Just a few weeks after New York State passed legislation legalizing the recreational use of marijuana, the big money has arrived on the North Fork to begin investing in a whole new crop.
If anyone here thought legalization would mean our local farmers could raise marijuana plants alongside their corn and tomatoes, and that somehow the legislation would benefit area growers in need of a cash crop, the news that a publicly traded cannabis company has bought greenhouses on Sound Avenue in Riverhead has dashed that hope.
We are now living in post-legalization New York. In one fell swoop, the landscape here has changed, literally and figuratively, with the news that Columbia Care has paid a whopping $42 million for a 34-acre site on Sound Avenue that was the Van de Wetering greenhouses.
That breaks down to something like $1.2 million per acre – this in an area where farmland might normally sell for, say, $100,000 an acre. This transaction has changed everything — from what farmland can be used for in the future to how it will be valued and which other large scale, big-money operations will have the capital to start their own marijuana operations.
The firm’s confidence that their investment will succeed is clear — and well founded, as the infrastructure needed for large-scale cultivation is already in place. The deal includes 740,000 square feet of greenhouses, along with an additional 200,000 square feet for possible expansion.
The site is essentially walk-in ready and, as our story says, Columbia Care plans to harvest its very first crop in Riverhead before the end of the year, pending licensing from New York State.
All towns and villages in Suffolk County are involved in discussions on whether to opt out of the state law. Riverhead and Southold have very limited wiggle room with the law: They could stop lounges from being set up, yes, but cannot prevent individuals from growing, possessing or using marijuana. That ship has sailed.
With Columbia Care’s arrival, the way North Fork real estate is viewed is certain to change. Yes, tourists will still come out to buy pumpkins and Christmas trees and visit the wineries. But why would a landowner want to sell the family farm for, say, affordable housing or to a vineyard operator if a hedge fund will buy it for a sky-high price to grow marijuana?
Beyond that, how many large-scale marijuana operations could the area sustain, based on market projections and the multi-million-dollar costs of licensing? In the announcement, Columbia Care says the market could be as high as $5 billion in just a few years. In a market-driven economy, this surely means more big companies will come.
It seems certain now, that only entities with the deepest pockets will be buying land, purchasing the licenses and building the infrastructure required to raise marijuana on a large scale. Just what the ripple effects of this will be for the North Fork won’t be known for years.
Historic land that was once produced thousands of acres of potatoes and cauliflower, that gave way to a booming wine industry, could now become famous for a very different cash crop.