Luxury consumers in the Hamptons and Fifth Avenue are being targeted by the cannabis industry with a new marijuana dispensary.

• High-end clients are increasingly targeting cannabis consumption in the luxury market.
• A high-end marijuana dispensary has opened on Fifth Avenue in New York.
• Luxury accessories and THC-infused drinks are not the only way to enjoy an upscale marijuana experience, as companies are expanding their offerings beyond dispensaries.

The consumption of cannabis has shifted, and it's now prevalent on Fifth Avenue.

Along the famous New York shopping district, customers can purchase jewelry from Cartier, clothing from Saks, and pre-rolled marijuana joints grown in New York state from a new dispensary.

In the 3½ years since New York state legalized adult-use marijuana, licensed cannabis sales have surged, reaching $100 million last year. Now, legal avenues for cannabis consumption are gaining popularity in the luxury market.

While New York officials are shutting down unlicensed shops, there are 166 licensed dispensaries open in the state, including 50 in New York City, and one is located right across the street from Ted Baker.

The Fifth Avenue Travel Agency is a recreational marijuana dispensary with white interiors, glass cases, and a team of "budtenders" offering a wide range of marijuana products.

The retailer's exterior matches the chic storefronts of its neighbors and its sister locations in Union Square and Downtown Brooklyn. All three stores were opened in the past year and a half, and founder Paul Yau stated that a fourth store will soon open in one of the city's high-end shopping districts, SoHo.

At the travel agency, Yau stated that the average purchase consists of two items, typically gummies, marijuana flower, or pre-rolls, priced at an average of $80 to $90 per ticket. The products range from $3.50 THC seltzers to flower sold at $150 per ounce, and accessories are even more expensive.

In New York City, Housing Works Cannabis Co. is the first licensed dispensary to sell marijuana at competitive prices, with the option to spend more, up to $240 on one ounce. All profits from the dispensary go towards supporting the Housing Works nonprofit in the city.

The Union Square location of the Travel Agency contributes 51% of its earnings to the Doe Fund, which assists formerly incarcerated individuals in adjusting to life beyond prison. The Fifth Avenue and Brooklyn branches are owned and operated by individuals with a history of involvement in the justice system related to cannabis.

The ethical mission is what keeps customers coming back, according to Yau. He added, "It's huge, it just provides such a halo."

Reaching the 'canna-curious'

Those who used marijuana before it was legalized in New York constitute the "legacy" customer base of the industry.

Yau stated that his travel agency is targeting "canna-curious" individuals by offering curated products and an architecturally inspired space in high-traffic, high-spending areas.

"The 40-year-old female shopper is a valuable demographic that is just emerging in New York, and stores are being designed with this new shopper in mind, according to Yau. People could easily tell that the store was not an illegal one when they entered."

Katie, a 37-year-old advertising executive in New York, said she returns to the place due to its atmosphere and employee expertise. She added, "It feels like you're in a boutique."

Cann, a THC seltzer company, aims to attract new consumers who are curious about marijuana but have had negative experiences in the past. Marketing is crucial for onboarding these consumers, according to Yau and Cann founder Jake Bullock.

Bullock stated that the cans were made small, pink, and pastel to convey approachability to consumers, implying that the entire can could be consumed, and it only contains 2 milligrams.

A 12-pack of 8 ounce Cann seltzers with 2 milligrams of THC costs $49.95, while a 12-pack of White Claw alcoholic seltzers is available for less than $20.

The upscale marijuana experience isn't limited to THC products.

Jonathan Adler, a luxury home designer, offers marijuana home decor items such as storage canisters and bowls for nearly $300 each. Edie Parker, a lifestyle brand, sells a range of smoker-friendly products including handbags, rolling papers, giant colorful glass pipes, and $450 table lighters, which can be found at boutiques and legal dispensaries like The Travel Agency and Housing Works Cannabis Co.

Seth Rogen's lifestyle and decor brand Houseplant targets luxury cannabis users, with marble rolling trays and ash trays priced at over $200. The company has recently partnered with high-end apparel retailer Kith.

The burgeoning cannabis industry presents promising partnership opportunities for fashion brands, according to Yau, who believes that collaborations with dispensaries like The Travel Agency can help tap into the "coolness" of the industry.

Finding luxury consumers where they are

Gwyneth Paltrow and Baron Davis are among the high-end backers of Cann, a THC seltzer company that aims to target consumers who are willing to spend.

At the Montauk Surf Lodge in New York, guests can now purchase a hemp-derived version of Cann's seltzers in addition to local rosé and high-end liquor.

Jake Bullock, co-founder of Cann, stated that their target audience is premium, primarily millennial consumers, and their competition is alcohol. Bullock and co-founder Luke Anderson view the Surf Lodge partnership as an ideal way to introduce their brand to that audience, through the wealthy Hamptons crowd that is already indulging and spending big.

He remarked, "It's the quintessential customer that Luke and I envisioned the brand fitting into their lives."

Yau, who spoke to CNBC while working remotely near the Hamptons, is aware of the target audience and stated, "We think we're still in the first inning of New York's legal cannabis."