Doctors expected that cannabis use would pose a risk for heart failure patients, but found that the opposite was true. They also found that cannabis users were less likely to die in the hospital.
A research team has made the discovery that cannabis may have benefits for those suffering from heart problems. At a recent meeting of the American Heart Association’s Scientific Sessions, Dr. Oluwole Adegbala, medical resident at Englewood Hospital and Medical Center in New Jersey, presented the findings of an unpublished study on the link between cannabis use and heart failure. Previous research has suggested links between cannabis use and heart problems, and the research team fully expected to find evidence supporting claims that cannabis users were at greater risk of heart-related health problems.
Instead, the team was “surprised” to find that cannabis users were less likely to experience atrial fibrillation (A-fib), an irregularity of the heartbeat that can worsen the symptoms of heart failure, compared to non-users. Dr. Adegbala and his colleagues analyzed a database of over 6 million patients suffering from heart failure who were admitted to the hospital between 2007 and 2014. Around 23,000 of these patients reportedly used cannabis but were not considered dependent on the drug, and another 1,200 patients were considered dependent cannabis users, LiveScience reports.
The research team found that the non-dependent cannabis users were 18% less likely than non-users to experience A-fib, and were also 46% less likely to die in the hospital. The dependent cannabis users were 31% less likely to develop A-fib and 58% less likely to die in the hospital than non-users. Researchers adjusted their data to account for age, socioeconomic status, and use of other drugs, and discovered that their findings were still solid.
Dr. Adegbala told LiveScience that his team was not able to identify the exact reasons why cannabis might decrease the risk of A-fib or mortality for heart failure patients. Previous research in animals has found that high blood pressure and atherosclerosis, two risk factors for A-fib, can be reduced by activating cannabinoid receptors. Dr. Adegbala also noted that cannabidiol can reduce inflammation, which is another risk factor for A-fib. Despite their positive findings, the research team does not recommend that heart failure patients begin using cannabis as a treatment until further research can be conducted to support or refute the findings of this study.
Constellation brands, which brews Corona beer, made headlines today, as it becomes the first major wine, beer and spirits company to get in on the Green Rush.
Talk about getting ‘twisted.’
For the first time ever, a major player in the wine, beer and spirits industry is set to link up with the rapidly expanding cannabis market, as the company that brews the popular Mexican brand beer Corona has just claimed its own stake in the marijuana green rush.
Two Worlds Collide
Constellation Brands, which also distills Svedka vodka, just invested a whopping $191 million in the Canadian-based cannabis company Canopy Growth Corporation.
The chunk of change is good for a 10 percent stake in the marijuana corporation, but the deal comes with an option for Constellation to purchase an additional ownership interest in Canopy in the future.
Since the acquisition, Constellation shares increased almost one percent during premarket trading.
The move is viewed as a risk by some, considering cannabis is still illegal on a federal scale. Constellation remains the only alcohol-business to take said risk, but chief executive Rob Sands told the Wall Street Journal that it’s a calculated move and believes he now has a leg up on his competition.
“We’re obviously trying to get first-mover advantage,” Sands said.
Sands also added that he thinks it’s only a matter of time before cannabis is legalized on a federal level.
”We think that it’s highly likely, given what’s happened at the state level,” Sands said.
While just eight states (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Washington) and the District of Columbia have legalized recreational cannabis, there are 22 other states that have legalized medical marijuana, and that number is expected to grow. Canopy Growth happens to be the biggest licensed producer of medical marijuana in Canada, with a valuation of C$2.2 billion.
Canada is also set to legalize recreational cannabis by July 18, which bodes well for the Canada-based company. Edibles and cannabis-infused beverages are projected to be legalized the following year, which would seemingly set up a large payout for Constellation.
Corona Invests In The Marijuana Green Rush
Despite cannabis’ increasing legality in the United States, Constellation says it doesn’t anticipate selling its products in the U.S. until the plant is legalized on both a state and federal level.
Regardless of U.S. policy, there is still significant profitability to be had in Canada alone.
Many pre-existing drug companies currently utilize the plant in their medications, and a Canadian index of marijuana stocks, calculated by research house Canaccord Genuity, indicates cannabis stocks have risen as much as 36 percent over the past month.
According to analysts, a short-term option for Constellation could be developing non-alcoholic, cannabis-infused beverages to be sold only in Canada upon legalization. It has been estimated that this untapped market alone could be worth around $5- $10 billion.
