New York became the 15^th state in the U.S. to legalize recreational cannabis Wednesday with Gov. Andrew Cuomo's signature. 

The bill enables adult New York residents to own up to 3 ounces of cannabis or 24 grams of cannabis concentrates and to legally buy recreational cannabis from licensed retailers.

Cannabis Analyst On New York's Market’s Potential

In five to seven years, the New York recreational cannabis market could reach $7 billion in sales, Cantor Fitzgerald analyst Pablo Zuanic said in a Wednesday note, using the Colorado market as a benchmark.

“For modeling purposes, we assume NY rec starts 7/1/22, and project sales of $2.1Bn for the first 12 months between rec and med.”

A company with 15% of the market share could yield $110 million in EBITDA from New York alone by the time the sales reach $7 billion, the analyst said. 

Zuanic: MSO Lobby Stronger Than Assumed

The latest version of Bill S.854, the one that was signed by the governor, enables the vertically integrated licensed recreational operators to sell to third-party stores, Zuanic said.

The original version of the bill allowed the operators to sell only to three of their own stores, the analyst said. 

Noting this “last-minute change,” Zuanic said the multistate operator lobby is more powerful than assumed.

Out of seven publicly listed companies with existing operations in New York, the analyst highlighed Curaleaf Hldgs Inc. CURLF, Green Thumb GTBIF and Cresco Labs (Pink: CRLBF).

Once the list of medical conditions that qualify patients for medical cannabis and the list of allowed product formats are expended, the state medical cannabis program could “see more pronounced growth,” he said.

“Clearly the upside should be in the rec market,” the analyst concluded.