Less Than 50% Of New York Retailers Are Profitable
A new FTI Consulting survey commissioned by the Safe and Affordable Cannabis for New York Association found an average industry wage of $25.87 per hour, roughly 19% higher than comparable occupations statewide. Retail workers averaged $25.55 versus $20.47 for New York retail workers generally.
But the other side of the dataset is more interesting: 57% of responding operators reported a net loss, only 36% reported being profitable, and 57% had the same number or fewer employees than a year earlier. Among unprofitable respondents, 79% had been losing money for an average of 15 months.
The survey covered more than 40 licensees employing over 1,400 workers. More than 90% of respondents were independently owned and more than 60% were retailers. Because it was commissioned by an industry coalition opposing proposed wage-board legislation, the findings should be read with that sponsorship in mind.
The numbers were released as Gov. Kathy Hochul considers legislation creating a three-member industry wage board with authority to recommend minimum wages and compel certain company records.
Interestingly, two architects of New York’s 2021 legalization law—Assembly Majority Leader Crystal Peoples-Stokes and Sen. Liz Krueger—voted against the wage-board legislation.
There’s also a separate federal lawsuit challenging New York’s mandatory labor-peace agreements, including requirements affecting union organizing and employee information.
Ignore the politics for a minute and the operating data tells an uncomfortable story:
$25.87 average wages.
57% reporting losses.
36% profitable.
That doesn’t automatically mean wages are causing the losses. Taxes, rents, wholesale compression, debt, licensing delays and competition from unlicensed sellers all matter.
But it does show how strange mature regulated markets have become. Revenue can grow while the underlying businesses remain economically fragile.
For anyone evaluating operators, sales alone are becoming a lousy measure of market health.
