More companies apparently are taking a pass on New York in favor of other medical cannabis markets due to the high financial requirements – and potentially lower returns on investment – in the Empire State.
Startup costs for each of the five businesses selected to receive MMJ licenses could hit $25 million, and profits likely won’t materialize for at least a few years, according to a report in Crain’s New York Business.
It’s simple math for companies such as Terra Tech, a publicly traded firm that has cannabis business interests in California and Nevada.
Up until last week, a division of Terra Tech was considering submitting an application in New York. But the company decided not to take a shot and will instead focus more on Nevada, which has a much broader MMJ law, according to Crain’s.
“Putting together a team is not difficult for us, but we want to make sure we’re utilizing our assets and capital for the most advantageous purposes,” Terra Tech CEO Derek Peterson told Crain’s.
Other companies and entrepreneurs have also decided to abandon plans for New York to focus on greener pastures.
The competition to land a license is also likely deterring plenty of other applicants, as some big players from the mainstream business world as well as established cannabis companies in other markets have thrown their hats in the ring.
The application deadline is Friday, and license winners will be announced later this summer.