthly sales, captured the most growth with a 480% hike.

Takeaways

• New York saw a quadrupling in market size growth by retail sales, jumping 434% YoY and eclipsing the billion dollar milestone since going recreational in 2023. Store openings (despite continued rollout lags), have been driving growth.

• New York is poised to continue leading the country in growth. It’s past summer saw sales skyrocket, and with more shops becoming operational, New York is slated to be eclipsing $200 million in monthly sales by the second half of 2025.

• All categories saw massive growth, with concentrates and pre-rolls leading the way.

• December 2024 was New York’s second best month, with sales reaching $126 million, driven by the holiday season and increased retail accessibility. This came just under it’s biggest month ever of $131 million in November.