By Nicolas Guarino,

Following a modest and measured rollout of licensed adult-use stores beginning in 2022, the New York State Cannabis Control Board in July gave the greenlight to more than 200 new retail licenses. At first glance, the planned expansion is positive news that has been eagerly anticipated by consumers and businesses alike who have been struggling with a limited marketplace that features only about 20 licensed adult-use cannabis dispensaries for the entire state of over 19 million people.

But taking a step back, this 0 to 100 approach may be jarring to the market at such an early stage. It also remains to be seen how soon, and how many of these new retail licensees will be able to secure storefronts, which must also be approved by the state. Therefore, a few key questions for cannabis producers, who need licensed stores to sell their products, arise: how can we make predictions relevant to our operations and output in an unpredictable market, and navigate the ebbs and flows of retail license issuances?

The average cannabis producer is likely not a soothsayer, but there are three key steps business owners and operators can take to manage the roller coaster ride that is retail in an emerging market like New York and maximize the potential for long-term success.

Outreach over Estimation:

It can be difficult to know how much cannabis to actually produce in the uncertain retail landscape of emerging markets. While attempting to predict demand and how to meet that demand may be a futile exercise without existing sales statistics, cannabis companies can take a proactive approach by initiating and maintaining weekly outreach to upcoming stores–in addition to current stores. Reach out to the new retail license holders to learn about their upcoming store’s region and demographics, the planned size of the store, and their retail sales goals. Then, use that information to set metrics with modest estimations of how many units of your brand that store may be able to move to categorize the store by potential revenue. While it’s impossible to predict with 100 percent accuracy, these estimated metrics can help manufacturers and brands avoid significant overproduction issues (which would be fiscally draining) each month or quarter.

Prioritize Relationships with Existing Stores:

While forecasting and monitoring planned dispensaries are important, one main item cannabis producers can control – and what they should focus the majority of their energy and time on – is relationships with existing dispensaries. Build relationships with dispensary owners and budtenders to ensure that they are both well-versed in your product and believe in your brand’s story, so they can communicate that trust and then cosign to consumers. Form that genuine connection through regular visits and facetime, follow-up, new marketing initiatives, improved displays, and generally making it clear that the dispensary owners, buyers, and budtenders are your allies and full-fledged partners, not just links in the chain between you and your customers.

Commercialize New Form Factors

Because emerging markets like New York can quickly evolve and change, cannabis producers shouldn’t rest on their laurels. Instead of putting all bets in one basket and just making one product, it may be beneficial to diversify and commercialize multiple form factors and consumption methods – within reason and being mindful of your team and facility’s capabilities. For instance, if you’re a producer with a facility extracting cannabis oils to make vape cartridges, try your hand at utilizing cannabis oil to develop edible products (even if that means partnering with a third party infusion partner). The point is, being able to produce and sell within different related categories and form factors, even at a small scale initially, will help you weather the short term squeeze of limited storefronts by increasing sales per store, and in the longer term to prepare you for when the market expands.

The cannabis industry in New York and beyond may be going in a lot of different directions, but over time the same patterns emerge in each new market, and the road doesn’t have to be as rocky. Cannabis producers can prepare themselves for whatever the retail market may hold through due diligence, relationship building, and diversifying within their means.