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Many things can change in 16 years.
In 2009, a drug conviction earned Coss Marte a seven-year prison sentence. This year, Marte hopes to raise up to $12 million by selling cannabis legally.
Marte, 39, is the founder and CEO of Conbud, one of the first companies fully licensed to sell recreational cannabis in Manhattan and the first in the city’s Lower East Side. After opening its doors for the first time in October 2023Conbud added a second location in the Bronx last April.
Marte’s business currently generates about $800,000 in sales per month, including nearly $100,000 in profits, according to documents reviewed by CNBC Make It. Marte projects a final figure of about $7 million by 2024, it says.
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After being granted early release from prison in 2013, Marte launched a fitness business called Conbody, based on his exercise regimen behind bars. Then in 2021, New York legalized the sale of recreational cannabis and expunged all prior convictions for marijuana-related offenses.
A year later, the state announced that business owners with prior marijuana convictions would be eligible to receive the first licenses to sell recreational marijuana. Given his experience managing Conbody and the requirements set by the state for retail licensees, Marte saw a golden business opportunity, he says.
“I was following this law, and what they demanded was two years of net profitable business and a conviction on his record,” says Marte. “Now, how many people have that to qualify for a cannabis license? Not many.”
From prison training to multiple businesses
Marte grew up on the Lower East Side, surrounded by an illicit drug trade that caught him up at age 13 after watching other teenagers make money that way, he says.
“When I was a kid, people asked me, ‘What do you want to be when you grow up?’ And I said: ‘I want to be rich,'” says Marte. “The first opportunity was through the world of drugs. So I started dealing marijuana.”
In prison, doctors told Marte that he was overweight and had dangerously high cholesterol. He began working out intensely, using bodyweight exercises he could do in his cell. Upon release from prison, Marte connected with Defy Ventures, a nonprofit program that provides business training and business mentoring to formerly incarcerated individuals.
Coss Marte, founder and majority owner of Conbud, one of the first legal recreational cannabis dispensaries in New York City.
Source: CNBC Do It
With a $10,000 grant from Defy, Marte launched Conbody, which now generates about $1 million in annual revenue, he says, in 2014.
Eight years later, Marte paid $2,000 to apply for a cannabis retail license. He invested about $50,000 of his own savings into Conbud, mostly from Conbody and paid speaking engagements, he says, and raised nearly $1.2 million in additional seed funding from friends and family, who are now co-owners of the business.
Marte owns 51%, as New York requires the “justice struck” licensee to retain majority ownership.
Conbud’s initial funds paid for a $400,000 security deposit on the Lower East Side retail store, construction costs, payroll and inventory, Marte says. The company opened its doors in October 2023 and generated approximately $250,000 in revenue per month, until authorities Shut down hundreds of unlicensed operators selling cannabis illegally last year.
Looking at growth in a highly competitive market
New York’s crackdown was a useful development for licensed retailers like Marte, which face an uphill battle to establish long-term footholds in the industry.
The state’s Office of Cannabis Management has promoted its commitment to prioritizing “social and economic equity” while growing the legal cannabis market, but critics worry that smaller stores will eventually be displaced by larger corporations with national reach.
CuraleafFor example, it is one of the largest dispensary owners in the US with Annual revenues exceeding $1.3 billion.. The company began adult-use sales in Queens, New York, in 2023.
This chart breaks down the monthly expenses of Mars’ business.
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Even the simple cost of doing business – particularly rent and labor costs – is high, leaving Marte with a relatively small 13% profit margin, he says. If cannabis were legalized at the federal level, Marte would be able to access federal tax deductions for payroll and other business expenses, and expanded banking options with lower rates.
“Then that 13% will (eventually) grow to a 25% profit margin,” he says.
Both Conbud and Conbody almost exclusively hire workers who have been “justice-affected,” meaning they or a family member was incarcerated for a previous drug conviction, Marte says. Altogether, it employs 72 people who meet that criteria.
Marte himself walked out of prison with $40 and a bus ticket, only to “end up on my mom’s couch” while trying to figure out how he could make a living with a drug conviction on his record, he says. Without his second chance, he probably never would have found himself in this position, he notes.
“It’s a very, very large community that is growing with us,” says Marte. “I feel blessed, man.”
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