Since 2013, Denver-based Canna Advisors has guided entrepreneurs and startups entering the cannabis industry and cannabis companies looking to grow and expand their existing businesses. CEO Jay Czarkowski sees the northeast as the next hotbed for innovation and recently set up a second office in the Empire State Building. They’re kicking it off with a Shark Tank-style pitch deck competition, where the winner will receive a $50,000 to $500,000 investment. The competition takes place at the MJ Unpacked event in New York City this May. 

Jay Czarkowski
Jay Czarkowski, CEO Canna Advisors

Let’s meet Jay to get his take on the state of cannabis in the northeast. 

Congratulations on your office expansion from Denver to NYC in the Empire State Building.

Thank you, we just got the keys and access badges to our office this week. And we aim to do a fair amount of business here in New York State and the entire northeast.

Yes, it’s like dominoes up here in the northeast. I’m also based in New York City, and it’s exciting to be part of what’s happening here.

To kick off your new office location, you announced a Shark-Tank-style pitch deck competition that will take place at the MJ Unpacked event in May. The winner can receive up to a $500,000 investment partnership. Please tell us about it and the criteria to compete.

We’ve invited New York-based groups to apply, and we’re going to be looking hard at the $50,000 – $100,000 investment opportunities we’re offering. We’re also giving a $150,000 scholarship to Canna Advisors licensing services, which should cover this group’s license application pursuit. This is an investment opportunity for us and indeed an opportunity for a small startup in New York State to raise capital.

This exercise aims to find a mom-and-pop, social equity applicant, or undercapitalized group that doesn’t have political connections or business savvy. But they have a good plan, a good team, or maybe real estate and local contacts. We are looking for a group that could use some help in terms of capital and expertise.

Are you looking at legacy players? 

We are happy to look at legacy players. I’ve met some excellent salt-of-the-earth entrepreneurs from upstate New York. But I will say that we’re not interested in working with a group currently flaunting the law by opening storefronts before licenses are issued. I don’t believe that those groups long-term will be successful and will get shut down, and it will go against them when they try to get a license.

It makes sense that you wouldn’t want to be part of or support that kind of activity. Are you looking at all types of businesses? Cultivation? CPG? 

Yes, cultivation, manufacturing, dispensary, maybe a distribution play, and who else applies. We will do our due diligence and try to whittle that down to a small number and then have a live pitch event here in the city. 

The cannabis beverage industry is starting to pop. Are you seeing entrepreneurs in the New York market getting into this area?

I’ve seen beverages developed out of California and Colorado that have come a long way. Many of these beverage startups are starting to crack the nut on creating a low-dose beverage where you can enjoy an entire drink and not just have to take a couple of sips or end up too high.

I think the beverage industry will be big, especially the powdered kind used to concoct THC mocktails since most states do not allow liquor and cannabis under the same roof.

There have been many comparisons to the New York and California markets. You’ve worked with entrepreneurs and businesses all over the country. Do you see a comparison in how New York is launching? California is a bit of a mess in a couple of different ways. And the farmers are in big trouble and all that. 

This is my 13th year in cannabis and my 10th year working in multiple states and countries. And as a general rule, I don’t do business in California because it’s such a zoo. It’s been that way for generations, and I honestly believe it’s going to take decades for any stable market to develop there. 

I think the brands I see come out of California are not good. And I don’t think many of them will resonate with folks on the East Coast. Conversely, as I told you earlier, I’m pushing all my chips into the northeast.

I believe in this area’s financial and business acumen, brand development, and marketing expertise. I think the cannabis industry that develops here in New York and the Northeast will far surpass the current industry that exists in California.

I didn’t realize you also had a hand in global operations. Are you just starting to talk to entrepreneurs in other countries?

We’ve done some work in other countries such as Canada, the UK, Germany, and Australia. I’m part-owner of a cultivation facility in North Macedonia. New York City is an excellent opportunity for a brand to build global recognition because of the 66 million international tourists who visit it every year. Most of the world enters the United States through New York City. 

What areas of concern do you see in the laws rolling out for the licensing applications? 

Anytime you have a limited number of licenses available, it becomes competitive. You’re going to have those folks that win licenses and those that don’t. The folks that lose sometimes file lawsuits against the state for various reasons. Hopefully, those types of issues don’t slow up the program. 

We’re still waiting for draft regulations to come out in New York. But, we’re hearing 200 or so cultivation licenses will be issued, and maybe 500 or so dispensary licenses. We’re hearing there may be no limit on manufacturing licenses. So that’s potentially good. And then I guess there will be some micro-business licenses. 

How about real estate in the Northeast? Do you see that as a challenge?

The big limiting factor is always real estate; somebody has to go out to secure a piece of real estate, and more importantly, they have to make sure that they can secure local support. That’s great if you have an awesome retail location right across from the train station in Hoboken. Still, suppose the local municipality doesn’t want your business there. In that case, you’re not going to open, so securing real estate and ensuring local support is critical to any business.

I’m just curious to know your favorite business model license if you have one.

I’m a big fan of the dispensary. You know, cultivation licenses could be very exciting and very lucrative. But over time, cannabis is plant material and will become more of a commodity over time versus retail locations. Dispensaries are a guaranteed profit if you can build a decent store in a good location. I like retail.

And for the last question, how do you feel about interstate commerce? Do you think it will negatively or positively affect businesses once we open up the borders? 

I think interstate commerce has to happen. It’s ridiculous that a company in Colorado can’t do business in Massachusetts. They have to go to Massachusetts, hook up with a local manufacturing partner with a local license, and repeat state by state. States have different packaging and labeling requirements making expansion plans complicated and costly. Interstate commerce is something that will happen one day, and when it does happen, it will be a boon to certain businesses and a bust to others. 

It’s certainly not going to hurt the dispensary businesses. But, if it turns out that New York cultivation businesses have a higher cost of production than folks who have been doing it for generations in Humboldt County in Northern California, these New York growers might not be able to compete. 

Even if cannabis is legalized at the national level, nothing changes because each state would have to amend its laws to allow the import of cannabis from other states.

How can we grow as an industry if we’re all confined to our states? And what about the ones that are not as populated as California or New York? How are they expected to generate the revenue they need? 

The biggest challenge for these brands is to establish themselves as a national brand and household name. It’d be great to have one central manufacturing facility and focus on distribution and marketing to these other states for a more streamlined approach to growing.

Interview by Pam Chmiel.

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