Part 7: The Retail Explosion

marijuana buds displayed in a Denver dispensary

“Buds? Edibles? Clones? We’ve got you covered.”

I can pinpoint the exact moment I realized I lived in the epicenter of a retail explosion. It was a wintry night, in February 2010. Driving to my cannabis cultivation class, along the usual route down South Broadway, I encountered a phenomenon so startling I screeched to a halt in the middle of the busy thoroughfare: on three of the four corners where South Broadway crosses Asbury, green-neon cannabis leaves now marked the higher ground.

A week earlier, the crumbling blacktop currently hosting Walking Raven Medical Collective, Little Brown House Dispensary, and The Green Depot stood vacant, a deteriorating vestige abandoned by the previous lessors, out-of-business car dealerships. The intersection was reborn, a sightseer’s delight on South Broadway’s burgeoning dispensary row.

In a delicious irony, the shining star of today’s economy has supplanted the mainspring of last century’s economy. Think the owners of these deteriorating lots are glad cannabis commerce saved their ass-ets?

Urban renewal, cannabis style

Little Brown House dispensary, one of Denver's first

Little Brown House Dispensary, former used car lot office, before adding its postmodern, Frank Gehry designed wing.

Faced with the prospect that South Broadway, minus its used car dealerships, was descending into blight, Denver’s Urban Renewal program has been slowly but surely transforming the artery into a pedestrian-friendly boulevard with a treed median strip. In theory, fresh pours of concrete attract fresh mercantile ventures.

Were an ever-increasing number of medical marijuana outlets what the city fathers had in mind to fill the void? Well … extending the antique district was probably closer to the original intent. Alas, in 2010, public ardor for Victoriana lacks traction to fuel a commercial renaissance.

There’s just not that much demand for feathered bonnets and fainting couches.

So, what is there plenty of demand for? It turns out to be dispensaries. And dispensary row seems to be working out for all concerned.

25 in 1

In my “hood,” nobody’s oblivious that twenty-five dispensaries have moved into a one-mile radius with an unprecedented assault on retail hearts and minds. Finally afforded an opportunity to strut its stuff, cannabiz now boasts more storefronts than coffee and wireless put together. This conquest took all of six months.

Was I brilliant enough to predict that? No. Did anyone I know predict that? Er, no. It just sort of happened.

In Boulder, twenty miles to the west, the ratio of dispensaries to pharmacies skyrocketed from 0-16 to 100-16 in the same six months! Even the most fanatical optimists were astonished.

Hundreds of dispensaries have put down roots in and around Denver’s fertile, pro-marijuana — and not just for medicinal purposes, thank you — climate.

Additionally, the previously wilting Classifieds section of Denver weekly Westword has been rejuvenated (ditto for LA Weekly), swelling with page after page of retail cannabis commerce ads: Get your doctor’s note here. Cooking With Cannabis classes here. Rent grow space in a secure warehouse here. Buy your grow tents right here.

Retail history didn’t happen overnight

This explosion is unprecedented in retail history. The Chamber of Commerce is stumped. When have twenty-five shops offering anything — animal, vegetable, or mineral — established root so rapidly in any neighborhood? Retail cannabis commerce, in the form of dispensaries and spinoff businesses, has rearranged the status quo in the Queen City of the Plains.

What’s next, dispensary tours on double-decker buses? Close. The Boulder Bud Cruise operates a single-decker conveyance.

Twenty-five dispensaries in a one-mile radius didn’t happen overnight … although it seems like it.

After Colorado voters passed Amendment 20, Medical Use of Marijuana, in 2000, the seeds for marijuana on Main Street  germinated for the better part of a decade. California passed its Compassionate Use Act four years earlier, in 1996; it took time to boil there, too. What halted the parade of progress?

The delay can be traced mainly to the lack of uniformity in medical marijuana laws. In Colorado, each city was given leeway to apply, not apply, or interpret as it best deemed fit, the medical marijuana laws vaguely etched into the Colorado State Constitution. Counties, too, can add or subtract their own ordinances, though they haven’t yet made their presence felt to the full extent counties in California have. State laws collided with longstanding federal drug laws, creating legal gray areas — and lots of billable hours for pro-pot attorneys to explore the ramifications.