Eight Capital analyst Daniel Pearlstein believes the investment will have a significant impact on a variety of industries, including alcohol, tobacco and pharmaceutical companies.
“This move is a complete game changer, not only for Canopy but also for the entire industry,” Pearlstein said.
To read more visit: https://hightimes.com/news/corona-invests-marijuana-green-rush/
Is now the right time to invest in the Cannabis Industry?
As of this year, cannabis is legal in 29 states plus the District of Columbia, and the number is rising.
The Cannabis Stock Index is up 26.4% month-to-date.
~30,000 new cannabis companies have entered the space this year.
There is a noticeable trend here that seems to be pointing towards, yes.
Five years ago, Colorado and Washington legalized the adult use of marijuana, sparking what is now one of the fastest growing industries in the U.S.
The industry has since been growing at a 16% compounded annual growth rate.
By the end of 2020, it’s projected to double in size from $22 billion in 2017 to $44 billion.
U.S. Cannabis Industry Total Economic Impact: 2013-2020 in Billions (Marijuana Business Daily)
What was once a taboo is changing the minds of constituents and investors alike.
⅔ of the population is for the legalization of cannabis.
This year alone, 31% of americans will begin living in cannabis-friendly states.
Clearly there is a bright future ahead.
The growth is tangible, but the risks are substantial.
Cannabis is still federally illegal and labeled a Schedule I drug.
Some cannabis stocks hoping to make it big still have to wait for this to change.
Those that don’t still have to follow highly regulated state laws and some existing companies are limited in their ability to sell across state lines.
For investors, the opportunities to profit from a legitimate company who sells marijuana products are scarce.
For example, the U.S. Food and Drug Administration has only approved a grand total of three cannabinoid-related drugs: AbbVie (NYSE:ABBV), Valeant Pharmaceuticals (NYSE:VRX), and Insys Therapeutics (NASDAQ:INSY).
As mentioned above, upwards of 30,000 new cannabis businesses have entered the cannabis space this year.
This means a highly saturated market that investors have to shuffle through to separate the good from the bad.
Your Stake in The Green Rush
So, how can investors get involved while reducing their risk profile?
One solution is to invest in companies that don’t actually touch the plant.
Just imagine the profit gained from those who sold shovels during the gold rush.
The idea is the same with ancillary service companies, supporting the industry’s growth while sidestepping a lot of the risk.
Cannabis businesses who support the industry with real estate, technology, equipment needs, etc., make up a large, yet often undervalued part of the industry.
It’s hard to pinpoint just how much money has poured into ancillary service companies supporting cannabis businesses, but the number falls easily into hundreds of millions.
These companies are benefiting from the industry growth and the extended freedom to sell products and services across the U.S.
But again, the space is crowded with startups, and it can be hard to decipher the promising from the weak.
One ancillary service company to look at is Scotts Miracle-Gro (NYSE:SMG) who generated 2.8 billion with 10% of the revenue coming from the hydroponics companies it acquired.
The spotlight is also on Doyen Elements, who just launched its IPO and is giving retail investors the opportunity to buy into it before the company’s planned stock market listing.
Doyen Elements has purchase agreements for 16 different businesses spanning across all areas of the cannabis industry.
Recently the company made headlines for beginning construction on a 234,000 sq. ft. grow facility, one of the largest in North America.
The company also plans to list on the OTCQX after the offering closes.
In closing, while there is a lot of risk involved when investing in the cannabis industry, the potential upside makes it well worth the research and diligence to find the right way to get involved.
To read more visit: https://www.modestmoney.com/stake-22-billion-dollar-cannabis-industry/
Oregon is reaping the green benefits of its legal weed industry to the tune of a cool $85 million. Having legalized marijuana in 2014, Oregon has finally begun to distribute the tax dollars that the state has collected, after a two-year wait.
Wait, What Took Oregon So Long To Distribute Its Legal Cannabis Tax Revenue?
The reason is that the Oregon Liquor Control Commission (OLCC), which oversees the state’s legal marijuana program, had to first reimburse the administrative costs associated with setting up and implementing the program.
The OLCC took out a loan for $13 million to cover the initial setup costs, agency spokesman Mark Pettinger explained to the King5 television station.
Now that the money has been paid back, it’s time to distribute the tax revenue to various health, educational and law enforcement programs across the state.
How Does Oregon Distribute Its Legal Cannabis Tax Revenue?
