How small time caregivers have influenced the cannabis industry in large ways and why consumers chose them over big dispensaries.
Maine is known for its strong comradery between neighbors. It is a state that relies heavily on small businesses, being the home of craft breweries, quaint coastal restaurants and all. There is a sense of “we’re all in this together”... Atleast, most of the time. Right now we are on the precipice of Marijuana legalization and stakes couldn't be higher, one clear divide in the community shows; the battle of storefronts vs. dispensaries.
Noting the differences between storefronts and dispensaries was once easy. However as time has passed, the market has evolved, dramatically changing the landscape of retail cannabis shops. Traditionally dispensaries operated under separate guidance compared to storefronts. While both serve consumers the meds they need, their structure varied greatly. Dispensaries were known for operating in greater scale with no plant counts. They were limited to a single store per Maine Department of Health and Human Services Public Health District and also had to be registered as a not-for-profit business. Eventually law makers converged and allowed dispensaries to go “for-profit”, all whilst adding six dispensaries across the state. Change happened overnight wherein many of the new licenses were swiftly awarded to pre-existing participants in the established dispensary market-share.
So what's the difference from a storefront? While under a legal microscope there are fundamental differences, in the current state of cannabis both storefronts and dispensaries operate at similar standards.
So where's the conflict? For a long time caregivers were barred from opening storefronts like the ones dispensaries have. This made access to medicine harder for consumers. Often seeking out a refill, patients were forced to meet caregivers in parking lots. Business hours were decided loosely day by day, with no set schedule in place and the concept of menus was non-existent in the formal manner that exists now. The lack of professional standing and access to knowledge and choice for the consumer drove many to the doorsteps of dispensaries. The experience of dispensaries was honed to a shine. There were convenient ATMs, budtenders with a name tag and a smile awaiting you; the shop was open when you expected it to be and with a clear menu and competitive pricing, you felt like you were walking away with the right choice in medicine.
So…. Why would anyone go to a caregiver? First things first, times have changed. While looking beyond the fact that Maine LOVES small businesses, acknowledging the notion of supporting small businesses alone is an important aspect to many seeking cannabis. But above all, you can not mention cannabis without noting its quality. Like almost everything in life, with scalability comes a lot more responsibility. Quality is the first thing to suffer when scaling up, even more so when the scale up happens to be rapidly pushed by a change in for-profit law. In contrast to this, caregivers have been studying the craft at a small scale for many years. Without fail, most have perfected the end product while balancing the scales of income and passion. For dispensaries the scales are heavily tipped towards income; a business derived focus practiced by most major corporations. The end goal is always three-fold: to scale efficiently all whilst maintaining high margins and increased production and output. With the cannabis industry being as immature as it is, finding someone well trained enough to run a facility the size desired by dispensaries is slim to none; a large factor leading to the drastic fall in product quality. Disregarding the most important parts of the consumer experience, the will to maintain a certain level of output regardless of any other circumstances is at the forefront of all decisions. To maintain flourishing profits most if not all overhead is addressed and cut. Leaving all cash-flow for personal gain all whilst limiting risk leads directly to decreased incentives for innovation. Pheno hunting and experimenting with different nutrient lines, lighting options and other growing techniques are all inherently risky. Avoiding risk and with a lack of competition removing the need to exceed and innovate, mediocrity is accepted and normalized. However, in contrast, as the caregiver market-share has become increasingly competitive, these small-businesses are forced to become innovative and unique to survive and garnish patrons. This is a struggle and motivator that dispensaries haven't had to do until now.
Naturally many dispensaries have seen caregivers as a threat for a long time. When caregivers were given the greenlight to open storefronts this only increased the concern among dispensaries. One thing dispensaries have had over local conglomerates is capital. But, the tables have turned and dispensaries are now feeling the financial stress. We have reached a point where the kings of the market can no longer expand as they once wished. With limitations of funding via investments, large-scale dispensaries, yearning to ever-expand, have become stuck trying to find the money they want and subjectively need. Recently, Wellness Connection sued the State of Maine over the defined residency requirement in regards to funding. The law, which barres out of state companies from ownership of more than 49% of an adult use cannabis company poses a universal threat to corporations that seemingly never want to stop expanding. Matthew Warner, an attorney at Petri Flaherty who is representing Wellness Connection said “We as an industry can’t work within the confines of the residency requirement” … “We still don’t have the money we need to execute our business plan”. Wellness Connection board member Ron MacDonald was paraphrased by WGME, saying that the company needs more money to increase its production capacity because it cannot buy additional automated weighing and packaging equipment. This statement makes little to no sense and what puzzles many is how can these statements be even remotely factual. How can these well known and well visited, high-margin organizations be struggling so much that they need over half their funding from outside of the state they conduct business in. Is their business, their business plans and their product so misaligned with the process working for vastly smaller caregivers? If something doesn't work, if the business is failing and more money is needed, dispensaries in Maine are seemingly neglecting to look within, instead, placing the burden on Mainers and whining about “unjust” laws that hamper their expansion and monopoly. Here is some food for thought. Is Maine’s law preventing an absolute market takeover that the dominating dispensaries want, or is it the service and product; the general experience, that is disappointing investors and chair-holders. I look at their Weedmaps and scratch my head. To me the answer is quite clear.
Host of the Maine Potcast