It took time for all those local regulations to work through “the system.” Doctors had to be certified to prescribe cannabis as well. That was another agonizing process.

Finally, in 2009, legalese on a page materialized into brick and mortar dispensaries on a corner.

Regulations were and are even more confusing in California. That’s why it took four years longer for the first dispensaries to appear in the Golden State. No one ever said overcoming the forces of prohibition would be easy. It wasn’t. But activists ultimately carried the day.

A wonderful day in the neighborhood

In Colorado and California, at least, the medical marijuana gods are currently granting wishes to an appreciative — if still incredulous — citizenry. Other MMJ states can’t seem to get out of their own way. I feel for them.

Here’s are some of the niceties on my retail wish list those folks are missing:

  1. In less than five minutes, I can walk to a shop that will sell me the High Times centerfold buds that have been verboten my whole life. I can buy an amount as little as a pre-rolled joint for $10 that I can milk for four days. Check!
  2. I can walk to a cultivation store, where well-trained attendants will instruct me on the most efficacious methods of conducting botany experiments in the comfort of my own home. Check!
  3. People now happily working in retail cannabis commerce establishments are contributing epic cannatax to local, state, and national governments, and public welfare projects are being funded with the proceeds. Not quite!

But an awesome start, nonetheless!

Muscle Beach Medicine

alien looking chicks in dayglo green wigs and boots carrying hula hoops at a Denver cannabis convention

DISPENSARY DOLLS: Members of the Greenland national rhythmic gymastics squad, sporting phosphorescent lichen wigs and go-go boots, cruise the cannabis convention.

The “Queen City of the Plains” isn’t the only horse running the dispensary sweepstakes. The “City of the Angels” has both a head start and a much bigger population base to support its 584 dispensaries in May, 2010 (not for long, if the LA District Attorney’s office has its way; the whole industry is presently in a constant state of flux).

Amidst the familiar sites of Muscle Beach — rollerskating guitar players, the guy juggling a bowling pin, a ping-pong ball and a chainsaw, the Korean-owned t-shirt shops — a dozen or so dispensaries have insinuated themselves into the freakshow. Sandwich-board clad barkers announce to passersby that “the doctor is in,” ready to prescribe like they’ve been there forever.

What does this tell us? It tells us that pent-up demand for cannabis, whether it’s called “medical marijuana” or “the dank,” lies somewhere between vast and infinite. Demand must be met on the retail level.

Cannabis sativa vs. coffee arabica

Can you name another god made or man made good that’s washed over a town like a tsunami? I can’t. Coffee comes closest. But cannabis sativa vs. coffee arabica isn’t really a fair fight. Sure, lots of coffee shops have opened all over the USA — over the course the last twenty years, or since homo americanus discovered java comes in varieties more upmarket than Maxwell House in a can. But a cup of joe still costs around a buck fifty, and a pound of “Holiday Blend” runs you like 12 bucks.

Contrast this with joints [marijuana cigarettes] selling for ten bucks, with pounds changing hands for $4,000 plus. That’s a little more impactful. Where is the ripple effect of coffee? There are no indications that folks are growing, or planning to grow their own beans to trade with friends, or sell the “overgrow” to the Starbucks on Evans and University. There is no commerce in coffee seeds or coffee clones.

So, while coffee shops ring up a buck fifty here and twelve dollars there, medical marijuana dispensaries ring up twenty bucks here and 400 bucks there. All day long. Think some of these proceeds might benefit your community taxed at local sales tax rates? Platte Park could put up a marble post office.

Denver’s Santa Fe art district boasts dozens of galleries in an eight-block strip. Things get pretty vibrant on “First Friday” art walks. That’s a strong retail showing. However, the rest of the month can get a little sleepy. When things get tough economically, non-essential purchases, like fine art, are the first to go; dispensaries are the first place people go to.

If you see it, you will want it

Human Nature 101 dictates that if you can see it, you will want it. Imagine that an actual dispensary has opened in your neighborhood, right between the barbershop and the pizza “joint.” Let’s pretend that, by some coincidence, you already have your state MMJ license. You show your card and your driver’s license and now you’re inside the dispensary, walking toward the sanctum sartori.

Do you think you might possibly feel a sense of longing, an emotion preprogrammed into the human psyche, when you’re staring, popeyed, at twenty succulent strains of ganja, freshly manicured, dripping with trichomes and crystals, artfully arranged in a jewelry case, competing for your affection like puppies in a pet shop? Ya think?

