5 marijuana business people share strategy ahead of recreational sales rollout

Photo: Flickr - Tony Webster
Ahead of the recreational rollout, what are dispensary owners most concerned about ?

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We asked owners and managers of four dispensaries around the state, as well as a rec store owner in Vancouver, how business will change after the rollout of recreational pot on October 1st.

Rosa Cazares, vice president, La Mota

La Mota has four locations: Portland, Roseburg, Rockaway Beach and Medford (not yet open).

Biggest concern:

No. 1, you can’t bank. So we need to prepare a good security plan because the safety of our employees is very important. You don’t know what to expect; you can only predict what your sales are going to be.

It’s coming in with harvest time, so it’s a busy time for all the dispensaries that are vertically integrated. We’re adding POS systems and we’re hiring. We hired 20 people next. New hires and new training. There’s a lot to do to make sure we’re in the right direction and that we’re perfect.

Biggest challenge up to now:

In Rockaway, we had a deal with the city council not wanting rec sales; for us to be able to sell early prepares us for the actual tasks to open in other cities. I think with the added revenue, we’ll play a part in bringing more tax money to these cities so they can spend more on law enforcement and education. We want everyone to have safe access to marijuana because they do already use it and a lot of people want to avoid the black market.

On selling in rural Oregon:

We’re constantly fighting to educate [city governments] and how nothing is going to change that much. A lot of cities feel [recreational sales are] a negative, but we see it as a net positive. In Rockaway Beach, they actually decide to ban recreational sales and within 48 hours they lifted the ban. Shady Cove wanted to also. In Portland, we don’t have these issues.

Jim Wymore, owner, Oregon Medigreen

Oregon Medigreen is a medical dispensary in Eugene.

Why add rec sales?

Obviously, it’ll provide an influx of customers. We’ll only do it temporarily, we do prefer medical. But since there are so many dispensaries, it’s been tough for us financially. The retail sales from October till OLCC opens, it’ll get us to the point of making money and that’s been tough because of so much competition.

Biggest challenge up to this point:

There’s going to be a lack of product come October. 

It’ll be readily available at the end of October because that’s when the harvest will roll in. But I hear that dispensaries are low on product because summer is the dry time of year. There’s not a whole that can be done; we’re at the mercy of the outdoor harvest and the indoor growers getting their harvest in. I do grow my own but that sells out quickly. We do have some in-house products but we do rely on outside growers and there’s such a high demand right now.

If you prefer medical, why get into rec sales?

It’ll be a boost in the interim, but the reason i got into the business is because [medical marijuana] helped me so much. I hate opiate drugs and I finally found something that would provide pain relief and sleep when taking the physician-prescribed medications it was causing severe problems like constipation, nausea and liver damage. I really want to stay focused on medical. We want to get enough [revenue] in the interim [between Oct. 1 and when the OLCC can launch its stores] so we can have a rec grow and the store will be strictly for medical.

Sara Kemple, general manager, Vessel

Vessel has one shop in Portland.

Why add rec sales?

We basically know that there is going to be a larger market. There aren’t as many cardholders as there are people over 21 in Portland. We intend on making enough money that the [licensing] fees won’t matter. We pay about that much [around $3,000] for a pound of weed, so it’s not that big of a deal. It’s not something we want to pay, but we will.

Biggest challenge?

Figuring out what are the steps we need to take to let people we’re going recreational: Making sure we have the right signage, we’re compliant and that we have inventory for the larger market. We’ve been preparing for it for a long time. We’re ready. I worked in Washington and we started our store over there and lost $77,000 in the first week because of not figuring out the tax rate. Rec sales has the ability to bring in large amounts of money to offset those mistakes. So we’re thinking about paying taxes and fees, we’ll pay it in hopes of making as much money as these stores in Washington and Colorado.

How much added revenue do you expect?

We’re going to increase our prices slightly. We’ll be doing a 25% increase in prices, which will bring us 25% more in revenue. We’ll have to see how busy we’ll get. We’ll know better after the first few days.

Lyle Coppinger, co-owner, Cannabend

Cannabend markets itself as “Central Oregon’s premier medical marijuana resource center.”

Why get into rec sales?

To spread information that this is a great product. It’s better than anything else that’s out there. Medical patients have the right to it, but at the same time, it should be available to everybody. I don’t think there should be any regulation. It’s not life threatening in any manner. I don’t understand why it needs to be regulated in the first place.

Biggest challenge?

Right now we’re dealing with the banking and taxing issues. The two ADE taxes are ridiculous. Not being able to run as a normal business is ridiculous. I want to pay taxes like everybody else: with a check. That shouldn’t be too much to ask.

Other than that, it’s the uncertainty of the market. We don’t know what the rec market influx is going to bring, and we don’t know what the market will support. So if too many people come in, we don’t know if we can handle it.

How do you prepare for the unknown?

We have no projections whatsoever, which is why we’re uncertain and anxious.

Adam Hamide, co-owner, Main Street Marijuana

Main Street Marijuana in Vancouver, Wash., had the highest sales figures for a recreational store in the world in August.

How will Portland’s rec stores hurt your client base?

We’ll see if they still come over here when we have our $125 ounces and $20 eighths. We’ll see what percentage we lose; obviously we’ll lose some.

There’s so much supply in Washington and [Oregon stores won’t] have edibles and concentrates. They’ll come over here for the next year and they’ll buy their flower here too.

Your price point will keep customers traveling north to buy marijuana?

We’re waiting for this bumper crop that’s going to be in Washington. You’ll see $20 grams in Oregon, and we’ll have everything at $12 or less. It’s good timing for us with so much nice outdoor crop coming out and it’s looking better and they’ve produced so much of it that the prices are going to be so low. The medical growers won’t be able to keep up with demand.

I hear the wholesale price has doubled in Oregon. They’re paying wholesale at what we sell for on the shelves. They have supply and demand issues. They’re going to have growing pains.

The Vancouver market is bound to contract with Oregon launching sales. How will you ensure your store outlasts the others in Vancouver?

The number of stores isn’t going to contract. There is plenty of market to go around. There was supposed to be 15 stores and there are only 7 because of the moratorium. The pie as a whole is going to shrink because of the Oregonians leaving. There will still be plenty to split up. No one is going out of business.