Heads up! This report was published a while ago and is now considered out of date. To get all of the latest insights into the vapor pen market, check out our most recent report!
Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are connected to Headset’s business intelligence software. Headset’s data is very reliable, as it comes digitally directly from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider. In this report, we examine sales from US Headset Insights markets. This includes AZ, CA, CO, FL, IL, MA, MD, MI, MO, NV, NY, OH, OR, and WA. Unless otherwise mentioned the analysis period is June through November 2023.
New York legalized recreational cannabis in 2021, however, the launch has been met with hang-ups along the way. As of November 2023, New York adult use has cleared the legal hurdles and is now in the early stages of what is set to be one of the largest adult-use markets in the US. There a many things that make New York a unique market such as the high population of the state, and the presence of NYC one of the country’s largest and most dense cities. In this report, we will discuss the data from the small but rapidly expanding adult-use market, covering topics such as sales growth, store growth, consumer preferences, market rollout, and what we can expect over the near and long term from Headset’s newest cannabis market.
New York has generated $100M in total sales between June and November 2023. This puts New York behind even medical-only Ohio for total sales during this period.
With only 30-40 licensed retailers in the state as of mid-December 2023 expanding access is going to be a huge driver of sales growth for New York in 2024.
As of November 2023, New York had 126 brands, similar to Ohio (114) and Maryland (105). However, competition is growing quickly with total brand count up 40% since June.
In November, the average store sales were over $580k, the fifth-highest among Headset's US markets. However, this is mainly due to the low number of stores and is expected to decrease in 2024 as more stores open.
Categories such as Edibles, Vapor Pens, and Pre-Rolls have a higher representation in share of total sales versus Flower which is easily obtained through the illicit market.
Concentrates which is vastly overpriced compared to other categories and the national average is also underrepresented in their share of total sales.
The combination of a slow roll-out, low store count, few brands, and regulations on discounting are all factors that contribute to the highest prices of any tracked US market.
Millennial males, the largest consumers in the US, are an even larger part of a New York market that skews heavily towards male consumers in general which generate nearly 70% of all cannabis sales.
When examining the total sales of regulated adult use in New York over the past six months, it is observed that the state has the lowest sales compared to Headset's 14 tracked markets in the US. Between June and November 2023, New York recorded approximately $100 million in total sales. This places the fourth most populous state in the US behind even Ohio, which only allows medical cannabis sales.
New York sales growth is highly dependent on expanding access, as of mid-December 2023 there are only around 30-40 stores in the state. Naturally, as more New York State customers gain access to the network of legal adult-use retailers we will see state sales totals climb.
New York’s cannabis brand count is one of the lowest in the country at 126 unique brands in November 2023 similar to smaller markets such as Ohio (114) and Maryland (105). New York also has a similar amount of brands in the market as Illinois (131). Illinois is another large population state that has been plagued by a slow roll-out, legal challenges, high prices, low competition, and scarce access.
Though New York is currently an early-stage emerging market there are certainly signs of intensifying competition. Since June the brand count in the state has jumped 40% and this trend will almost surely continue in the near term. The increased competition will be a major contributing factor in driving down the price of cannabis products, an essential development that will allow legal retailers to attract consumers and increase sales.
Average Monthly Store Sales
In November 2023, the average New York retailer totaled over $580,000 in sales. This puts them in the top five US markets for average monthly sales. However, the high sales total is heavily correlated with low store count. Other markets in the top five for average total sales per store are Illinois, Arizona, Maryland, and Nevada. Markets that are known for low access relative to the size of their consumer base. As the number of retailers increases rapidly in 2024, the average monthly total sales per store will likely decrease.
There are interesting early-category trends in New York compared to the rest of the country. In contrast to the overall US cannabis markets, New York shows a strong popularity of products such as Edibles, Vapor Pens, and Pre-Roll. However, Flower and Concentrates have a lower representation in the New York market compared to the national average. One possible reason for this is the large illicit market in New York, where Flower is easily accessible. On the other hand, Vapor Pens, Edibles, and Pre-Roll have additional labor and safety regulations involved, making them advantageous to purchase from regulated retailers. Additionally, Concentrates are priced very high compared to other categories and the national average, which supports why that category is underrepresented in the share of total sales. As the New York market becomes more established over time and customers are increasingly directed to legal channels, category preferences will likely align more closely with national averages.
Typical of emerging markets, New York has high prices. In fact, the state has the highest prices of all the markets tracked by Headset. In November, the average item price (AIP) in New York was $41.27, which is 78% higher than the average across the rest of the US market. While the price per gram (EQ) of inhalables categories such as Flower, Vapor Pens, Concentrates, and Pre-Rolls is 108% higher than the rest of the market. The low competition among brands and retailers incentivizes high prices. We have observed similar market conditions in Illinois as well. The combination of a slow roll-out, low store count, few brands, and regulations on discounting are all factors that contribute to high market prices.
Over the past six months, prices have remained consistently stagnant, with the Average Item Price (AIP) either remaining unchanged or experiencing slight increases since June. On a national level, we have observed that the AIP has either remained flat or slightly decreased. Looking ahead to 2024, it is anticipated that prices in New York will decrease, provided that the number of retailers and brands conducting business continues to grow. This will play a vital role in the success of the New York market, facilitating sales growth and enhancing its competitiveness against the illicit market.
Cannabis Consumer Demographics
This graph compares the proportion of total market sales in New York by demographic group to the proportion of sales attributed to the demographic group nationally — the index below the graph compares these values. If the index for a demographic group is greater than 100, then that group spends relatively more in New York than they do in the rest of the US. If the index is lower than 100, then that group spends relatively less in New York than they do in the rest of the country.
Millennial men in the US capture the largest share of total sales among all demographic groups, accounting for 30%. However, this trend is even more significant in New York, where this group captures 35% of total sales in the state. New York also has a higher proportion of male consumers compared to the rest of the country, resulting in nearly 70% of all sales.
The year 2023 was a slow year for the emerging New York market. Legal challenges delayed the opening of stores, resulting in a market with few vendors. Although stores have started to open rapidly, there are still obstacles such as low competition, limited retailer access, high prices, and a thriving illicit market. Despite these challenges, New York is positioned to become a significant market. The number of brands has increased by 40% in the last six months, and new stores are opening every week. Undoubtedly, 2024 will be a pivotal year for cannabis in the Empire State as the market grows to meet existing demand. As always, Headset provides the data that retailers, brands, and other cannabis players need to stay informed about the evolving landscape in New York in real time.