Here’s a break down of where the money is going, according to the Oregon Department of Revenue:
- $34 million will benefit the state school fund.
- $17 million will go to the mental health, alcoholism and drug services account.
- $17 million will go to Oregon cities and counties.
- $12 million will go to the Oregon State Police.
- $4 million will go to the Oregon Health Authority.
And apparently this is just the tip of the iceberg. Oregon’s weed sales have far exceeded all expectations.
“I am glad to hear that the revenue is finally being distributed,” Anthony Johnson, the chief petitioner of Measure 91 told the Oregonian. “This is what the voters intended. It shows that legalizing and regulating cannabis can help generate revenue for important governmental services.”
During just the first three months of this year, roughly 11,000 pounds of weed were sold in the state’s approximately 300 legal dispensaries, for total sales revenue of $43.7 million, generating some $13.4 million in sales tax revenue.
Thankfully, this is happening—or will happen if given the chance—all around the country.
Marijuana tax revenue is expected to exceed $2.3 billion by 2020 in the United States and create up to 300,000 jobs. Think of all those social, educational, housing and drug counseling programs that can be funded with these tax dollars. Who wouldn’t want to be part of one of the fastest growing industries in the United States? Why not tell your congress people that you’d like to be!
To read more visit: https://hightimes.com/business/oregon-cannabis-tax-revenue/
US cash-intensive cannabis businesses (420s) are looking for ways to meet customer demand while struggling under federal prohibition. Cryptocurrencies are increasing in popularity with 420s, and now Zenapay is entering the market with its own bitcoin solution.
The US states comprising its contiguous west, if outliers include Alaska and Nevada, is home to fifty-two million people. That is an enormous market. They also happen to be the bulk of states that have legalized cannabis for personal use, medicinal use, and sale.
Tension arises between all such states and the federal government because the federal government does not agree with voters’ will.
Beyond criminality, issues of banking and finance come into play. The federal government is given wide jurisdiction over banking and money, and financial institutions are wary of running afoul of federal laws.
In practical terms this means bank accounts, access to lines of credit, and myriads of financial products are in practice forbidden to 420 companies.
Much as it was on the black market, 420s are reliant almost exclusively upon cash.
Mounds of cash on hand is not only a logistical nightmare in a modern economy, it’s also a real security issue. And with twenty more states coming online, passing slimmed-down versions of legalization/decriminalization, the cannabis market is looking for relief.
“Statistics from financial services firm Cowen & Co showed legal cannabis was a $6 billion industry last year, and is expected to grow to $50 billion by 2026,” RT onlinereports.
Population numbers and these projections are enticing payment service providers into the cannabis market.
The latest such example is a company out of Chicago, Epazz. It’s an over-the-counter publicly traded business software concern, betting rollouts early winter of this year in Apple’s App Store, and later for Android, will go a long way in making 420s more efficient and safer.
Zenapay is a one percent transaction fee, point-of-service (POS) solution. It boasts online and in-store bitcoin purchases capability using proprietary software, allowing for customer anonymity and for 420s to lessen cash burdens.
“We are filling a large need in the cannabis community,” the company’s press release quoted its CEO Shaun Passley. Merchants, he said, “due to the stringent limitations by the standard banking systems” simply cannot be banked.
A PoS with bitcoin functionality eliminates these issues.
Entrepreneurial bitcoiners, regardless of niche, are constantly looking for POS services to keep accounting straight as they look to drop cash dependency for bitcoin.
If it proves successful, Zenapay says it will offer payroll services, e-commerce stores, inventory tracking, and compliance features going forward.
What do you think? Are 420s a welcome addition to the bitcoin ecosystem? Are solutions preserving anonymity finally ‘getting it?’ Tell us in the comments below!
Images courtesy of: Original Strains Seed Bank, Green Rush Daily.
At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.
Disclaimer: None of the information on news.Bitcoin.com is intended as investment advice, as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products or companies. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
With so many American states legalizing medical and adult-use cannabis, it’s no surprise that entrepreneurs are joining the rapidly growing industry. Federal illegality, though, makes it tough for these pioneers and their investors to make money.
Scaling a business that’s prohibited from selling product outside the state in which it’s produced is quite challenging. Add the onerous federal 280E tax—which disallows normal business expenses and can lead to income tax being due even when a company isn’t even profitable—and it’s no wonder that we aren’t seeing a bull market in cannabis producers or retailers.
