Western Massachusetts’ marijuana business is booming and New York is to thank

LEE, Mass. — At Canna Provisions, Massachusetts’ newest legal marijuana shop a few hundred yards off Interstate 90, customers can pick from cannabis strains with names like Sour Diesel, Blueberry Headband and Death Star.

The new store, however, owes much of its early success to Empire Gold — not a marijuana product, but the official color of New York license plates that regularly fill its parking lot.

Marijuana shops in western Massachusetts have seen their sales driven in large part by New York residents unable to legally purchase the drug in their home state or those who take it medicinally but find cheaper prices across the border.

About 60% of Canna Provisions customers hailed from New York in the first four days after the store opened July 5, according to Meg Sanders, the company’s CEO and co-founder.

At Theory Wellness, another marijuana shop in nearby Great Barrington, about half its customers come from the Empire State, according to CEO Brandon Pollock. 

It’s the latest evidence that New York residents have provided a major, sustaining boost to legal marijuana in western Massachusetts, where Canna Provisions and Theory are among three shops located less than 15 miles from the state border.

And with New York lawmakers unable to reach consensus on legalizing recreational marijuana in their own state, that trend is sure to continue well into next year and perhaps beyond.

“It’s a great thing for our business, of course,” Sanders said in an interview outside her store. “Absolutely. It’s good for everyone in Massachusetts, actually.”

More: Recreational pot a beacon for New Yorkers flocking to Massachusetts

Out-of-state competition spurs change

Competition from New York’s neighbors was one of the major issues that spurred New York Gov. Andrew Cuomo, a Democrat, to change his position on recreational marijuana last year, shifting from the state’s most powerful opponent to a cautious supporter last year.

After Massachusetts, Canada and Vermont legalized marijuana in some form, Cuomo ordered a state study that analyzed the impact it could have on New York.

“If it was legalized in Jersey and it was legal in Massachusetts and the federal government allowed it to go ahead, what would that do to New York?” Cuomo said as he ordered a state study in January 2018. “Because it’s right in the middle.”

Six months later, the Department of Health finished the report.

Among its conclusions: New Yorkers would travel to neighboring states to get marijuana if their home state didn’t legalize it. And New York would lose out on the tax revenue.

“If marijuana is not legalized, the cross-border effects in NYS are likely to be substantial, involving numerous counties and municipalities,” the state Department of Health wrote in its July 2018 report. “Legalization in neighboring jurisdictions raises the likelihood of revenue flowing from New York into those jurisdictions.”

New York plates flock Massachusetts marijuana shops

The scene at Theory and Canna Provisions seems to prove the report right.

On a recent Tuesday afternoon, more than a dozen cars with New York license plates were parked outside Theory. About 20 people stood in line waiting to buy their products inside the building nestled between a tire shop and a McDonald’s.

Earlier in the day, three of the eight cars parked at Canna Provisions had New York plates. Two Lee police officers stood near the street directing traffic as employees greeted customers as they approached the line.

“I’ve been out myself counting license plates, and it’s true — at any given moment, there is a large percentage from New York,” Sanders, the store’s CEO, said. 

The tax revenue collected from Massachusetts marijuana has been significant, though perhaps not budget-altering on the state level.

Since legal marijuana sales began in November 2018, Massachusetts’ 22 dispensaries have reported $176 million in gross sales, according to the state’s Cannabis Control Commission.

Those sales are subject to 17% state tax and up-to-3% local tax. 

It’s a much bigger deal at the local level.

In Great Barrington, Theory’s gross sales have been about $17.3 million since the start of the year, according to the Berkshire Edge, a news website.

The town charges the 3% local sales tax and collects another 3% as a “community impact fee,” which was negotiated prior to its opening.

That means Great Barrington’s take has been about $1 million so far in 2019, according to the Edge. The town’s proposed operating and capital budget is about $20 million for the entire coming fiscal year, not counting school costs.

Tracking New York customers

Under Massachusetts law, marijuana buyers have to show ID to purchase any product, which easily gives the shops the ability to internally track where their customers are coming from. Sales for anyone over age 21.

Brandon Pollock, the Theory CEO and a native of Brewster, Putnam County, in New York, said the strong New York presence — about half of its customers — came as a surprise.

Prior to offering recreational marijuana late last year, Theory had sold the drug for medicinal purposes, which limited its customer base to Massachusetts residents only.

When they opened their doors to recreational users, New Yorkers came in droves, making up much of the line that often stretches out Theory’s door and around the nearby sidewalk.

“It was a bit of a surprise,” Pollock said. “But to be honest, with cannabis, it’s very hard to predict the future. It’s brand new territory all around.”

Canna Provisions, whose co-founders Meg Sanders and Erik Williams had previously opened up shops in Colorado, has actively targeted New York customers, paying for an electronic billboard at one of Albany’s busiest highway interchanges and advertisements in local media.

The Lee store, which is near a major outlet mall, opened July 5, months after the other two Berkshires marijuana shops, the third of which is in Pittsfield. By then, Canna Provisions had seen the high number of New York license plates that frequented the other stores.

The billboard is located along Interstate 90 in downtown Albany, about 50 minutes away from the shop in Lee that runs directly into the Massachusetts Turnpike.

“Like most border communities, there’s a lot of crossing back and forth,” Williams said. 

“So there’s a lot of people who live and/or work in both places. So the Albany advertisings aren’t just for people who live there, but for people who live here and work in Albany, which is a very common thing as well.”

More: New York marijuana: What to know about decriminalization, criminal records, pot possession

More: Watch: Monroe County Executive Cheryl Dinolfo on whether she supports legalizing marijuana

Still illegal to bring across state lines

While New York residents are legally able to purchase marijuana at the Massachusetts shops, it remains illegal to bring the drug back across state lines — though the potential penalties are about to go down.

In June, New York lawmakers weren’t able to reach a deal on legalizing marijuana for recreational use. They won’t return to the Capitol until January.

Instead, they further decriminalized the drug, making possession of less than an ounce punishable by no more than a $50 fine. For possession of between one ounce and two ounces, the penalty is up to $200.

The new fines will take effect once Cuomo officially signs the bill, which hasn’t been formally delivered to him yet. He has pledged support for it.

While the penalties are lower than what they were, possession remains against the law in New York — which is why several state residents weren’t willing to speak with a reporter who visited Canna Provisions and Theory on July 9.

“No, thanks,” one woman said as she got in her sedan with New York plates. “I’m not looking to get busted here.”

Williams said his employees are trained to inform shoppers about the state laws if they mention they plan to take the product over state borders.

If the shopper insists on telling the employee they plan on breaking the law, the employee is instructed not to sell to that person, Williams said.

“But otherwise, we are completely following all the other Massachusetts state laws and that is if you are an adult over 21 years of age and have a valid ID, then you are able to come in and purchase,” he said. 

“Once you leave those doors or leave our property, the only thing we can do is educate persons as to what the laws are in the commonwealth of Massachusetts.”

Canna Provisions didn’t pick its location near the border only for its proximity to New York customers — though it didn’t hurt, Sanders said.

Berkshire County is home to more than 125,000 residents and many more who spend their summers or vacation there, leaving a substantial customer base if New York does ultimately legalize the drug.

“New York will legalize eventually, so we’re not building a business just on that,” Sanders said. “But it’s a nice added feature, for sure.”

JCAMPBELL1@gannett.com

More: Legalizing marijuana in New York won’t happen in final days of legislative session

More: Why legalizing marijuana in New York failed, but decriminalizing it passed

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