Wellness Connection of Maine
Becky DeKeuster
Gardiner, Maine
My early understanding of the cannabis supply chain was shaped by the San Francisco Bay Area market of the 2000s. For the most part, farmers grew the medicine, and dispensaries … well … dispensed it.
Of course, some dispensaries also chose to grow some — or even a lot — of their own plants. But many of them functioned mainly as community brokers for the sun-grown flowers of the Emerald Triangle, the indoor crops flourishing in warehouses around the state and the plethora of extracts and edible products crafted by specialists throughout California.
In each segment, operators had the freedom to dive deep and truly become experts in their niche. The business relationships translated into a more unified voice when it came time to advocate for political change.
Because vertical integration theoretically reduces the number of “open doors” (transactions from one entity to another through which “excess cannabis” can slip out into the unregulated world), this system appeals to regulators and law enforcement agencies. And so we see newer medical marijuana states, like Maine, overwhelmingly choosing the vertically integrated option.
But vertical integration creates some messy realities that may actually exacerbate the very problems it purports to solve. This is particularly evident when a vertical integration policy is combined with laws that try to restrict consumers to a single source for their meds, as is the case here in Maine.
The expense required to set up a vertically integrated business can pressure small artisans out of the market. Vertically integrated operators would be well-advised to build redundancy into each segment of the business. If a fire or flood takes out all or a portion of your cultivation facility, what is your Plan B? When Wellness Connection experienced a voluntary recall, we were not able to rely on a wholesale market to take up the slack.
Further, the limitations of vertical integration create significant rifts between communities that should be working together to serve patients. In Maine, the challenges of vertical integration are accompanied by restrictions on the number of dispensary licenses, on patients’ ability to source their medicine from a range of providers, and on the amounts of cannabis that legally can be wholesaled between grower and dispensary. (Maine patients must choose either a dispensary or a caregiver, not both; caregivers can sell a mere two pounds of excess product per year to dispensaries, an extremely unrealistic number given the prowess of Maine growers.)
This scenario has resulted in a sometimes-bitter divide between two groups that are set up to compete for market share, rather than to work together on behalf of an improved program for all.
But there’s a middle ground: for example, the state could allow some vertical integration, combined with the option for wholesale transactions between producers and dispensaries. In addition to building in redundancy, this allows dispensaries to offer their clients a range of products they might not otherwise have access to. It also encourages the growth of small businesses, as local providers would have an expanded marketplace for quality products.
And, perhaps most importantly, a mixed approach opens the door to positive relationships between groups that should be, and traditionally have been, natural allies.
Becky DeKeuster is a co-founder and director of education with the Wellness Connection, which operates four state-licensed and regulated dispensaries in Maine. A former teacher, she started working with Berkeley Patients Group in the early 2000s, and credits the compassionate activism of the Bay Area medical cannabis community for shaping her views of the best this budding industry has to offer.
My early understanding of the cannabis supply chain was shaped by the San Francisco Bay Area market of the 2000s. For the most part, farmers grew the medicine, and dispensaries … well … dispensed it.
Of course, some dispensaries also chose to grow some — or even a lot — of their own plants. But many of them functioned mainly as community brokers for the sun-grown flowers of the Emerald Triangle, the indoor crops flourishing in warehouses around the state and the plethora of extracts and edible products crafted by specialists throughout California.
In each segment, operators had the freedom to dive deep and truly become experts in their niche. The business relationships translated into a more unified voice when it came time to advocate for political change.
Because vertical integration theoretically reduces the number of “open doors” (transactions from one entity to another through which “excess cannabis” can slip out into the unregulated world), this system appeals to regulators and law enforcement agencies. And so we see newer medical marijuana states, like Maine, overwhelmingly choosing the vertically integrated option.
But vertical integration creates some messy realities that may actually exacerbate the very problems it purports to solve. This is particularly evident when a vertical integration policy is combined with laws that try to restrict consumers to a single source for their meds, as is the case here in Maine.
The expense required to set up a vertically integrated business can pressure small artisans out of the market. Vertically integrated operators would be well-advised to build redundancy into each segment of the business. If a fire or flood takes out all or a portion of your cultivation facility, what is your Plan B? When Wellness Connection experienced a voluntary recall, we were not able to rely on a wholesale market to take up the slack.
Further, the limitations of vertical integration create significant rifts between communities that should be working together to serve patients. In Maine, the challenges of vertical integration are accompanied by restrictions on the number of dispensary licenses, on patients’ ability to source their medicine from a range of providers, and on the amounts of cannabis that legally can be wholesaled between grower and dispensary. (Maine patients must choose either a dispensary or a caregiver, not both; caregivers can sell a mere two pounds of excess product per year to dispensaries, an extremely unrealistic number given the prowess of Maine growers.)
This scenario has resulted in a sometimes-bitter divide between two groups that are set up to compete for market share, rather than to work together on behalf of an improved program for all.
But there’s a middle ground: for example, the state could allow some vertical integration, combined with the option for wholesale transactions between producers and dispensaries. In addition to building in redundancy, this allows dispensaries to offer their clients a range of products they might not otherwise have access to. It also encourages the growth of small businesses, as local providers would have an expanded marketplace for quality products.
And, perhaps most importantly, a mixed approach opens the door to positive relationships between groups that should be, and traditionally have been, natural allies.
Becky DeKeuster is a co-founder and director of education with the Wellness Connection, which operates four state-licensed and regulated dispensaries in Maine. A former teacher, she started working with Berkeley Patients Group in the early 2000s, and credits the compassionate activism of the Bay Area medical cannabis community for shaping her views of the best this budding industry has to offer.