Washington Cannabis Sales Soar 40% On 4/20 Holiday

WASHINGTON: The April 4th “420” celebrations in Washington ignited retail sales yesterday across the state, according to data compiled by Seattle-based TetraTrak and published on its new MJTicker.com website.

April 20 DataThe unofficial stoner holiday saw many I-502 licensed pot shops offering special sales and promotions, which drove consumption of flower, edibles and concentrates, the business intelligence firm reports.  4/20 brought good news for both retailers and customers according to TetraTrak’s CEO Brian Yauger.   Data published on his mjticker.com shows that a normal Wednesday would usually generate daily retail sales of just shy of $1.4 million; however projected sales for Wednesday April 20th, 2016 were just over $2.7 million, an increase of almost 40% of sales the day before.

Customers benefited as well, with recreational cannabis consumers enjoying lower prices.  On average recreational consumers paid around $9.10 a gram out the door price last month, (approx. $6.65 pre excise tax).  After 4/20 discounts and specials were factored in, holiday customers spent mid $7 out the door ($5.75 pre tax).

TetraTrak’s Brian Yauger: Building Better Business Intelligence Technology

WASHINGTON: Brian Yauger has a game plan for bringing better business intelligence to the legal cannabis industry.  A Texan with Republican political leanings, the former NCAA football coach at first blush seems an unlikely figure to be heading one of Seattle’s hottest canna-tech firms, TetraTrak LLC, but Yauger believes his career as a big time college football coach was ideal preparation.

“Coaching turned out to be the perfect training for running a technology business,” Yauger tells MJNewsNetwork.  “You scout the field and competition, and you hire smart people to coach the positions that are not your strength.  Then you work tirelessly to put together a game plan.  Once you are comfortable with your plan you put it into action and then make adjustments on the fly as the game progresses.  You don’t get too high when things go right and you don’t get too down when things go wrong. You just keep pushing towards the goal line.  I think if you were to replace the words ‘game plan’ with ‘business plan’ and the word ‘adjustments’ with ‘pivots’, it is the exact description of how to run a business.”

Yauger Presents at MJBA Front Runner Seminar in Spokane

Yauger Presents at MJBA Front Runner Seminar in Spokane

Yauger relocated to Seattle in mid-June, 2014, looking to be a part of the Green Rush.  By February 2015 had founded TetraTrak, by opening a business checking account with $4600.  Within 6 months, Front Runner Data dashboard and searchable database Front Runner Data was cash positive.  Growing the company by establishing key strategic relationships with the Marijuana Business Association (MJBA), where he presents the monthly MJ Research Report, and several of its member technology companies, TraceWeed, and PayQwick.

TetraTrak takes advantage of the incredible amount of public data available from Washington’s Liquor and Cannabis Board.  Through its online portal, the LCB makes regularly publishes detailed market and company data, but in hard to consume spreadsheet format. The Front Runner Data service parses all the cumbersome Washington data into an easy to read dashboard and searchable database, so market participants can see who is selling what to whom and for how much.  To add even more value, Yauger and his team of analysts compile the data, add analysis, and publish it out to subscribers for $99 a month.  TetraTrak is currently building out a free service, with near real-time streaming data called MJTicker.com, which is expected to debut in the next few months as an advertising supported offering.

Yauger presenting to Front Runner and MJBA "Striking Oil" Seminar in Tacoma

Yauger presenting to Front Runner and MJBA “Striking Oil” Seminar in Tacoma

Hundreds of companies have already subscribed to his service in Washington, and the company is now raising money, and will use the proceeds of its raise to expand its service to include the legal markets of Oregon, Colorado and Alaska.

Bringing the dashboard to life, Front Runner and MJBA host quarterly professional education seminars called The Front Runner series, targeted panel discussions for licensees. These half-day workshops drill down into the official LCB numbers, parsing the wholesale and retail marijuana sales data into salient consumable chunks. MJBA’s David Rheins then leads panel discussions with the industry’s leading authorities – licensees, subject matter experts, and government regulators – and facilitates audience Q&A. Highlights of these panels are currently made available on YouTube via MJBA’s Marijuana Channel One, with full-length downloads of the seminars, in addition to live webinars, in the works.

“Relationships in the industry are everything,” Yauger explained.  Through organizations like the MJBA we have been able to network with other companies in the industry and grow very quickly.”

Canna-Technologists Adam Mauro, Leaf Logix, Eric Ogden, WeedTraQR, and Brian Yauger, TetraTrak at an MJBA mixer

Canna-Technologists Adam Mauro, Leaf Logix, Eric Ogden, WeedTraQR, and Brian Yauger, TetraTrak at an MJBA mixer

On the print front, Front Runner has teamed with Seattle-based Marijuana Venture Magazine to publish a monthly snapshot of Washington’s cannabis marketplace, and is in development with several other syndicated media programs.

