Cannabis companies are acquiring New York City real estate in an effort to boost their chances of obtaining distribution licenses, according to RIPCO’s Colby Piper, who leads the brokerage’s cannabis division. Eight cannabis companies have hired RIPCO to help them find space in the five boroughs.
“Our clients are searching for space in all five boroughs with an emphasis on retail space in Manhattan. They’re hedging their bets based off of the licensure requirements that they’ve seen in other states with large urban centers.” Piper stated.
New York is preparing to issue an undisclosed number of distribution licenses with some slated for “social equity” applicants such as minority-owned companies or those below a certain income threshold. Canna Advisors CEO Jay Czarkowski, who has helped cannabis companies obtain licenses in Connecticut and New Jersey, argues that this real estate strategy comes with a substantial amount of risk because “real estate takes up so much capital before you’re guaranteed to actually be able to sell your products”.
Tenants are searching for 2,000 to 5,000 square-foot spaces in high foot-traffic locations within retail corridors. Some possible tenants, Czarkowski said, could possibly operate on even less space especially if they’re in the right location. Piper explains why the Lower East Side has emerged as an appealing location for many of his clients:
“They are often attracted to neighboring high-end boutique stores and the neighborhood’s demographics, which skews towards residents under the age of 30. The Lower East Side also allows for potential tenants to easily meet a possible requirement that storefronts be at least soo feet away from a house of worship or school.”
“Our clients are looking for Class A retail space, and that’s a tight market in Manhattan even though retail vacancy overall still remains higher than before the pandemic. Tenants have two options: either search for off-market deals, of which there are few, or simply offer more money upfront to make it competitive for the landlord.”
Additionally, Piper explains RIPCO’s competitive advantage in the cannabis retail market:
“RIPCO has an enormous competitive advantage because much of our established, publicly traded competition is unable to fully enter this market. Not only does this provide us a competitive advantage, this allows us to have a social impact by ensuring that we can make this industry as fair and equitable as possible. It’s an opportunity to truly make an impact while also helping marginalized communities build generational wealth at the same time.”
Piper, who launched the brokerage’s cannabis division in 2019, sees endless possibilities within the cannabis industry in New York. Further, he adds, it is an opportunity to continue the legacy of innovation within the cannabis space which began with his father, Dr. Craig Piper, who was among New Jersey’s first doctors to prescribe medicinal cannabis.