Last month, I suggested that investors looking to capitalize on cannabis legalization would be wise to explore international options. While the United States has yet to embrace cannabis legalization at the federal level, several other countries have created federally legal medical cannabis programs.
Our neighbors to the north and south are on board. Mexico recently legalized (but hasn’t yet implemented) medical cannabis. Canada’s federally legal medical cannabis program now serves more than 200,000 patients nationwide. Uruguay has legalized cannabis and allows it to be sold in pharmacies.
While countries on five continents (not Asia or Antarctica) have embraced medical cannabis at the federal level, investors should pay particular attention to five regions that show particular promise. The good news is that there are Canadian companies active in all five, which means investors may be able to participate globally without trading in securities all over the world.
When it comes to legal cannabis investment opportunities, Canada is the king. Health Canada, which oversees the medical program, has issued 62 licenses to about 50 medical cannabis companies, and 23 of these licensed producers (LPs) trade publicly. Five even trade on the Toronto Stock Exchange, the equivalent of our own New York Exchange, including Aphria, Aurora Cannabis, CanniMed Therapeutics, Canopy Growth and MedReleaf.
These companies are positioning for full legalization in July by expanding their production capacity and ramping up their extracts expertise. Canada was slow to permit cannabis concentrates, but concentrates are now driving industry growth, despite the fact that they remain highly restricted (oil only, with THC potency capped). In addition to serving a larger market following legalization next year with a broader array of products over time, including edibles most likely, many of the Canadian LPs also have global operations.
The publicly-traded LPs include not only these global titans but also some smaller producers positioning for legalization with their craft cannabis offerings. If you want to stay on top of the Canadian industry, we have developed a resource for investors at New Cannabis Ventures.
Germany legalized medical cannabis in early 2017, and is currently in the process of licensing companies for production. For now, its market is small and being supplied with imported products, mainly from Canada. What makes this market so interesting, besides the large population (83 million) is that medical cannabis will be distributed in pharmacies and health insurance will cover it.
I’m not aware of any publicly-traded German companies that have announced an interest in entering the sector, but several Canadian companies are either supplying the market now or have announced plans to apply for a production license, including ABcann, Aurora Cannabis, Canopy Growth, Cronos Group, Maricann and MedReleaf. Other European countries are already liberalizing, and Germany’s program will likely lead to other countries implementing similar programs.
The market is very limited in Australia for now, with most of the industry focused on research. There are a few companies with production licenses, though, including publicly traded Cann Group and Auscann Group. Several others are not yet licensed but trade publicly, and the market has been in a bit of a bubble this year.
Investors interested in Cann Group or AusCann Group can gain exposure through Canadian companies like Aurora Cannabis, which owns about 20% of Cann Group; or Canopy Growth, which owns about 10% of Auscann.
While Uruguay has legalized the adult use of cannabis, Colombia and Chile have legalized medical cannabis. Auscann Group has a partnership with the only license holder in Chile. International Cannabis Company is a publicly-traded company in Canada that operates in Uruguay. Canopy Growth has established a joint venture in Brazil, which permits medical cannabis on a limited basis. I expect to see two other Canadian companies that operated in Colombia go public in 2018.
Perhaps the global cannabis research leader, Israel permits medical cannabis but doesn’t yet have a very developed industry, though that’s likely to change soon.
Cronos Group, a company that wholly owns two Canadian LPs and has stakes in several others, announced a deal last month to establish Cronos Israel and build a facility on Kibbutz Gan Shmuel, targeting initial annual production of 5 million grams at a cost of less than C$0.50 per gram. Given the country’s reputation for innovation, its unique genetics and the potential to export to Europe, I expect to see more deals like this one.
The bottom line: There is a world of opportunity for cannabis investors, and perhaps the best way to play it is by investing in Canadian LPs that are actively pursuing global opportunities.
Next up: How Canadian companies are funding the U.S. cannabis industry. Talk with you in three weeks.
Canada’s largest licensed cannabis producer is about to get even bigger. On Wednesday, Canopy Growth Corp. announced that it will develop up to 3 million square feet of additional greenhouse capacity in British Columbia.
The move, part of a newly announced joint venture with a large-scale British Columbia-based greenhouse operator to form BC Tweed Joint Venture Inc., will more than doubles Canopy’s cultivation footprint, according to a company release.
The BC greenhouses currently grow peppers, CEO Bruce Linton said in the release, and the company will spend several million dollars to adapt them for cannabis cultivation. The majority of the resulting product is expected to be sold on Canada’s domestic market.
