With Vendor Applicants Raring To Go, NYC’s Cannabis Leasing Market Hits Breakneck Pace
Bisnow.com Features Lee & Associates New York City's Greg Tannor and Jessica Gerstein
After more than a year of build-up, vendor license applications awarded by New York State's Office of Cannabis Management are slated to open at some point in the next 30 to 90 days. As the dawn of NYC's formal cannabis retail market edges closer, aspiring vendors have accelerated their searches for available retail space and are signing lease agreements with a range of different conditions, experts in the space told Bisnow.
Crucially, more spaces are also appearing on the map as landlords become more willing to do deals in spite of potential risks. Valentino said his client, a national cannabis brand, is willing to pay market rents in the deal in a location and retail environment in which most tenants are looking for discounts.
The number of potential cannabis tenants has quadrupled over the past 12 months, said Greg Tannor, a cannabis leasing expert and Lee & Associates' executive managing director and principal. Those exploring options for space include everyone from experienced business owners to aspiring entrepreneurs looking at densely populated NYC.
“Everyone out there thinks that they can go and win a retail license, hence more activity in the market,” Tannor said. “People think that it's like a license to print money, when there's a lot more detail into it. It's an extremely competitive licensing process.”
The OCM intends to award the first cannabis vendor licenses in the state to applicants with prior convictions related to marijuana, or who have family members with prior convictions. The OCM has also promised to match up to 150 of the first round of licensed vendors with a property obtained by the state government as part of its $200M social justice fund.
But there's no limit to the number of second-tier licenses that will be available, an OCM spokesperson told Bisnow by email — leaving applications open to anyone with a demonstrated business plan who is willing to submit all the paperwork required by the state.
“We have been busy from day one, but now I feel like the floodgates opened,” Lee & Associates Senior Leasing Associate Jessica Gerstein said.
Because applications for retail licenses aren't even open, let alone allocated, the deals for space being struck aren't for traditional leases, rather a mix of arrangements.
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