We were recently invited to dinner by a couple that was just getting licensed and they claimed they wanted advice. They had yet to establish a brand, stable strains or even retail contacts. When we suggested they go the bulk or wholesale route before diving into the direct-to-retail pool, they responded like we just didn’t understand how much better they would be at this than the rest of us.
Growing up there was term we used for those that haven’t been in the trenches but tell you how to navigate them — “chute rooster.” That’s the guy sitting on the fence telling the guy on the bull how to ride. There are a lot of chute roosters in this arena.
Business is done a bit differently in the regulated cannabis industry than any other business I have conducted. I suppose that should be expected as we are among the first people in the world to legally grow and sell cannabis, but it does take some getting used to.
Here are a few examples.
Sales contracts are common for most businesses, but just do not exist in my world as a legal seller of cannabis. Buyers are not interested in locking in a quantity at a price they believe might fall in the near future. Our rules currently state that wholesale prices offered to one must be offered to all with no volume discounts, but that is not being enforced. So new rules are in the works to allow for volume discounts, as long as they are offered across the board. This will likely hurt the smaller growers and retailers who don’t have the cash flow to play in a volume game.
And since all cannabis transactions in Washington are public record, that poses a unique reality not found in other industries. Imagine if all businesses could log into a website, compare wholesale prices of their competitors and see who’s buying from whom and in what volumes. We can in Washington and it feels very “Big Brother-ish” to me.
Before the legal, recreational market opened, edibles and oils tasted like cannabis. Now, the goal seems to be to take out the natural flavors and replace them with watermelon or bubblegum. I believe cannabis products should taste like cannabis. If regulators are concerned about underage use or over-consumption, they are not supporting that goal by allowing THC products to taste like candy. It reminds me of what happened in the food business. It is no secret that the food industry has been controlled by Big Ag for quite some time and that has led to produce lacking in taste and nutrition and being dependent upon pesticides. Many folks are now leaning toward minimally processed organic foods and it is catching on with restaurants and stores sourcing locally grown fruits and vegetables. So how about we just skip the trend toward Big Cannabis and support the smaller growers now?
As we nudge into our third year as a licensed producer and processor, I continue to observe, adapt, and pivot. It’s still about moving weight and conducting business, but not necessarily as usual. Cannabis for the masses is evolving quickly and I’ll be an eager student until the end.