Last week, as MJNewsNetwork was preparing this profile, Fox Sports was in town to profile Yauger. The story of how an all-American jock went from college coaching to cannabis is topical. Sports and cannabis is making national headlines, and trending up the twitersphere these days, with a number of high profile athletes from the NFL, NBA, NHL and UFC calling for the removal of the ban on medical cannabis.  Just last month, Yauger was a featured panelist at MJBA’s “Game On: The Business of Sports and Cannabis,” alongside NBA All-Star Cliff Robinson, and in other ways sees a convergence of his old sports and new cannabis careers.

NBA All-Star Cliff Robinson, Marc Belsher, Sliverback Advisors, and Yauger panelists at Game On: The Business of Sports and Cannabis in Portland

NBA All-Star Cliff Robinson, Marc Belsher, Sliverback Advisors, and Yauger panelists at Game On: The Business of Sports and Cannabis in Portland

 

Buffalo Bills head coach Rex Ryan’s son Payton Ryan will be coming to work for TetraTrak after he graduates from college in May.   “Every football fan is familiar with the Ryan family,” Yauger said.   “The Ryan family is to NFL football what the Kennedy’s, Clinton’s, and Bushes are to politics.  Rob Ryan gave me my start in coaching and was my mentor.  We want to do the same thing with his nephew Payton.”

The cannabis technology field is super competitive, and the business intelligence segment of the marketplace is filled with first rate players.  Denver-based BDS, Washington, DC-based Frontier and Seattle-based Headset only the most prominent of the canna-tech firms seeking to build go-to metrics and analysis for this dynamic new marketplace.  All the competition motivates Yauger to push that much harder, “I work 70-90 hours most weeks, and not one minute of it has felt like work.  Building Front Runner and MJTicker and watching my little company that started out of necessity grow and become relevant in the industry has been so much fun.  I can’t wait to take it to the next level.”

 

MJBA Portland Hosts “Game On: The Business of Sports and Cannabis” Panel 3/2/16

OREGON: At last month’s Cannabis Collaborative Conference in Portland, NBA All-Star Cliff Robinson announced the creation of his cannabis brand, “Uncle Spliffy.”  The announcement garnered a tremendous among of media attention, and served to highlight the many intersections between sports and cannabis.

On Wednesday, March 2nd, 6-8:30PM at On Deck Sports Bar in Portland, Oregon, the Marijuana Business Association (MJBA) will host a panel discussion, “Game On: The Business of Sports and Cannabis.”  Sponsored by CannaGuard Security,  the professional education event will explore the many business opportunities that are manifesting around the intersection of sports and cannabis, including celebrity endorsements; cannabis as a performance enhancement; cannabis as part of a natural, healthy lifestyle; and medical marijuana as sports medicine.

NBA All-Star Cliff Robinson will kick off “Game On: The Business of Sports and Cannabis”  by debuting his “Uncle Spliffy” cannabis brand. Then MJBA Founder David Rheins will moderate a VIP Panel discussion featuring Uncle Spliffy’s Linda MillerMatt Enos, Fore Twenty Golf, Marc Belsher, Silverback Advisory Group; and College football coach turned cannabis technologist Brian Yauger, Front Runner as we discuss exciting business opportunities that are manifesting at the intersection of sports and cannabis.

MJBA Professional Education Seminars are well known for bringing together top players in from the cannabis industry, for the sharing of reliable, actionable business intelligence.

 

Striking Oil: The Business of Edibles, Topicals and Concentrates Is Jan 21st In Tacoma, WA

The Marijuana Business Association and Front Runnerpowered by TetraTrak, have announced their first Professional Seminar of 2016: “Striking Oil: The Business of Concentrates, Edibles, and Topicals.”

The half-day MJBA Professional Seminar takes place on Thursday, January 21st, 2016,1PM-6PM, at the Red Lion Hotel in Tacoma, WA. Hosted by The Marijuana Business Association and business intelligence firm Front Runner, “Striking Oil” will provide I-502 Producers, Processors, Retailers, and industry professionals with an in-depth look at Washington’s emerging marketplace for cannabis concentrates, oils, edibles and topicals.

The legal cannabis marketplace has evolved well beyond the bud, and today Edibles, Topicals, Concentrates and Oils represent the fastest-growing segments for Washington’s legal cannabis industry.  MJBA and Front Runner will kick off the afternoon with a detailed parsing of the LCB sales numbers to date, with forward-looking analysis from Front Runner CEO Brian Yauger.

CannaSol Farms founder Jeremy Moberg will deliver the keynote address, providing his prospective as one of the state’s leading Producer/Processors, and an outspoken advocate for naturally-grown cannabis. He will focus his remarks on the needs for Washington producer/processors to self-regulate.

Exciting new cannabis-infused products and concentrates bring with them a host of new business challenges for our emerging industry, including how to create best practices and common standards for Contaminants/PesticidesDosing and Packaging, and Lab Testing/Quality Assurance.  To provide their insights into these pressing issues and others, MJBA has assembled subject matter experts from Washington’s top cannabis companies to serve as our VIP Panelists.

