Cannabis industry targets luxury consumers in New York
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Cannabis retail has reached a new milestone, now making its presence felt on Fifth Avenue.
As pedestrians stroll along this renowned New York shopping destination, they can explore luxury brands like Cartier and Saks, alongside a new dispensary offering pre-rolled marijuana joints cultivated in New York state. Since the legalization of adult-use cannabis in New York three and a half years ago, licensed sales have surged, exceeding $100 million last year. The luxury sector is increasingly embracing legal cannabis consumption.
In response to the proliferation of unlicensed shops in the city, New York has opened 166 licensed dispensaries statewide, with over 50 located in New York City, including one situated directly across from Lululemon and Ted Baker. The Travel Agency, an adult-use recreational marijuana shop on Fifth Avenue, features sleek white interiors, glass displays, knowledgeable staff, and a wide array of cannabis products.
The Travel Agency's aesthetic aligns with the upscale storefronts of its neighboring retailers, as well as its sister locations in Union Square and Downtown Brooklyn. All three outlets launched within the past 18 months, and founder Paul Yau has plans for a fourth location in SoHo, another affluent shopping area.
At The Travel Agency, customers typically purchase two items, primarily gummies, marijuana flower, or pre-rolls, with average spending ranging from $80 to $90. Product prices vary, with THC-infused seltzers starting at $3.50 and flower priced at $150 per ounce, while accessories can command even higher prices. Housing Works Cannabis Co., the city's first licensed dispensary, offers similar pricing, with some customers spending up to $240 for an ounce of marijuana. Notably, all profits from Housing Works Cannabis Co. support its nonprofit mission in New York City.
The Travel Agency's Union Square branch donates 51% of its earnings to the Doe Fund, which aids formerly incarcerated individuals in their reintegration into society. The Fifth Avenue and Brooklyn locations are operated by owners with past experiences in the cannabis justice system.
While the sophisticated ambiance attracts both legacy and new customers, Yau emphasizes that the ethical mission fosters customer loyalty. "It's significant; it creates a positive impression," he remarked.
New York has long had a "legacy" customer base—those who used cannabis prior to its legalization. With The Travel Agency's locations in bustling, affluent areas, Yau aims to engage the "canna-curious" demographic through thoughtfully curated products and an inviting, architecturally appealing environment.
"The demographic of 40-year-old women is particularly strong and is just beginning to emerge in New York," Yau noted, explaining that the store designs cater to this new clientele. "When people enter our store, they immediately recognize it’s not an illicit operation."
One such customer, Katie, a 37-year-old advertising executive who preferred to remain anonymous, expressed that the store's atmosphere and staff expertise keep her returning. "It feels like a boutique," she shared.
Cann, a THC seltzer brand, is also targeting curious consumers, especially those with previous negative experiences with cannabis. Both Yau and Cann's founder, Jake Bullock, highlighted the importance of marketing in attracting the canna-curious demographic.
"We designed our cans to be small, pink, and pastel to convey approachability, encouraging consumers to enjoy the entire drink without worry, as it contains just 2 milligrams," Bullock explained. A 12-pack of Cann seltzers, each containing 2 milligrams of THC, retails for $49.95, while a comparable 12-pack of alcoholic seltzers is priced significantly lower.
The upscale cannabis experience extends beyond THC products. Luxury designer Jonathan Adler offers marijuana-themed home decor items, such as storage canisters and bowls, priced around $300 each. Lifestyle brand Edie Parker features a range of products, from stylish handbags for smokers to colorful glass pipes and $450 table lighters, available at boutiques and legal dispensaries like The Travel Agency and Housing Works Cannabis Co.
Actor Seth Rogen's lifestyle brand, Houseplant, also caters to the luxury cannabis market, with marble rolling trays and ashtrays priced well over $200, and a recent collaboration with high-end retailer Kith.
Such collaborations are expected to continue. Yau believes that dispensaries like The Travel Agency present exciting opportunities for fashion brands looking to tap into the allure of the growing cannabis industry.
Cann has high-profile backers, including actress and entrepreneur Gwyneth Paltrow and former NBA star Baron Davis. The brand aims to connect with consumers willing to spend on premium products.
At the Montauk Surf Lodge in New York, where guests can spend a minimum of $3,000 for a table for one night, Cann's hemp-derived seltzers are now available alongside local rosé and premium spirits. Bullock stated that Cann's target market consists of affluent millennials, viewing the Surf Lodge partnership as an ideal way to introduce the brand to a wealthy clientele already accustomed to indulgence.
"We envision our brand fitting seamlessly into the lives of this classic customer," he said.
Yau, who spoke while working remotely near the Hamptons, shares this vision. "We believe we are still in the early stages of New York's legal cannabis market."
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