Where am I going with this? It’s true that if you don’t like tobacco, it doesn’t matter a whole helluva lot if five or fifty cigarette shops move into your neighborhood. But, if you never tried tobacco, wouldn’t you want to know what all the fuss was about?

Passing spinoff shops arouses more curiosity. It’s hard not to notice all the cultivation shops adding sparking the firestorm. Their success has forced the Home Depots of the world to carry an extensive selection of grow lights and fertilizers.

Basically, the public has demanded plenty of convenient outlets to indulge its insatiable appetite for cultivating and consuming cannabis.

Wish granted! For now.

Gonzo for ganja

Compare this previously unheard of availability, and the craving it inspires, with the wish to procure a sight-unseen strain from a friend of a friend, for a one-time buying opportunity. That’s the Neanderthal modus operandi which defined the ganja acquisition process until a year ago — and remains the model transaction outside of the semi-enlightened (if they were really enlightened, they’d go completely legal, adding recreational and industrial use to the menu) communities which license dispensaries.

In communities with dispensarie, the cannabis purchasing process has become simplified to the point it’s as painless and mindless as buying Rice Krispies at King Soopers.

Got a hankering for a particular strain?” There’s every chance one of your favorite potspots will have it. You can select your strain (I almost said “brand,” but that’s still to come) from a dispensary’s display of sativa and indica, just like you can pick your favorite single malt from a liquor store’s stock of highland and lowland Scotch. Civilized.

What does all this mean in terms of cannatax? One meaning is clear: underestimating how gonzo for ganja earthlings have become is a colossal mistake. In the retail sector, it’s pretty much all onwards and upwards — or it would be localities and states just counted the cannatax and left well enough alone. There’s another economic indicator that could go on a serious upswing, if [copy and paste the second half of the last sentence].

The retail explosion creates jobs that we really like

There are “job” jobs; then there are jobs that we really like. Some jobs put food on the table. That’s generally helpful. Then there are jobs that uplift us and make us feel more alive. Those are a lot more helpful.

In his campaign, President Obama talked about creating millions of green jobs in the alternative energy field. Haven’t heard much about those lately, have you? But I’m always discovering new and different avocations in the cannabis industry, from budtenders to ladybug ranchers — apparently the orange assassins feast on spider mites which plague indoor plants.

By and large, people working cannajobs seemed pretty jazzed they’re working the marijuana field. That said, financial markets value the number of jobs that are being created more than the quality. They distinguish between “new jobs” and “job shifting.” So, which category do cannajobs fit in?

The big question is, would the same people be working at Jack-In-The-Box flipping burgers if they weren’t working at The Kind Room rooting clones? If so, according to economists, that would be “double counting” the same jobs. They’re entitled to that unemotional viewpoint, but I aint buying it.

I see things a little differently; I say, jobs that we really like should count double. Maybe Einstein had that in mind, when he said:

Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted. —Einstein

Conclusion

I’ve set out to cover the full spectrum, the entirety of the 2010 pot phenomenon, above and beyond survey results and seizure statistics, in an effort to identify all the variables that factor into calculating cannatax. The higher the figures, the more persuasive the figures. Figures to persuade who to do what? Figures that persuade politicians to get off the fence and push through legalization. What else?

What does the retail explosion have to do with persuasive figures?

Let’s envision the Bay Area, LA, and Denver as test sites for cannabis commerce. Think of everything that’s happened in the last year and half as one big “product launch.” In those terms, it’s pretty hard to dispute the preliminary results from the test markets.

We’ve got ourselves a hit product here.

At the end of Part 6, our running tally of cannatax stood at $67 billion. In response to the overwhelmingly positive response in every retail market cannabis has been tested, we attach the value of +10%, or $6.7 billion, boosting our forecast to $73 billion.

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The retail explosion is an example of a market segment finding a natural equilibrium.

But there’s another factor at play. This one’s highly calculated. It’s conceived and executed by master psychologists who know everything about persuasion. It’s a rare triumvirate of advertising, marketing, and publicity power rolled into one unrelenting, inescapable, hypnotic force. This all-pervasive force is already championing the cause for free! What could it be?