The travel agency on Fifth Avenue in New York City is an adult-use recreational marijuana dispensary.
Courtesy: The Travel Agency
Cannabis consumption has taken a turn – and now it has arrived on Fifth Avenue.
Those strolling along New York's famous shopping street can purchase jewelry from Cartier, new fashion from Saks, and pre-rolled marijuana joints grown in New York State from a new dispensary.
In the three and a half years since New York State legalized marijuana for recreational use, licensed cannabis sales have skyrocketed, surpassing $100 million last year. And now legal ways to consume cannabis are gaining traction in the luxury market as well.
While New York authorities crack down on hundreds of illegal businesses across the city, 166 licensed dispensaries across the state are open to buyers, including over 50 in New York City – and one directly across from Lululemon and Ted Baker.
The Travel Agency on Fifth Avenue is an adult-accessible marijuana dispensary with a white interior, glass display cases, plenty of budtenders, and lots of marijuana.
The retailer's exterior matches the chic storefronts of its neighbors and its sister stores in Union Square and Downtown Brooklyn. All three stores opened in the past year and a half, and founder Paul Yau said a fourth store will soon open in one of the city's other high-end shopping districts, SoHo.
The travel agency on Fifth Avenue in New York City is an adult-use recreational marijuana dispensary.
Courtesy: The Travel Agency
At The Travel Agency, Yau said the average purchase includes two products, mainly gummy bears, marijuana flower or pre-rolled joints, at an average price of $80 to $90 per ticket. Products range from THC sparkling water for $3.50 to flower selling for $150 an ounce, and accessories are sold at even higher prices.
New York City's first licensed dispensary, Housing Works Cannabis Co., sells products at similar prices, but a buyer there can spend even more, paying up to $240 for an ounce of marijuana. All proceeds from Housing Works Cannabis Co. benefit the nonprofit Housing Works of New York.
The travel agency's Union Square location donates 51% of its proceeds to the Doe Fund, which helps former inmates transition to life outside of prison. The Fifth Avenue and Brooklyn stores are run by owners who have previous cannabis-related criminal convictions.
While the upscale interiors attract long-standing and new customers, the ethical mission keeps customers coming back, Yau said. “It's huge and just has such an aura,” he added.
Reaching the “Canna-curious”
New York has always had what the industry calls “legacy” customers, people who used marijuana before it was legalized.
Now, with The Travel Agency's branches in high-traffic and high-volume areas, Yau says he's reaching the “canna-curious” with curated product offerings and architecturally inspired spaces to make it easier to enter the legal market.
The travel agency on Fifth Avenue in New York City is an adult-use recreational marijuana dispensary.
Courtesy: The Travel Agency
“The 40-year-old female shopper is a really strong demographic, and that demographic is just emerging in New York,” Yau said, adding that the stores were designed for this type of new shopper. “When people came into our store, they knew immediately that it was not an illegal store.”
One of those customers, Katie, a 37-year-old advertising executive from New York who asked not to give her last name, said the atmosphere and the competence of the staff keep her coming back. “It feels like a boutique,” she said.
THC soda maker Cann is also hoping to appeal to curious consumers, especially those who have had negative experiences with marijuana in the past. Both Yau and Cann founder Jake Bullock told CNBC that marketing is key to overcoming this headwind in attracting cannabis-curious consumers.
THC soda maker Cann sells a 12-pack of 8-ounce soda containing 2 milligrams of THC for $49.95.
Courtesy of Cann
“One reason we made these cans, small and pink and pastel, is because we want to convey accessibility to the consumer, as if they could drink the whole thing. Don't worry, it's only 2 milligrams,” Bullock said.
A 12-pack of 8-ounce Cann-Seltzer with 2 milligrams of THC costs $49.95. By comparison, a 12-pack of alcoholic White Claw Seltzer goes for well under $20.
The upscale marijuana experience is not limited to THC products.
Luxury interior designer Jonathan Adler sells marijuana home accessories like marijuana storage jars and bowls for nearly $300 a piece. Lifestyle brand Edie Parker sells everything from smoke-friendly handbags to rolling papers, giant colorful glass pipes and $450 table lighters. Much of it is available at boutiques and legal dispensaries like The Travel Agency and Housing Works Cannabis Co.
Actor Seth Rogen's lifestyle and decor brand Houseplant also targets the luxury cannabis consumer. Marbled rolling trays and ashtrays cost well over $200 and the company recently collaborated with luxury clothing retailer Kith.
The travel agency on Fifth Avenue in New York City is an adult-use recreational marijuana dispensary.
Courtesy: The Travel Agency
The collaborations are likely to continue. Yau said he believes dispensaries like The Travel Agency offer promising partnerships for fashion brands looking to capitalize on the “coolness” of the burgeoning cannabis industry.
Reaching luxury consumers where they are
THC soda maker Cann has its own high-end backers, including actress and lifestyle entrepreneur Gwyneth Paltrow and two-time NBA All-Star Baron Davis. The beverage maker is trying to reach consumers where they are willing to spend money.
At New York's Montauk Surf Lodge, where guests pay at least $3,000 for a night's stay, they can now purchase a hemp-derived version of Canns Seltzer alongside local rosé and premium spirits.
Cann co-founder Jake Bullock said his brand's target audience is a premium consumer, largely millennials, and its competition is alcohol. Bullock and his co-founder Luke Anderson see the partnership with Surf Lodge as an ideal way to get into that audience – via the wealthy Hamptons residents who already indulge and spend big.
THC soda maker Cann sells a 12-pack of 8-ounce soda containing 2 milligrams of THC for $49.95.
Courtesy of Cann
“It’s a very classic customer and Luke and I thought the brand would fit into their lives,” he said.
Yau, who spoke to CNBC while working near the Hamptons, is also aware of this target audience. “We believe we are still in the first inning of cannabis legalization in New York,” he said.
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