“The Joint Venture allows us to expand our operational footprint for greenhouse production while increasing our institutional knowledge of operating large-scale greenhouses,” Linton said. “Our cannabis expertise already operating the largest cannabis greenhouse in the sector combined with experience of our new partner’s extensive large-scale greenhouse production record, is great news for our customers and investors.”
The deal will increase Canopy’s total greenhouse production footprint to approximately 2.3 million square feet and includes an option to grow that footprint to 4 million square feet. The venture also expands Canopy’s operations into six Canadian provinces, part of what the company says is a plan for international growth.
Packaging has been a challenge for cannabis companies eager to get their products on the market while adhering to regulations.
That’s why “medical marijuana was one of the hot topics at the recent PACK EXPO Las Vegas/Healthcare Packaging EXPO,” according to Packaging World.
At the expo, Presto Products Co.’s Todd Meussling gave an interview on opportunities for packaging companies to work with the cannabis industry, as well as regulations challenges. Presto is a market-leading supplier of products ranging from private label food and disposer bags to packaging closures to soil stabilization materials to specialty stretch films. See the full interview here.
Meussling said, “Whether it’s medical or adult use – one statistic I came across that’s very interesting is that by 2020, the cannabis industry will be at approximately $17 billion. To put that in perspective for packagers, the natural cheese market right now is at about $12 billion.
“So there’s — outside of medical — 20,000 commercial uses for cannabis. When you look at it from a packaging standpoint, every one of those products is going to have an application.”
Meussling said the most common product categories with packaging needs have been inhalants, topicals like lotions, and then edibles, “which is the most substantial category that I see growing.”
Meussling said the packaging industry has the solutions and methods to package, for example, medical cannabis cookies, because they have the experience of packaging cookies. The new element will be the child-proofing requirement that will need to be added, he said.
In 2014, packaging was the ‘Wild West’ as companies tried to get their products on the market quickly. “We’d see products that were over-packaged and under-packaged,” Meussling said.
“The challenges that they’re faced with as I understand are a result of regulations,” he said, adding that there is room for standardization and automation in manufacturing cannabis packaging.
The need for child-proof and odor-proof packaging has led to a variety of industry-specific cannabis packaging companies, including Marijuana Packaging, Green Rush Packaging, and more.
Garett Fortune of FunkSac founded his company after noticing the need for child-proof packaging. “I saw some major gaps for packaging cannabis and noticed that there weren’t currently any packaging that utilized child-lock features to prevent accidental consumption,” he told Cashinbis in 2015.
Cannabis product packaging regulations are similar to those of other legal drugs. For example, they need to be tamper-proof and clearly labeled, with qualifications for any health benefit claims.
California’s 2015 Assembly Bill 266 established packaging requirements for cannabis flowers and edibles throughout California. The California Bureau of Marijuana Control enforces these cannabis packaging laws by imposing fines or revoking the licenses of businesses, according to Green Rush Packaging. Green Rush also lists these requirements:
- Packaging must be clearly labeled as a cannabis or marijuana product.
- The label can’t have any cartoons or other elements that make it attractive to children.
- Labels also need to list information related to the cultivation of the medical marijuana in the product, including the source and the date.
- For dried cannabis flowers or leaves, the business needs to list the weight of product in the package.
- For cannabis edibles, food labeling including whether or not allergens are in the product is required by law.
- Perhaps most importantly for cannabis businesses in California, the label needs to contain precise information about the active chemicals in marijuana, including THC, CBD, and other cannabinoids.
As recreational marijuana markets roll out, how will the Green Rush change retail?
Those not lucky enough to be there in person saw the media reports: On July 1, 2017, the first day of recreational cannabis sales in Nevada, long lines of eager, excited customers waited at dispensaries under the blazing desert sun. Dispensaries opened at midnight to celebrate the beginning of adult-use sales. National and local news crews covered the historic event, just as they did in Colorado in 2014, followed by Washington State and Oregon, as well as Massachusetts, Maine, and Alaska. Nevada was the fifth state to go recreational.
By July 4, Independence Day, media reports made it seem as if every bud in Nevada had gone up in smoke, maybe because of high demand. Lady Luck smiled on Nevada dispensaries, it seemed, as long as the flower kept flowing.
