New York's pot legalization adds urgency to U.S. reform calls (updated)

Cresco Labs

31/03/2021 20:00

(Adds comment from Curaleaf)
    By Shariq Khan
    March 31 (Reuters) - New York's legalization of recreational
marijuana could generate $5 billion in sales for the first year
and raises pressure on other states to follow the 16 that have
now approved the plant for everyday use, the head of one of the
country's biggest producers said on Wednesday.
    New York Governor Andrew Cuomo on Wednesday signed a bill
paving the way for recreational sales of marijuana to begin in
the state next year, pushing an ETF tracking U.S. pot producers'
stocks  MSOS.N  up more than 6% and on track for its best day
since the U.S. presidential election.
    Ben Kovler, chief executive officer of Green Thumb
Industries Inc, the second largest U.S. pot producer by market
value, said his company will allocate "significant dollars" to
the New York market - set to be the second largest legal market
after California.
    New York could be worth more than $5 billion in just its
first year of sales, without including "cannabis tourism" from
other states, Kovler said in an interview.
    "New York is New York, (there) couldn't be a bigger deal,"
Kovler said.
    Global X Research analyst Pedro Palandrani estimated that
based on Cuomo's forecast of $350 million in cannabis tax
revenue, the state's first year sales should top $2.5 billion to
$2.7 billion.
    In comparison, Colorado crossed $2 billion in total cannabis
sales last year after more than five years as a recreational
market, according to the state's revenue department's figures.
    While the COVID-19 pandemic and resulting lockdowns cut into
tax dollars that states earned from sectors like hotels and
airlines, the idea of legal cannabis sales offered some hope to
plug up battered fiscal budgets across the country.
    "What cannabis brings and is now proven is tax revenue of a
material nature," Kovler said, citing the example of Illinois,
which in February collected more tax revenue from cannabis than
alcohol.
    Five states had legalized recreational marijuana by ballot
initiatives during the November presidential election, and New
York's move now puts pressure on others like Connecticut,
Palandrani said.
    Joseph Bayern, CEO of Curaleaf Holdings Inc  CURA.CD , the
largest U.S. cannabis company by market value, called New York's
legalization a "significant milestone for the cannabis industry"
and said he now expects Pennsylvania, Connecticut and Maryland
would likely follow suit.
    "(New York is) a quintessential emerging market, which is
huge ... It will have an impact on the way the federal
government thinks about legalization," said Nicholas Vita, the
CEO of New York-based Columbia Care Inc  CCHW.NLB .
    The effects of New York's legalization will not just be
limited to other governors and states, as the financial capital
of the world, it also sets "a really good precedent from a
federal point of view too," said Charles Bachtell, CEO of Cresco
Labs Inc  CL.CD .

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Marijuana Legalization by State Marijuana Legalization by State 
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New York and Virginia take steps to legalize marijuana   
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 (Reporting by Shariq Khan in Bengaluru; Editing by Bernard Orr
and Vinay Dwivedi)
 ((Shariq.Khan@thomsonreuters.com; Within U.S.+1 646 223 8780,
outside U.S. +91 80 6182 2681; Twitter: @shariqrtrs;))