ARGYLE, N.Y. (AP) – Seth Jacobs has about 100 containers full of marijuana flowers stored on his farm in upstate New York.
And that’s a problem. Not enough places to sell it.
The 700 pounds (318 kilograms) of pungent flower were harvested last year as part of New York’s first legal pot harvest for recreational use. It also has approximately 220 pounds (100 kilograms) of distillate. Months later, there are only a dozen dispensaries statewide licensed to sell what Jacobs and more than 200 other farmers produced.
Now, another growing season is underway and farmers who are still sitting on much of last year’s crop are in a financial bind.
“We’re really under the gun here. We’re all losing money,” Jacobs said recently at his farm on rolling land near the Vermont border. “Even the most enterprising and ambitious among us can’t move much product in this environment.”
Farmers of New York they are not the only ones struggling with difficult economic conditions. Marijuana growers in western states have also complained that low prices, stiff black market competition, high state taxes and federal banking and export restrictions have made it hard for legal growers to make money.
But the plight of farmers in New York is directly related to the bumpy launch of the state’s recreational pot market.
State leaders had always planned to equip the market in stages, giving a diverse set of participants a chance to get them. The state process for licensing new dispensaries, however, has progressed at a much slower pace than expected.
Last fall, Gov. Kathy Hochul predicted 20 new stores opening each month or so to start this year. Instead, one store was open earlier this year, with 11 more opening since then.
Unlicensed stores rushed in to fill the void, especially in New York City, but these outlets are not a legal market for the state’s farmers. Federal law prohibits New York farmers from transporting their crop across state lines.
That means limited room to sell the 300,000 pounds (136,000 kilograms) of cannabis grown in the state last year, much of the product intended to be processed into items like gummies and vapors.
Across the state, there is an estimated hundreds of millions of dollars worth of unsold cannabis, about 80 percent in the form of cannabis oil, according to the New York Cannabis Association, a trade group. There are concerns that the smokable flower will eventually become too old to sell.
Jacobs stores her containers of sprouts at Slack Hollow Organics in secure, temperature-controlled units. More valuable still is the distillate in various processors waiting to sell. Elsewhere in rural New York, Brittany Carbone, co-founder of Tricolla Farms, said the stock they’re sitting on includes 1,500 packages of pre-rolled joints and about 2,000 packages of edibles.
“What we really need to see is more retailers opening and that will give us the sustainable solution,” Carbone said.
The lack of sales is a particular problem for small farmers who were stretched financially to produce last year’s crop and now need capital for the second year.
Jacobs, whose brand is Bud & Boro, said he won’t be growing plants to distill this year because of the backlog. Carbone said they are planting on less than the acreage they are legally allowed and are holding back on infrastructure investments such as hoop houses to help grow.
In New York, many critics blame missteps by state officials in their well-intentioned effort to open the market to a wide variety of employers. This meant setting aside the first legal pot harvests struggling hemp farmers. And people with previous convictions for marijuana they had the opportunity to open some of the first dispensaries.
Critics say the process has been complicated for dispensary applicants. And there have been problems with a planned $200 million fund to help “social equity” dispensary licensees with the costly task of setting up shop.
The fund was to consist of up to $150 million in private investment. But state Dormitory Authority spokesman Jeffrey Gordon declined to say whether private money had yet been invested, saying in an email only that “work is underway to raise private capital” .
Gordon pointed to New York’s “unprecedented and complex” effort to create a new state company from the ground up, which included evaluating 10,000 commercial properties for dispensary locations and arranging banking, training and other services for licensees .
The retail rollout was also hampered by a federal judge’s ruling in November that temporarily barred New York from issuing dispensary licenses in parts of the state, including Brooklyn and Buffalo. The injunction was later narrowed to the Finger Lakes region before a settlement was reached this week.
The Office of Cannabis Management has taken recent steps to boost demand, including the tentative approval last month of 50 new dispensary licenses. And plans are afoot for grower groups to team up with retail dealers to sell their cannabis at venues other than stores, such as a farmers’ market or festival.
“We know these growers are concerned about how to sell last year’s crop when deciding whether to plant a cannabis crop in 2023, and we will continue to support them as more adult dispensaries open to sell their products ” said Aaron, a spokesman for the cannabis office. Ghitelman said in an email.
Elsewhere, Hochul and the Legislature passed a new law giving regulators broader power to seize weed from illicit shops that compete with legal shops.
Although frustrated, farmers like Jacobs and Carbone are holding on. Carbone has gotten his farm’s brand, TONIC, into six dispensaries. Jacobs has received some intermittent payments and hopes the farmers’ market policy being designed will give him a new avenue to sell his marijuana.
“This will all be worked out,” Jacobs said. “And I want to be there when he does.”