“That was a distribution problem, as opposed to a product-supply problem. There always has been enough products, but the issue that got publicized was related to distribution,” Andrew Jolley said. Jolley is founder of Las Vegas dispensary The+Source and a member of the Green Ribbon advisory panel working with the state to develop policy and regulations for the cannabis industry.
“Nevada, with the implementation of recreational sales, created a new license category called Distribution. The distribution companies transport the product between the growers and dispensaries, and those people, since they weren’t already up and running for medical, they weren’t able to get up and running or licensed in time,” Jolley explained. “There was some fighting and disagreement about who should be able to distribute and how that would work. Ultimately, the Department of Taxation was able to accelerate the time frame, to get some companies approved to distribute. I’m not aware of any companies that completely ran out of product. I’ve heard stories of people running out of specific products, but not all inventory.”
California, the sixth largest cannabis economy in the world, is poised to start recreational sales January 1, 2018. While Colorado continues to be the gold standard for implementation of a successful state regulatory scheme, a smooth roll-out in California may help accelerate recreational sales globally by establishing what experts predict will be the largest U.S. market—and a very competitive one. To promote growth, state officials in Oregon and Nevada have taken a proactive, even supportive, role in implementing regulatory infrastructure for the legal cannabis industry, and many speculate California will do the same as its regulatory scheme is put into place.
But, if you’re making long-term plans for your existing storefront dispensary in any legal state that isn’t already doing recreational sales, you’re probably trying to imagine what recreational retail will look like when it finally happens in your area.
“The recreational program has done really well and has been successful because it built upon the regulations in place for the medical program here in Nevada.” —Andrew Jolley, The+Source
Jolley pointed out Nevada was in a unique situation. The time span between allowing medical dispensaries to open and allowing recreational sales was fairly short, allowing state government to implement a comprehensive regulatory scheme based on existing statewide medical regulations.
“Our first store opened on December 10, 2015. The very first dispensary in Nevada opened the summer of 2015, so I think we were maybe the fifth store to open,” Jolley said. “Then in November ’16, [recreational use] passed in the election. Our state department of taxation decided to jump-start recreational sales by creating the Early Start Program, and that began July 1 of this year. Compared to Colorado, or even California, it was a pretty accelerated timeline. The recreational program has done really well and has been successful because it built upon the regulations in place for the medical program here in Nevada.”
With less than six months to go, does Jolley think California is ready for the recreational Green Rush of 2018?
“In California, you have a very long history and a patchwork of medical laws and regulations, but nothing’s consistent throughout the whole state,” Jolley said. “Whereas in Nevada, when they started allowing dispensaries for the first time—they passed medical marijuana in our state seventeen years ago, but they didn’t allow dispensaries until ’15, and from that point forward it’s been very structured and organized, and heavily, heavily regulated.”
Even while other states’ lawmakers thrash out regulatory legislation and voters decide what they’re willing to approve, dispensary operators need to be a few steps ahead of the retail game when the recreational bandwagon finally rolls into town.
“Recreational cannabis sales began in Oregon on October 1, 2015, when the state first allowed medical shops to sell to the general public [21 and older] in limited quantities. That was a big spike in traffic for everyone,” FarmaPDX co-owner Sam Heywood said. “Later, in November 2016, shops like ours began to switch their official licensing from medical to recreational. Most shops saw another, smaller spike at that time.
“From the outset, it was clear to us that legalization was inevitable in Oregon, so we designed Farma with that in mind. To us, the most essential question was ‘What would we look like if prohibition never happened; if the federal government hadn’t spent decades branding cannabis for us?’
“The answer to that question might seem obvious now, as sophisticated cannabis brands begin to emerge, but at the time, in early 2014, it wasn’t so clear,” Heywood continued. “Most people thought that if they avoided Bob Marley posters and cartoon pot leaves, that was progressive. That was good enough.
“We knew that in order to create a space that our friends and family would want to visit, we had to do more than avoid clichés. We had to address people’s needs. That meant a bright, inviting space, clear information, good design, and—above all—capable and informed staff.”
Heywood, Jolley, and Cannasseur founder Ryan Griego all agreed: Staff up dispensaries prior to the launch of recreational sales.
At Cannasseur, located in Pueblo, Colorado, “we added security and hired four more staff members [budtenders] once we opened [for recreational sales], to handle the volume,” Griego said. “We had prepared adequately in the beginning, but we did add armed security after seeing the high volume of customers.”
