New Yorkers are drawn to East Coast’s first recreational cannabis dispensaries – Crain’s New York Business

For years New York has been known as a city where black-market marijuana can be delivered faster than pizza. But for the past five months, thousands of New Yorkers have been making the two-and-a-half-hour drive to Great Barrington, Mass., to stand on a line typically 70-people long outside the doors of Theory Wellness.

The shop, which opened in 2017 as a medical-marijuana dispensary, launched its recreational-cannabis retail operation Jan. 11, the first such business in Berkshire County to take advantage of a 2016 state ballot initiative that legalized sales of adult-use marijuana. The store has the added distinction of being closer to New York City than any other recreational dispensary in the country.

Being first to market in a town that is already a tourist destination has been a boon to Theory Wellness’s business. In less than five months, its sales have totaled $11 million, the owners say, with half of its 50,000 customers coming from New York state and 25% from the New York metro area. (The proprietors can access ZIP codes—without compromising customer privacy—because state law requires store patrons to submit identification as part of the purchasing process.)

For New Yorkers, visiting the well-stocked dispensary, with its five-page menu of weed strains, edibles and extracts, provides a glimpse of what legalization could look like, should a state bill find enough supporters in the Legislature. Although Gov. Andrew Cuomo included a legalization plan as part of the state budget in January, it became subject to intense debate and was subsequently removed. A new bill that combines some of the governor’s proposal with an earlier bill was introduced just last Friday by its co-author Buffalo Assemblywoman Crystal Peoples-Stokes. Insiders, however, are pessimistic about its chances for passage before the legislative session ends June 19. 

The crowd in the Theory Wellness parking lot illustrates the appeal of legal cannabis across a broad range of consumers. Great Barrington itself is demonstrating the wider economic impact that legalization can have, as some businesses in the area report a boost to their sales.

“Our business is drawing 1,000 people a day into town, about 90% of whom would otherwise not be here,” said Brandon Pollock, chief executive of Theory Wellness, which is independently owned. “You see folks from New York City doing aggressive carpooling, with four or five people packed into a Zipcar.”

That figure of a thousand people applies mainly to weekends and includes some visitors who came along for the ride and did not necessarily purchase weed. Even so, business for the recreational dispensary has so far been double what Pollock and his partners had projected, pushing the dispensary to add more than 40 employees, for a total of nearly 50, to deal with the demand. Several local shops have told him of a ripple effect on their business, with double-digit increases in sales since Theory added recreational offerings.

On a recent Saturday, the line that wound around the side of the parking lot included a handful of city residents as well as visitors from Albany; Saratoga Springs; Glens Falls; Newark, N.J.; Philadelphia; Hartford, Conn.; and Clemson, S.C. All had made the drive exclusively to shop at the dispensary—despite having connections to black market dealers at home. Though they knew they would pay more at a legal shop, they felt it was worth the added expense to be assured a safer product that they could buy in the open.

“I know a dealer, but I don’t know where [his product] is coming from,” said Steve, a middle-school math teacher in Brooklyn who was making his fourth monthly trip to Theory Wellness.

He planned to buy vape pens and cartridges costing between $200 and $300 that he said would help him relax and ease the pain in his leg from a motorcycle accident. He said he would combine the trip with a stop at the MGM Resorts casino, about an hour away in Springfield, Mass., but would have preferred buying his cannabis at home.

“Why do I have to drive 140 miles to come here?” Steve asked. “I’m just trying to get a little pain management.”

For other New Yorkers, the excursion was more like a holiday. Bronx resident Priscilla, who works at a nonprofit for the homeless, had driven up with her husband and planned to stay at a nearby bed-and-breakfast.

“I said, ‘Come on, it’s legal!'” she recalled. “‘We’ll spend the whole weekend here, honey!'”

She had learned of Theory Wellness from her son-in-law, whom she said suffers from an anxiety disorder and prefers cannabis to his prescription medicine. Anxiety is not a qualifying condition for a medical-marijuana prescription in New York, so he has been driving up on a regular basis from the city.

Even those who were satisfied with their dealers were looking forward to making a legal purchase.

“We wanted to experience going into a store and being able to shop,” said Anthony, an operations manager in Queens who had arranged the weekend trip as a birthday present for his girlfriend. “Usually, with a dealer, there’s just one or two options.”

The variety, he added, would make up for the higher prices. An eighth of an ounce of smokable weed—”flower” on the Theory Wellness menu—averages $50, plus $10 from the 20% sales tax, compared to black market prices in the city of $25 to $30. Anthony was prepared to spend as much as $350.

“My mother actually wants edibles,” he added. “A few people put in orders with us.”

Supporters of legalization in New York hope the Massachusetts model serves as a blueprint.

“Clearly there is a legal market for this, just based on what they’re doing in Massachusetts,” Peoples-Stokes said. “We hope we can convince people there is some value in turning a multibillion-dollar underground market into an above-ground market.”

But critics say that Massachusetts is setting the wrong example.

“Any report that says people are rushing across state lines to buy pot doesn’t acknowledge the vast majority of the population that isn’t clamoring for pot shops in their community,” Kevin Sabet, president of Smart Approaches to Marijuana, which has campaigned against legalization, wrote in an email. “New York’s leaders should be protecting their communities from this addiction-for-profit industry, not throwing the doors wide open.”

Legalization in Massachusetts has not been without controversy. About a third of municipalities have opted to ban recreational dispensaries from opening within their borders. In addition, the slow pace of licensing by the Cannabis Control Commission has led to the collection of just $18 million in marijuana tax revenue through the beginning of May, less than a third of the state’s forecast of $63 million for the fiscal year ending in June. The state keeps 17% of the 20% sales tax.

Even Great Barrington, which worked quickly to enact zoning laws to speed the opening of dispensaries, is seeing some pushback as four more shops await state approval to open.

“People are saying, ‘It’s too many. We’re going to be known as Pot Town,'” said Select Board member Ed Abrahams.

But so far the town, at its annual meeting, has voted only to “consider” limits on new dispensaries. Abrahams said that being first to market with Theory Wellness proved to be “a windfall” for Great Barrington.

“I saw a million-and-a-half-dollar advantage to being first,” he said of what he expects the town to receive in local taxes on the dispensaries’ revenue each year if it continues at its current rate of more than $6 million in quarterly sales. The town collects a 3% tax on sales and an additional 3% community-impact fee, which comes out of the dispensary’s pocket and likely will be spent on health, wellness and drug education initiatives.

Others are benefiting too.

“We’ve seen a double-digit percentage increase in our sales for the first two quarters,” said Robin Helfand, owner of Robin’s Candy Shop, on the town’s Main Street. The increase was “significant,” she said, because it encompassed the region’s slow period between the end of ski season and the beginning of summer.

Helfand, who distributes coupons to people waiting on the Theory Wellness line, has extended her shop hours, added staff and put in a section of salty snacks that Theory Wellness customers have requested. She is looking forward to another dispensary, Calyx Berkshire, opening directly across the street. Its owner plans to emphasize advance orders, letting shoppers stroll around town until a phone app or buzzer tells them their goods are ready.

If the plan works, it could spread the windfall around.

“It will keep people from blocking the sidewalk,” Helfand said. “And it will build business for everyone.” ■