New laws allow recreational cannabis sales in more than 20 states, but marijuana remains illegal at the federal level, which makes starting a retail business in the industry difficult. This is Part 1 of a series.

If you’re opening a cannabis retail store, you might as well do it on 420.

Like Gotham.

“We’re trying to change the narrative around cannabis,” Joanne Wilson, Gotham’s founder and an angel investor whose portfolio includes Parachute Home and The Curbed Network, told us. “We’re the next generation of what we believe cannabis stores are going to look like.”

Located in Manhattan’s East Village, it will be a “concept store” that will radiate “edgy” meets “luxury,” Wilson said, citing trendy stores that commingled streetwear, fashion, and accessories as influences, such as Supreme stores and the Parisian boutique Colette, much mourned when it closed in 2017.

Gotham is expected to be the fourth licensed store to open in Manhattan under a 2021 state law that permits cannabis—previously legal only for medical purposes—to be sold for recreational consumption. And while Wilson has, in every sense, high hopes for the venture, the road ahead won’t be all giggles and munchies.

Budding business: Gotham expects about 15% of revenues to be non-cannabis, including CBD products (which don’t have THC), accoutrements like bongs and ashtrays, and lifestyle products that may not at first blush seem cannabis-related.

If what brings you to the store for a pre-rolled joint or edible is that they help you sleep, for instance, “you can also buy a candle and a blanket” and a sleep mask, Wilson said. “You can access our music lists that are great for sleeping.” And if it’s your anxious, barking schnauzer that’s keeping you awake? “You can also purchase some CBD products for your dog.”

Keep reading here.—AAN

Magnolia Bakery, the iconic New York City-based bakery beloved by Carrie Bradshaw and the guys from “Lazy Sunday,” is heading to the grocery store.

It’s debuting its first CPG products—Classic Vanilla, Chocolate Chunk, and Confetti flavors of Banana Pudding Cookies—hitting Harris Teeter, The Fresh Market, DoorDash’s DashMart, and Amazon this month. They’re sold in four-packs of cookies for an MSRP of $7.99.

The move has been “a long time coming,” Magnolia Bakery CMO Eddie Revis told us, in the works for nearly two years. It was part of the impetus for its rebrand last year, with Magnolia asking itself how the redesign would look on store shelves.

• The brand also conducted a study that found that 70% of participants preferred the brand launch its items into grocery rather than opening new bakeries nearby. Plus, the fact that bakery peers Levain and Milk Bar have also made CPG pushes has been “encouraging,” Revis said.

Magnolia landed on banana pudding cookies, rather than the fan-favorite pudding itself, because IRI data revealed the cookie category, particularly the soft-baked category, was up, Revis said. Magnolia’s Banana Pudding Cookie debuted in bakeries last year, and after three months, it accounted for seven out of 10 DTC orders, he noted.

• Magnolia hopes its premium ingredients—including “real butter” and “real bananas”—and individually wrapped packaging will help differentiate it from other cookie offerings, Revis said.

“We have to look through the lens of what does the category look like, and what categories are growing in a grocery store, what categories are ripe for disruption,” he said.

Keep reading here.—EC

“Thesaurus.com was probably the star of yesterday’s Supreme Court oral arguments, in which attorneys for Jack Daniel’s had to use every synonym for ‘dog poop’ they could find. The whiskey brand argued that the dog toy company VIP Products violated its trademark with a crude squeaky toy that mimicked its iconic product,” writes Morning Brew’s Matty Merritt:

Whether the high court sides with the toymaker or says the company really stepped in it, the decision could redefine how far federal trademark protections reach when humor is involved.

Read the whole story here on Morning Brew.

Today’s top retail reads.

Ruh roh: Inflation hits hard for the average American, but it’s a whole other ballgame for pet owners, who are facing some hard decisions as pet care remains prohibitively expensive. (CNN)

Drip or drown: Inditex’s 2022 fiscal year was one of the strongest in apparel, thanks in part to the success of Zara, which only has around 100 stores in the United States. The company is eyeing expansion opportunities that could take it to the next level. (Forbes)

New flex: Fabletics CMO Ilona Aman got her start at the company in September, but in that short time, she’s helped with the brand’s expansion into selling scrubs, moving beyond activewear. “One of the most important things on our roadmap right now is retail transformation,” Aman said. (Glossy)

Looking for more? Check out our latest article: Why a seamless supply chain is integral to fashion week, sponsored by Flowspace.*

^{*This is sponsored advertising content.}

As retailers are facing increased pressure to lower their carbon footprint, property owners are investing more in what are referred to as “green leases,” in which landlords and tenants agree upon delivering ESG goals, according to a report from JLL.

The US market could recoup up to $3.3 billion in annual cost savings if every leased office building implemented green leases, according to an estimate from the Institute for Market Transformation.

• There’s 1.2 billion square feet of office space and 2.5 billion square feet of industrial space with leases expiring before 2030.
• 42% of investors and 34% of tenants have already implemented green clauses.
• Implementation is expected to double with 37% of investors and 40% of tenants planning to enact green clauses by 2025.

“Amid the current energy crisis and with increased pressure to meet sustainability goals, collaboration between the owner and occupier at an asset level to incorporate energy efficient solutions is critical,” Guy Grainger, JLL global head of sustainability services and ESG, said in a statement. “Existing leases, both green and non-green, do not allow this and a new model is needed with increased transparency and data sharing.”

Catch up on the Retail Brew stories you may have missed.

• Supply-chain issues: Where are they now?
• More shoppers are relying on BNPL for everyday purchases
• Allbirds claims its new shoe is “zero carbon”