Jolley said The+Source increased security staff, too, and added some structural enhancements. “We actually purchased new vault doors for our vault,” he said. “We have twenty-four-hour security physically there, and added people to the security team. But, thankfully, we haven’t seen any increased issues, or any at all. We’ve had zero issues since we started retail sales. We did take some steps to make sure we were prepared for that, but we haven’t had any incidents.
“I will say, just hiring and training staff and the distribution issue have been the two biggest challenges we’ve encountered, and thankfully we’ve been able to find resolutions to those challenges,” he said.
Heywood said, “One day we were a relatively quiet medical shop, and the next we were a bustling retailer. So, things like traffic flow and point-of-sale access became issues overnight. The most pressing need, however, was staffing. We realized immediately that we needed to hire more people.
“We hired and trained several new staff members before we transitioned to recreational sales. That turned out to be the single most important step we could have taken,” he added. “The single best thing you can do is hire great people. While it’s not terribly difficult to source great product, at least in a market like Oregon, it’s a tremendous challenge to give your customers an amazing experience, consistently, every day. And that begins and ends with your staff.”
Running Some Numbers
Once recreational sales were allowed in their states, each dispensary owner said profits increased, which is no surprise. But Griego cautioned against getting carried away with inventory.
“Don’t get excited and buy too much low-grade bud. Stick to the basics,” he advised. “Flower [55 percent of sales], concentrates and vapes [25 percent], and edibles, topicals, et cetera [20 percent]. We started with 100 pounds of flower and sold out of that in three weeks. Flower is still the largest seller over all other items.
“There were far more tourists than we expected for the first two years, and then it slowly became more locals,” Griego continued. “When we first opened up in 2014, business was 60 percent tourist and 40 percent local. Now, it’s about 80 percent local and 20 percent tourist.
“HOPEFULLY, YOU ALSO HAVE YOUR OWN GROW AND EXTRACTION LAB; THIS HAS BEEN A BIG MARGIN BOOSTER FOR US,” HE ADDED.
Oregon business boomed for Farma, according to Heywood. “We saw a ten-fold increase in traffic when the adult-use market launched in Oregon,” he said. “We did have a run on product, particularly flower from our most skilled producers. Fortunately, we have great relationships with our vendors, and we were able to anticipate and meet the increased demand. It certainly helps that we’re located in the epicenter of the consumer market in southeast Portland. That gave us access to distribution and made it easier for us to replenish inventory.”
Jolley said, “After the initial novelty wore off [at The+Source’s suburban Las Vegas location], we haven’t really seen lines. We’ve seen a significant increase in business, but we are handling customers without a problem. That’s true for other stores, too, not just us. We’ve seen about a three-times increase in our volume of business.”
All three operators agreed having a solid point-of-sale system is essential, as is operating several cash registers to accommodate peak periods and shorten customer wait times. “The POS were designed with high volume in mind,” Griego said.
Cannasseur had retail in mind from the early design stages, he noted. “We built a very large waiting room, as we were going to be one of four recreational stores in Pueblo County when we opened,” he said. “We also built separate entrances and exits into the dispensing areas, and both proved to be great decisions.
“We added accessory and apparel racks in the waiting areas to allow customers to shop while they waited,” he added.
Though FarmaPDX’s business model and storefront were designed with retail features factored in, Heywood said the company made a few adjustments after recreational sales took effect.
“Most of the changes we did make were incremental: more staff, more points of sale, more inventory, and more products aimed at serving casual users, like low-potency edibles,” he said.
Jolley said the Vegas store “made some minor tweaks [to the show floor and display area], but the biggest change we made was adding staff. We almost doubled our staff after July 1. But we had seven checkout stations previously, so we just make sure that we have enough manpower and staff at all times, to be able to run all seven checkout stations.
“We extended our hours quite a bit,” he added, “and we also started online ordering, so our customers can place an order online and either have it delivered or pick it up. That’s helped to alleviate the pressure at the cash register, as well.”
The Recreational Animal
What happens when casual consumers are taken out of a quasi-legal (formerly black) market and allowed to behave like mainstream consumers in the full light of day? In-store data is anecdotal and varied, but informative.
“Medical patients—number one, they spend more money,” Jolley said. “They buy a different profile of product, but there’s a lot of overlap. So, for example, about half our sales are flower. That was true under medical[-only sales], and it’s true under retail.
