The city this week released updated text for its major housing reform proposal, with new mandates for deeper affordability levels. The Department of City Planning (DCP) on Thursday released the annotated draft zoning text of the City of Yes for Housing Opportunity, Mayor Eric Adams’ plan to add housing in every neighborhood through various zoning [...]
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New York cannabis regulators further expanded the state’s legal market on Thursday with the approval of another 101 marijuana operators, but the board also got an earful from financially troubled retail permit holders who said they may go bankrupt while awaiting the green light to open for business.
The state’s Cannabis Control Board voted unanimously to approve the recommended licenses for 35 storefront dispensaries, 22 microbusinesses, 25 growers, 11 distributors, and eight processors.
The board also celebrated surpassing 100 operational recreational dispensaries.
“This is an incredible milestone for New York state,” CCB Chairwoman Tremaine Wright said at the opening of the meeting. “March has been our best month yet in terms of sales and new dispensary openings.”
New York now officially has 103 recreational marijuana stores serving the public, with a total of 122 approved to open their doors. That includes nine that are tentatively slated to open before the cannabis holiday of 4/20 this month, OCM Executive Director Chris Alexander said in a report to the board.
Alexander also promised that more business licenses of all stripes are on the way, and that OCM staff is working hard to process applications as quickly as possible.
“We have dramatically increased the access of New Yorkers to safe, tested, legal product, and that momentum is only continuing,” Alexander said. “We are nowhere near close to what the market will be, but we do have (retail) access in every region and across 20 counties so far at least.”
The legal New York marijuana market also continues to slowly but steadily ramp up on the sales front, topping a new sales record last month of $32 million and average regular monthly sales growth of 25%, OCM Policy Director John Kagia told the board.
“Our first quarter sales of $84 million are 10 times what they were in the first quarter of 2023, which is great to see,” Kagia said.
However, Kagia also cautioned that there could be turbulence ahead, given a recent report from Whitney Economics that found an industrywide shortfall of $3.8 billion in delinquent payments between retailers and suppliers. Kagia urged New York cannabis companies to report any delinquency that’s older than 30 days to the OCM, so regulators can track which companies are paying their bills and which aren’t.
“It’s critically important to do this early rather than waiting until the issue manifests on the scale we’ve seen in other jurisdictions, and then needs to be reigned in,” Kagia said.
The OCM is also trying to craft anti-saturation policy so as to ensure that New York cannabis shops eventually reach a steady annual revenue stream of between $7.5 million and $10 million, he said, up from the current statewide average of $5.2 million.
Roadblocks remain for operators
Following Kagia’s presentation, a swath of licensed retailers who said they’re still awaiting final approval to open for business told the regulators they’re not sure if they’re poised for success or failure, given how much money they’ve poured into their ventures while waiting for word from the OCM and CCB.
“I’m stuck in OCM hell. There’s still no license. No one can or will tell me where I stand. I email every day, call and talk to different people, all with the same answer: You’re in review,” a Staten Island cannabis shop licensee told the CCB. “I’m 74 years old, working three jobs to stay afloat. This was supposed to be my legacy to my children and grandchildren. Instead, I’m broke, broken, and running out of hope.”
Another retailer, who has a location in SoHo, said he has investors willing to put $4 million behind his shop as soon as it gets open, but he has no idea when that will be, since he can’t get a straight answer from anyone at the OCM.
“I’m about to sign a lease that will deplete my entire life savings,” he said, adding he’s worried about ending up homeless. “I’m very scared I won’t have a license by the time my renovations are finished, my investors will walk away, and all my efforts will have been in vain. I haven’t slept more than three hours at a time since March, since that’s when I anticipated I would have received my license.”
Yet another retailer, who has been paying employees at his delivery-only cannabis company since getting initial approval last summer, said he’s endured a “nightmare” and is about to lose everything if he can’t get approval to begin sales.
“I used more than $100,000 of my own money, and I’m about to go bankrupt,” he said. “My landlord’s calling me right now, looking for money.”
Yet another retail licensee who has also yet to open his shop disputed Kagia’s estimate that New York cannabis shops are pulling in an average of $5.2 million in revenue annually, and suggested that the statistics were “skewed” by more successful dispensaries in upstate New York where localities have cracked down much harder on illicit storefronts than have officials in New York City.
“I’ve been in this program for over a year now. I worked at several other licensed dispensaries in New York City just to get experience before I open my own business,” the permitholder told the CCB. “They’re doing terrible, terrible, terrible numbers. I’m talking about $8,000 Saturdays on places that have like $25,000-$35,000 rent.”
