When we last spoke with Jamie Perino, owner of Euflora Cannabis Dispensary, she talked about the ins and outs of the newly legalized marijuana and the state of the industry. A lot has changed since then, and we are pleased to report that Euflora now possesses its own greenhouse. The cynics of legalizing the recreational drug have largely become a thing of the past, and the industry is evolving into new holistic directions.
“We now have a greenhouse, which is running at full capacity. We can supply all of our stores with our own product, which is pretty exciting because we are able to go through our own quality control and grow strains that all of our customers are clamoring for,” says Jamie. Despite this, Euflora still buys wholesale because it sells so much product. Business is not just good; it is great.
It has proven a good strategy to complement a retail outlet with a grow operation. In 2014, when recreational use of marijuana became legal, one pound went for approximately $2,000 to $3,000. Now, massive grow operations have sprung up of anywhere from 50,000 to 100,000 square feet, and the price of a pound has been driven down to between $900 and $1,400. Operations without their own retail outlets are suffering because of the drop. Euflora counts itself as fortunate to have three stores from which to sell.
Growth seems inevitable for Euflora. Jamie bought a dispensary in Boulder along with a grow operation that is not completely operational yet but will be soon. She is also applying for a license in the City of Thornton Colorado, just outside of Denver.
“They opened up licensing to four in the entire city, and I applied for two of them, which may not come to fruition until early next year. I am also looking to expand into other states as well. A lot of people are also coming here from other states to ask us questions about the industry. We are going to help other states expand, and trying to navigate through our own growth here,” explains Jamie.
When we last spoke, revenues generated from the sale of recreational marijuana were skyrocketing. According to Jamie, the numbers have, in fact, gone up since then. The naysayers finally realize that, after close to three years, nothing truly detrimental has occurred, and many cities and counties within Colorado have seen increased revenue as well as employment opportunities.
“I think a lot of local governments had their feet in the water to watch what develops in Denver, and now they are jumping on board as well. It’s a pretty big thing to be a leader with this, as you are showing the rest of the states that this is a business that can work,” says Jamie.
One significant issue has still not been rectified. Banks are still not open to doing business with marijuana operations. And this makes the handling of money much more dangerous than it need be.
However, many states are coming to Colorado for consultants to help in potentially setting up similar marijuana legislation. This is advantageous to those who have been involved since the inception of legalization, as it grants them an opportunity to expand, grow and get their names out there while helping to legally and properly move the industry forward.
Part of the vanguard of these efforts has been women in the industry. “People are very respectful of the position that women have. We have a lot of CEOs, business owners, and general managers in this industry. We add a softer side to the retail stores with the layouts and the way that consumers are approached. It’s a fresh new approach,” states Jamie.
She says that it is very exciting to see women doing really well and respecting each other. They socialize and help each other out, and it has become a positive experience. It is also a boon to the industry to have so many people working well together and this serves to dismiss pervasive stereotypes about this business.
Despite the successes associated with the sale of marijuana, it has become increasingly difficult to break into the industry. The barrier to entry is extremely high. To buy an existing dispensary with a good clientele and a decent reputation will take $1 million investment. Getting new licenses is also tough going, as most are already claimed. Jamie points out that it is a little more difficult in Colorado than other states that have legalized.
“The cost to hire lawyers, the cost of applications, to find the right location, or hold down rental locations until a license is obtained. You are looking at a significant amount of money to get in, which forces people to partner up and enter into joint ventures,” explains Jamie.
At times, it seems that people are granted licenses due to connections or political motivations. For example in Las Vegas, Clinton’s press secretary and Michael Jordan’s mother got licenses. Jamie explains that it can be frustrating to see that kind of bias, but it is a part of how business works. There must be assurances that people who are getting into the industry have the money to do so.
The sky did not fall, and the state of Colorado is thriving. However, there have been a lot of regulatory changes, making it difficult for retailers and growers like Jamie. It has been particularly challenging for manufacturers of edibles and other marijuana products. One regulation involves putting a stamp with an exclamation point on it to indicate products containing tetrahydrocannabinol (THC).
“I have friends who have had to spend up to $100,000 just to upgrade their machinery in order to stay in business. These kind of changes, in any other industry, will grant a year to transition, but in the marijuana industry, it’s almost like a knee jerk reaction, where we have to respond within three to six months. The timing of it all is very strict, and that’s the frustrating part,” says Jamie.
This means that some products might not make it onto the shelves in time, or prices may increase to cover the costs of the new regulatory changes. It should also be noted that taxes in Colorado are almost twenty-three percent, which makes it difficult for any business with expenses.
Jamie stated that the companies that fail are those that are not staying new and fresh. Distributors must stay on top of the newest products and keep up with what is in demand. Many people now are turning from THC-containing products to those containing cannabidiol (CBD). Thanks to marijuana’s growing legitimacy as a medical option, CBD is starting to emerge as the cannabinoid poised to steal THC’s thunder.
“We have the baby boomers moving in – now that it’s legal – who want to try the CBD. It has become a more desirable solution to pharmaceutical pain pills. Being on the forefront of what’s being driven by our clientele is really important. Places that stay with their old sales strategy and ignore things like edibles and CBD are not going to last,” explains Jamie.
So, what’s new in the marijuana market? Currently, there has been a trend toward crossbreeds with very high THC content. Edibles have really come a long way from the times when people made brownies at home and would have no idea as to the dosage. Now, there are gourmet chocolates, and technology is being applied to edibles as well.
“Instead of it taking one or two hours for an edible to hit your stomach and get into your system before that euphoric feeling is realized, we are meeting with companies that can do it in fifteen to twenty minutes with advanced technology. That is such a game changer,” says Jamie.
The problem with edibles is that it is easier to overdose accidentally. No one has died, but it is possible to get sick for several hours. Because it takes time to feel the effects, people will continue to consume them thinking that the previous amount was not sufficient.
“They are piling on the dosage, and instead of consuming five milligrams, they’ve fifteen to thirty milligrams in their system. It’s too much, too fast. In America, we want it quick, and we want it now. We don’t want to wait for anything, so a fifteen to twenty-minute induction into your system could be huge versus having to wait one to two hours,” explains Jamie.
As for the future, Jamie speculates that Euflora will continue to reinvent itself and stay attuned with what is happening in the marketplace. She plans to donate money to fund more medical research in the U.S. and will carry on educating consumers and interested representatives of other states.
Another new trend on the horizon involves a holistic lifestyle approach to the consumption of marijuana to its health benefits. It can be incorporated with the Eastern medicines, yoga, or acupuncture. “I want to open up a health place that uses marijuana as a lifestyle. You can do it for recreational purposes, but I want people to also see it as something with health benefits as well,” says Jamie.