STORES Convention Daily - 2018 Big Show Day 1 - 18

2018 SUNDAY

18

From the Black Market to the Corner Market

A

s more states move toward legalization, marijuana is quickly
becoming a legitimate and viable
industry. From the farms and labs to the
countertops and backrooms of dispensaries, the retail industry is in the midst of
a rare transition where a lucrative blackmarket product goes legal and mainstream.
Many industry experts say that within
a decade, the federal government will remove marijuana from the list of controlled
substances, at which point they believe
there would be exponential growth within
a few years.
The cannabis retail market is already
thriving in the states where it is legal, and
thousands of dispensaries are moving
billions of dollars worth of the product
every year. While the basic retail principles may be the same, their products
are anything but ordinary and come with
red tape, big risks and operational challenges. Until big national players move
in, the industry is largely being driven by
ambitious, risk-taking entrepreneurs and
private investors.
Medical marijuana use is currently
legal in 29 states, and recreational use is
now legal in Alaska, Colorado, Maine,
Massachusetts, Nevada, Oregon, Washington and the District of Columbia. As

California officially legalizes recreational
"adult use" sales this month, the state
becomes the largest legal market in the
world. A study by the University of California Agricultural Issues Center forecasts
more than $5 billion in sales in the state
in the first year, and a recent report from
Marijuana Business Daily estimates the
national market will grow to nearly $17
billion by 2021.
Support for legalization is also at an
all-time high, and a 2016 survey from Gallup revealed that 13 percent of U.S. adults
said they used it, up from only 7 percent
in 2013. The retail cannabis industry is
already well-established; according to
Marijuana Business Daily, the average
dispensary produces an annual revenue
of $974 per square foot.
LivWell Enlightened Health is one
of Colorado's fastest-growing cannabis
chains with 14 medical and recreational
store locations. Dianne Brown, LivWell's
senior director of sales, says the company
operates like any other retailer, aside from
compliance issues. LivWell carries a wide
array of products, markets the items and
brand online and aims to serve with superior customer service.
"Just like any other retail business,
success is based on understanding your

LivWell Enlightened Health in Colorado bills itself as "more than a dispensary."

customer," Brown says. "Who they are,
what their needs and pain points are and
how to design the store to create a comfortable and easily navigable shopping
experience."
The market is comprised of far more
than "smokeable" product: While raw
"flower" remains the most popular segment, there are also concentrates such as
wax and edibles that can include every-

thing from baked goods and gummies to
pills and tinctures. Brown says another
growing category is topicals, which include lotions, creams, bath products and
patches. And even within the products
themselves, there are hundreds of strains
with varying levels of active ingredients
that can produce varying effects.
See "Cannabis" on page 30

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Table of Contents for the Digital Edition of STORES Convention Daily - 2018 Big Show Day 1
