Housing Works’ retail manager says the company has been operating in the black since opening its doors.
Housing Works, the first legal adult-use marijuana shop to open for business in New York, announced Monday that it sold $12 million in cannabis in its first six months of operations. It opened its doors just two days before New Year’s Eve.
The nonprofit retailer – which devotes all of its proceeds to helping underprivileged members of the community – has managed to average about $2 million a month, said Sasha Nutgent, Housing Works’ retail manager. Nutgent said that’s in line with sales projections the business had drawn up last year, and that sales even slightly “exceeded” internal expectations despite a “lull” over the July 4 holiday.
She predicted that cannabis will follow traditional retail patterns, meaning sales should begin to increase again in September.
“We definitely anticipated this amount of revenue,” Nutgent said, but added that from what she’s heard through the cannabis grapevine, other legal shops aren’t faring quite as well.
“I think we are leading the pack right now,” she said. “I think that the rollout for other dispensaries has been a little bit more difficult than it has been for us.”
Housing Works has been getting up to a thousand unique customers per day, according to a press release, and Nutgent said the supply chain has smoothed out to the point that her store now carries roughly 500 cannabis products from about 30 brands.
And the inventory numbers, she said, will grow as the retailer continues to diversify the brands and products.
“Initially … we weren’t able to get the product that we needed in the time that we needed due to the lab taking forever to process,” Nutgent said. “Now, just getting a diverse group of brands in our store has been our most challenging issue. … When we opened, we definitely saw ourselves having mainly BIPOC, women of color, Black-owned brands. But that’s been slow to start due to a lot of them not having the proper funding.”
Nutgent said Housing Works did recently onboard a few such minority-owned brands, including Brelixi, Fat Nell, The Weekenders, Flamer, and Drew Martin.
She also reported surprisingly little competition from the unregulated market, which has proliferated to an estimated 1,500 unlicensed sellers in New York City alone. She posited that the lack of competition may be due to the state Office of Cannabis Management having shuttered some of the unlicensed smoke shops that were operating within a few blocks of Housing Works.
But she also noted that the market has been able to lower its prices to be more competitive with street dealers.
Housing Works, Nutgent said, now has varying tiers of cannabis goods, with eighths of flower ranging in price from $55 at the high end to $30 at the lower end, along with $9 pre-rolled joints. Unlicensed prices in New York City have been seen at around $10 per pre-roll and can run $35-$55 for an eighth of flower, which last year had some observers worried about the viability of legal, taxed cannabis products.
“Initially, when we started, everybody was right around the $55 an eighth range. And now it’s kind of leveled out,” Nutgent said.
Deliveries to customers in Manhattan, Brooklyn, and Queens now account for about 15% of Housing Works’ sales, and pickup orders placed online are another 5%-7%. But the majority still comes from walk-ins and foot traffic.
THC potency continues to drive sales as well, Housing Works reported in its sales release, which Nutgent said has made the retailer cautious about stocking any marijuana flower that tests below 20% THC.
“If we get the (testing lab results) back and it’s under 20% (THC), we might just order like a handful because we know it’s going to be slow to move,” Nutgent said.
Customer education is an ongoing process for the entire industry, she said, adding that the focus on THC is a reflection of consumer ignorance of how cannabis terpenes and the entourage effect work, and how marijuana strains can affect each consumer differently.
Housing Works has not yet finished construction on its lower Manhattan storefront, and also hasn’t chosen sites for the other two shops it’s allowed to open under state law. But the second and third locations are being scouted, Nutgent said.
The sales numbers have kept Housing Works in the black since its December launch, which may give other incoming entrepreneurs hope that they too can succeed in one of the hottest marijuana markets in the nation.
“We’ve been profitable since Day One, because we … took the risk of not having some grandiose buildout. And that risk was beneficial to us,” Nutgent said. (Full Story)