“But what we’re also finding is that the recreational customer is more interested in edibles and vapor pens, and they’re looking for more discreet ways to consume,” he said. “Maybe their roommate doesn’t smoke or spouse doesn’t like it, so they’re looking for more discreet ways to consume. I don’t see medical patients be as concerned about that. They’re, by and large, using these products for medical purposes, and they kind of have to do what they have to do, whereas retail customers are consuming cannabis different ways with different people in different settings, and the products they’re purchasing reflect that.”
In Portland, Farma has become a multi-generational destination for cannabis enthusiasts, young and old, according to Heywood.
“We’ve been pleasantly surprised by the number of families who come in together,” he said. “It’s really fun to see older parents being led through the world of modern cannabis by an adult child. It’s a bonding experience for them, and we enjoy being part of it.”
Oregon’s consumers walk in the door semi-educated about cannabis, he noted, “The West Coast, and particularly Portland, has a deep and knowledgeable cannabis culture,” he said. “We see a lot of growers and longtime users in our shop. We also see a lot of tourists, too.”
In Colorado, cannabis tourism created a tsunami after the first big adult-use shockwave. By setting pioneering standards in cannabis regulation and sales, Colorado became a big, green guinea pig. Everyone is in learning mode, especially newbies and tourists. Griego said many new consumers require solid recommendations and lots of customer service.
“[New customers] mostly have no clue what to buy, so make sure your budtenders are well-trained salespeople and have adequate knowledge about how to recommend products,” he advised.
Advertising and Promotions
The Las Vegas Sun recently quoted Jolley about the topic of cannabis advertising at Vegas’ McCarran Airport and his work with the Green Ribbon panel. While cannabis advertising isn’t allowed at much-traversed McCarran, cannabis ads recently appeared in Allegiant Airlines’s inflight magazine and in in-flight video ads on Virgin America. But The+Source didn’t change its advertising scheme much in order to lure recreational customers.
“We’re primarily geared toward locals, and we only see about 20 or 25 percent of our business coming from visitors [to the city],” Jolley said. “We don’t do a lot of billboards and that kind of thing. We advertise on Leafly and Weedmaps and have a strong online presence, but we don’t do a lot of traditional advertising. We rely mostly on word of mouth. We’re very fortunate to have a lot of very loyal customers, and they’re the best source of advertising, to be honest with you.”
Promotions are a great way to generate goodwill advertising, which is an important promotional component that’s often overlooked. Unlike other advertising, word-of-mouth really must be earned by providing a special product or service.
“We do some of that, for sure,” Jolley said. “We do what we call ‘snap sales,’ so if we find a good deal, for example, on a particular strain, we’ll promote that and sell it for cheap. Things like half-ounces at a discounted price, or we’ll do [buy one, get one offers] or deals on pre-rolls or whatever. We also produce our own line of vapor pens and vapor cartridges, so we promote those, as well. And, of course, we still have deals and promotions that we extend to medical patients and will always keep those around.”
Heywood promotes customer loyalty with promotions and sales, as well, and makes sure the store has covers both recreational and medical customers. “We give discounts to medical patients,” he said. “That will always be a core part of our ethos, and it’s something recreational users understand and appreciate. We also offer a customer reward card to everyone who comes through.”
To us, the most essential question was ‘what would we look like if prohibition never happened; if the federal government hadn’tspent decades branding cannabis for us?” – Sam Heywood, Farma PDX
Griego said, “Cannasseur does all of the above. We offer weekly specials—generally products we are overstocked on. We also do local and out-of-state specials to be sure to include everyone. Our customers love our $19-a-gram concentrate deals and our 50-percent-off top-shelf flower.”
It’s evident recreational sales will change the face of cannabis, but will cannabis change the face of retail sales? On a multibillion-dollar roll, many think the industry eventually will gain enough momentum to change small- and mid-sized retail businesses, or even larger society.
Going forward, will industry leaders honor the out-of-the-big-box thinking that drove the industry to this point? Is it not if, but when cannabis reaches the status of fine wines, with appellations and vintages? The process continues. Between the rush to market and the slow, cumbersome process of legislation and policy-making, a nuanced approach to adult-use cannabis is beginning to emerge. While progress seems to have taken forever, it’s happening faster than you think. Astute dispensary owners know everything about recreational rollouts will require a nuanced approach to meet the needs of a diverse cross-section of clients from newbies to OGs.
“We take a special interest in getting those more casual users up to speed on the nuances of this plant,” Heywood said.
To read more visit: https://mgretailer.com/are-you-ready-to-rock-recreational-marijuana/