Curaleaf said its wholesale business has been hurt by illegally-sourced cannabis in New York. Now it’s starting to see improvements, but the company still wants more done.
CEO Boris Jordan, speaking with analysts Thursday, said his company’s revenues in New York from the fourth quarter through February 2025 dropped by nearly 50% due to what he called “inversion.” He explained that illicit cannabis from California and other markets has been finding its way into New York due to the state’s lack of a seed-to-sale tracking system. He said the inversion definitely affected growers in New York.
“[New York’s Office of Cannabis Management] did clamp down on one of those organizations that is doing that, and we’re seeing a little bit of hesitancy from the retailers in taking on any more of this product. And so we are seeing a recovery in our wholesale sales in New York ever since the action of the OCM. If that continues, then I would say that the growth trajectory in New York is still very, very great,” he said.
The OCM has been investigating a cannabis processor in Long Island. According to the New York Times, the agency suspects cannabis companies including Stiiizy have been “laundering” weed from other markets through the business, which was raided by OCM inspectors last month.
While the enforcement is a positive sign, Jordan said track-and-trace is a better long-term answer to a problem that harms licensed operators, local farmers and consumers.
“A straightforward solution exists: the implementation of a long-overdue track-and-trace system, which the OCM was mandated to establish two years ago,” he said. “We continue to advocate for this regulatory action to help ensure a level playing field and to protect the integrity of the New York market.”
In November last year, the OCM announced the implementation of the seed-to-sale tracking system and even offered to cover up to $250,000 in inventory tag purchases to assist cultivators, processors and micro-businesses with compliance. But as MJBizDaily pointed out, deadlines have since passed for companies to meet integration requirements, and that full implementation may not happen until later this year.
The ongoing struggles in New York paired with macro-level cannabis price compression seems to have impacted Curaleaf. The company reported first-quarter revenue of $310 million, down 9% year-over-year. The company’s net loss attributable to Curaleaf Holdings, Inc. from continuing operations was $54.8 million, up from $51.6 million from Q1 2024.
