A lot can change in 16 years.
In 2009, a drug conviction earned Coss Marte a seven-year prison sentence. This year, Marte hopes to make up to $12 million selling cannabis legally.
Marte, 39, is the founder and CEO of Conbud, one of the first fully licensed companies to sell recreational cannabis in Manhattan, and the first on the city’s Lower East Side. After opening its doors for the first time 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 total of about $7 million for 2024, he says.
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After receiving early release from prison in 2013, Marte launched a fitness business called Conbody, based on his workout regimen behind bars. Then, in 2021, New York legalized the sale of recreational cannabis and expunged all previous convictions for marijuana-related offenses.
A year later, the state announced that entrepreneurs with prior marijuana convictions would be eligible to receive the first licenses to sell recreational weed. Given his experience running Conbody and the state’s requirements for licensed retailers, Marte saw a golden business opportunity, he says.
“I was following this law, and what they required was two years of net profitable activity and a conviction on the criminal record,” Marte explains. “Now, how many people have that to qualify for a cannabis license? Not many.”
From prison training to several companies
Marte grew up on the Lower East Side, surrounded by an illicit drug trade that ensnared him at the age of 13, after seeing other teenagers make money that way, says- he.
“When I was a kid, people asked me, ‘What do you want to be when you grow up?’ And I would say, ‘I want to be rich,'” Marte says. “The first opportunity was in the drug world. So I started selling weed.”
In prison, doctors told Marte he was overweight and had dangerously high cholesterol levels. He began training intensely, using bodyweight exercises that he could do in his cell. Upon her release from prison, Marte partnered with Defy Ventures, a nonprofit program providing entrepreneurship training and business mentoring to formerly incarcerated people.
Coss Marte, founder and majority owner of Conbud, one of the first legal recreational cannabis dispensaries in New York.
Source: CNBC, Succeed
With a $10,000 grant from Defy, Marte launched Conbody — which now brings in 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 through Conbody and paid speaking engagements, he says — and raised nearly $1.2 million in additional seed funding from his friends and his family, who are now co-owners of the company.
Marte owns 51%, as New York State requires the “court-affected” licensee to maintain a controlling interest.
Conbud’s startup funds paid a $400,000 security deposit for the Lower East Side retail store, construction costs, payroll and inventory, Marte says. The business opened in October 2023 and generated about $250,000 in revenue per month – until authorities shut down hundreds of unlicensed operators selling cannabis illegally last year.
Aiming for growth in a highly competitive market
The crackdown in New York was a helpful development for licensed retailers like Marte, who face an uphill battle to gain a long-term foothold in the industry.
The state’s Office of Cannabis Management has praised its commitment to prioritizing “social and economic equity” while growing the legal cannabis market, but critics worry that small stores will eventually be crowded out by large companies with national reach.
Cure sheetfor example, is one of the largest dispensary owners in the United States with annual revenues greater than $1.3 billion. The company began adult sales in Queens, New York, in 2023.
This table details the monthly expenses of Marte’s business.
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Even the simple cost of doing business — especially rent and labor costs — is high, leaving Marte with a relatively slim profit margin of 13 percent, he says. If cannabis becomes federally legal, Marte could have access to federal tax deductions for wages and other business expenses, and expanded banking options with lower fees.
“So this 13% will be [eventually] achieve profit margins of 25%,” he says.
Conbud and Conbody almost exclusively hire workers who have been “justice impacted,” meaning they or a family member have been incarcerated for a prior drug conviction, Marte says. Collectively, it employs 72 people who meet these criteria.
Marte himself left prison with $40 and a bus ticket, only to “end up on my mom’s couch” trying to figure out how he could make a living with a drug conviction on his record, he says. he. Without his second chance, he probably never would have found himself in this position, he notes.
“It’s a really big community that’s growing with us,” Marte says. “I feel blessed, man.”
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