$20M to Start an MMJ Business in New York?

Medical marijuana in New York might prove to be a pretty wealthy club.

Startup costs to open a dispensary and grow could run over $20 million, according to a recent report by The New York Times. And it might take upwards of $1 million just to navigate through the application process, estimated one cannabis lobbyist quoted in The Times piece.

These lofty costs would make it difficult for small businesses to get involved.

With that as the backdrop, the promise of the legal cannabis industry in the Empire State is still drawing big names and big money.

Those who have reportedly shown an interest in applying for licenses, according to The Times, include Ari Hoffnung, former Bear Sterns managing director; Derek Peterson, a former senior vice president at Morgan Stanley Smith Barney; and Dean Petkanas, a former vice president of corporate finance for Stratton Oakmont (which was depicted in “The Wolf of Wall Street”). Patrick McCarthy, a Republican activist-turned-cannabis lobbyist, also has several clients seeking licenses.

The paper also suggested that already-established cannabis firms from other states will probably have an edge when it comes to the state licensing process, because they have track records of success. The state is only handing out five licenses to companies that will operate as growers and retailers, allowing them to open a total of 20 dispensaries.

There’s no telling when the application process may even begin; the New York law gives the state Department of Health 18 months from this past July to enact regulations and issue business licenses.

4 comments on “$20M to Start an MMJ Business in New York?
  1. doug card on

    There is no ay it would cost more than 1 million to run a dispensary for a full year. Salaries 500K and everything else 500K. I don’t know anything about permits or bus start ups, but I know you can get a decent rental store front in most areas where a town would allow one for about $1500 a month and salaries for 4 workers at all times for less than 400K per year. So that leaves about 18 million for what?

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  2. Brook on

    Interesting, so right out of the box, the blood sucking politicians from NY set fees and afforabilty for the ultra rich or evil wall street corporarions…CO and WA fees and taxes have opened the door to catel weed again with silly unaffordable meds… Will the madness ever stops…I hope CA does not legalize except for mmj…i have no idea where these prices come from for meds even in CA at the store fronts…we see pricing 3x our donation price in these stores…we no longer deal with these greedy pot store owners or dirty politicians…we are a CA 501 c7 and legal grow for cancer patients….

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  3. River Valley Caregivers on

    I agree Brook, most folks from middle incomes and below cant afford much more than $200/ounce and thats exactly what their paying in a few state’s rural areas. Other dispensories charge $300/ ounce for less quality. Their getting greedy out there. Some legal are worse than illegal dealer prices and they wonder why theres a larger black market now in our area.

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  4. Rick Rosio on

    The realities of developing a vertical cannabis program will depend more locations, the ability to develop the proper infrastructure regarding the agricultural aspect as well as the value added process of curing and extracting and then the program driven models that can be affordable and utilize the right stains for the various illness’s that cannabis therapy works so well for. This is about liveable wage jobs in a business model that can provide transparency and help rural communities thrive again as they can provide the necessary infrastructure to support a large marketplace. We focus on Veterans and the disabilities community in providing the least toxic method of pain management and wellness using cannabis extracts . http://www.veteransforcompassionatecare.org

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