David Nicponski, a representative of the New York Cannabis Retailers Association and a shop licensee himself, also told the CCB that the OCM has a communications problem that needs fixing so as to benefit all stakeholders.
“We have been contacting the OCM thrice weekly for the last seven weeks,” Nicponski told the board. “We have had no responses to any of those 21 communication attempts. The lack of communication is not an isolated case… It’s surprisingly common issue among licensees, with some licensees waiting months for a response.”
This article originally appeared in Green Market Report.
A Long Island-based developer plans to transform the longstanding but now shuttered Papaya King site on the Upper East Side into a 17-story, mixed-use building, according to recent filings with the Department of Buildings.
ZD Jasper Realty, which in the last year or so has been busy scooping up various parcels across Manhattan, including the more than 90-year-old hot dog chain's former 5,000-square-foot, 1-story building at 171 E. 86th St., filed plans Friday to erect the new development, which will include 25 units, according to city records.
The Tom Wu-founded company, headquartered in Great Neck, bought the site, between Third and Lexington avenues, for $24.5 million from luxury developer Extell in November, Crain's reported. ZD Jasper had borrowed $14.5 million from Pacific National Bank in order to finance the deal.
At Papaya King's old property, records indicate that ZD Jasper Realty wants 2,692 square feet across the first and basement floors to be used for retail, and the remaining 57,060 square feet to be residential condo apartments. A representative for the development told Crain's that Brown Harris Stevens will be handling its marketing and sales. The new building filing was first reported by PincusCo.
Extell's chairman, Gary Barnett, had initially wanted to redevelop the former hot dog and fruit juice stand himself. In June 2022 he filed plans to demolish the single-story brick structure, which also once contained a Children's Place clothing store and a Cohen's eyeglasses shop, but it doesn't appear that those permits were ever approved, Crain's reported. The flagship Papaya King closed its doors last April after 90 years.
The owners of the self-described no-frills frankfurter company looked to continue whipping up its famous offerings in a new space just across the street, at 1535 Third Ave., in a former Modell's sports store, but that plan was also never fully realized. According to reports from earlier this year, the chain was evicted from the space and sued for millions in damages as well as unpaid rent.
Meanwhile, ZD Jasper Realty, which did not respond to a request for comment, purchased its first Manhattan property in 2023, also from Extell—a Hudson Yards development site for $52 million—in order to construct an 11-story, 128-unit project.
Archimaera Architecture, which is the architecture firm on record for the 171 E. 86th St. project, also did not respond to a request for comment.
This story has been updated to reflect that the proposed units will be condominiums, not rentals.
The climbable structure at the center of Hudson Yards will reopen later this year. Vessel, an interactive public artwork, first opened in 2019 along with the mega-development but closed in 2021 after several people died by suicide there. Three years later, the structure will reopen to the public but with new barriers in place, as [...]
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Rent the Runway notched a record one-day jump after reporting earnings that beat investor expectations and stoked hopes that the clothing-rental company can turn itself around.
The stock surged 162% Thursday to close at $19.38 a share after the company reported fourth-quarter revenue and adjusted earnings that beat Wall Street expectations.
“Execution will be key among all this, but we think the business model has legs,” Bloomberg Intelligence analyst Poonam Goyal said.
Goyal added that return to work and new offerings for everyday wear in addition to party and formal attire should help the company maintain subscribers over time.
The quarterly report was a breath of fresh air for the company after investors had mostly given up on it. Rent the Runway has been under pressure since the Covid-19 pandemic and working from home shifted consumer fashion trends. Even as workers returned to the office, Rent the Runway struggled to keep subscribers due to a mismatch in inventory.
It reported a 35% decrease in churn from users who primarily cited inventory as a reason for not returning, according to JMP Securities analysts led by Andrew Boone in a Thursday note.
Boone also praised Rent the Runway for improving its website.
“With a faster and more functional site, the consumer experience is also better, positioning the company well to grow subscribers in 2024,” he wrote, adding that the business feels more stable today. Boone maintained a market outperform rating on shares.
Still, even with Thursday’s move, Rent the Runway shares are down roughly 95% since its public debut in October 2021. Just last week, the company implemented a 1-for-20 reverse stock split in order to increase the per share price of its stock to regain compliance with the minimum required for continued listing on the Nasdaq Capital Market.
Nasdaq told Rent the Runway in late March that it was at risk of being delisted if its market value didn’t close at or above $35 million for a minimum of 10 consecutive business days before Sept. 23.
Shares will likely be choppy in the next three to six months, said BI’s Goyal, but she still sees the company as being “on the right track” with subscriber growth.