Jenny Argie held court at her booth at the MJ Unpacked conference in Manhattan Thursday afternoon, where display cases filled with pre-rolls, edibles and weed-infused beverages produced an aura of a business casual Candy Land for stoners.
The CEO and founder of Brooklyn-based CBD edibles company Jenny’s Baked at Home, Argie said she’d been talking that day to prospective brand partners looking to enter New York’s adult-use market. Jenny’s Baked at Home is in line for one of the conditional processing licenses that the Office of Cannabis Management announced in February, and is getting ready to hit the ground running.
“I would like to have relationships with brands that want to white label, dispensaries that are looking to white label, proprietary techniques,” Argie said. (White labeling is an agreement in which Company A sells products made by Company B under Company A’s brand label.)
Hundreds of marijuana brands, cultivators, processors, ancillary businesses and investors milled around the Midtown Hilton Thursday, promoting their wares, and looking to make the right connections to make a splash in what will be one of the world’s largest legal marijuana markets.
The various different types of businesses mingling at the conference provided a glimpse into the mix of cooperation and tension ahead, as companies get ready to set up shop in the Empire State.
Kate Miller, CEO of California-based flower and preroll brand Miss Grass, is also seeking out partners. The 11-person company operates on a white label model, in which it partners with cultivators and sells their weed under the Miss Grass brand. Miss Grass operates in four states, and has partnered with a mix of multistate operators and smaller companies for supply, Miller said.
Miss Grass is already having early stage conversations with hemp farmers who received conditional cultivation licenses, Miller said. The most important factor of choosing business partners is that they’re good people, she said, but also high on her priority list is the ability to produce at scale.
Miller wants to “make sure that who we partner with in New York has the biomass,” she said. “I think what’s going to be the biggest problem in the near-term in New York is there’s going to be very limited-quality biomass.”
The ability to produce at volume is the main thing Los Angeles-based S10 Labs is seeking in a partner, said account executive Juansi Santaella. The company makes vape pens and partners with companies who fill them with distillate or live resin.
Right now S10′s only New York partner operates on the state’s legacy market, Santaella said. But he was hoping to find larger players poised to serve the legal adult-use market once it launches.
“We’re looking for people who are down to pick up hundreds of thousands of cartridges … maybe millions,” Santaella said.
Andrew Kaye, an investor and chief commercial officer for Denver-based venture debt firm Sweet Leaf Madison Capital, said he’s more interested in engaging with small- to medium-sized companies. Craft cannabis brands, Kaye said, have more pricing stability. That’s because if a market becomes flooded with supply – driving prices down – people will generally continue paying a higher price for products from brands that sell high-quality weed.
Unlike many people who believe retail will be New York’s strength, Kaye thinks the state missed the boat. In Kaye’s opinion, New York regulators took too long to stand up a recreational marijuana program after legalizing, and the legacy market is now too strong to beat.
“I think New York already blew it, and lost the retail battle,” Kaye said. “New York lost by delay.”
But Kaye does see a lot of opportunity for New York to lead in the social consumption lounge sector, and sees some promise in cultivation and processing here.
Even as the event buzzed with the button-down excitement of an industry conference, Argie, CEO of Jenny’s Baked at Home, said she didn’t expect all meetings to be pleasant. She’s already been approached by multiple large cannabis companies looking to buy her out, rather than a partner.
“I’ve had a lot of that to this point: trying to get me to sell out, trying to bottom-line me, intimidate me,” Argie said. “They’re looking at the vulnerable, and I can already tell they’re coming in trying to swoop in … let’s see if New Yorkers can stay united and not sell out too fast.”