Leading subject matter experts from Db3 (Zoots) , Mirth Provisions (Legal) , Eden Labs, Cannabis Basics, Avitas, Kush Creams, Mary’s Medicinals, The Goodship, Ethos Extracts, Robotanical, Spot, Integrity Labs, Landrace Labs, Dama, Amoebic Extracts, (and many others) will lead discussions on Edibles; Topicals, Concentrates and Lab Standards.

Industry Thought Leaders Speak at MJBA/Front Runner Seminars

Industry Thought Leaders Speak at MJBA/Front Runner Seminars

Tickets are $99 in advance/$125 Day of Show. MJBA Members and Front Runner Subscribers receive special discount!

Reserve your tickets here:  https://www.eventbrite.com/e/striking-oil-the-business-of-edibles-topicals-and-concentrates-tickets-20114229201?

“Striking Oil” VIP Sponsors include Robotanical, Eden Labs, Cannabis Basics, PayQwick, Avitas and Great Pacific Packaging. .

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Everyone uses cash because banks, which are federally regulated, aren't keen on the idea of getting into business in an industry that is still federally illegal.

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Great Pacific Packaging Vector Logo Horizontal-01

 

The 2015 MJBA/Front Runner Washington Marijuana Producer/Processor Report

By Brian Yauger
Front Runner

WASHINGTON: During its first 15 months of legalization, we have seen sales of recreational marijuana in Washington State grow at an astounding rate of 13% a month. The number of recreational customers has topped 50,000 a day, fueled by a steady drop in retail prices.

The number of both new retail shops and new producers and processors licensees grows weekly. And it is notable that unlike other industries, Washington’s recreational marijuana marketplace is “upside down” in comparison of brands to retail outlets, a situation that has contributed to an overall commoditization of recreational marijuana bud.

The number of licensees increases weekly

The number of licensees increases weekly

There are currently 325 recreational marijuana producer/processors in Washington, most with at least one brand, and many who are marketing under several different bands. By comparison, there are just over active 150 retail stores to accommodate these brands, making the establishment of a brand name more challenging. With such an imbalance of processors to retailers, getting shelf space has become highly competitive and has allowed retailers to set the wholesale price points.

Screenshot 2015-11-27 12.59.23

An abundance of product supply has contributed to steadily lower price points that lead us to the question: has recreational marijuana become a commodity?

Let us first define terms. Webster’s dictionary defines commodity as

  • An economic good such as:

o   A product of agriculture or mining

o   An article of commerce especially when delivered for shipment

o   A mass produced unspecialized product

  • Something useful or valued
  • A good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price

Screenshot 2015-11-27 12.59.36Clearly cannabis is a product of agriculture, and an article of commerce that is currently being mass-produced. Many, especially producer/processors, would not agree that recreational marijuana is an unspecialized product.

Medical cannabis users will agree that mmj is something useful, and all consumers agree that it is valued. In the current marketplace marijuana is abundantly available and the large and growing supply is contributing to increasingly smaller wholesale profit margins. So, with the exception of it possibly being a specialized product, marijuana certainly looks a lot like a commodity.

But what about brand? Does the small profit margin diminish the importance of factors like the brand name?

The importance of brand is the deciding factor as to whether we can call marijuana a commodity or not. Can a processor grow a product that is so good that it can be considered a specialty product? A specialty product is defined as a product that certain consumers will actively seek to purchase of unique characteristics or loyalty to a specific band. Consumers who seek specialty products know what they want and will spend time and effort to get it. They typically will not easily accept substitute products. For example, a particular brand of single malt scotch may be a bit more expensive than other scotches on the shelf. Price is usually not an important factor for loyal consumers who demand specific product brands that match their personal preferences.

So if producers can grow specialty marijuana product of marijuana and establish a meaningful brand, then we can’t call marijuana a true commodity. So has any producer been able to establish a brand name yet? To find out we must look at several different factors.

Recreational marijuana is broken up into four basic groups: flower or bud; edibles; concentrates, including oils and waxes; and topicals. Topicals are just starting to hit the Washington market and are only around a $100,000 in monthly sales statewide.

By definition, since edibles and concentrates are not simple agriculture or mined, do not fit the definition of commodity. The edible companies are also the first companies that have started to build recognizable brands.

In order to look at what brands are recognizable to a majority of recreational users we must first look at what brands are in the most retailers. There are only four processors that were in over half of all the retailers in the state. The top three were all edible companies, Zoots (DB3), Northwest Cannabis Solution, and Spot (Botanical Seattle). BMF Washington holds the fourth spot with 80 retailers selling BMF Washington product. While BMF Washington does sell flower under the name Liberty Reach, they also manufacture the popular oil pens JuJu Joints. In addition, eight of the top eleven processors that are carried by the most retailers are either edible or primarily concentrate brands.

Screenshot 2015-11-27 12.59.44Sixty percent of all bud sold at the retail level in the state is sold in only four counties, King, Clark, Snohomish, and Spokane counties. Spokane County is the only county east of the Cascade Mountains and accounts for 14% of all sales in the state. However, 86% of all flower sold in Spokane County is processed east of the Cascade Mountains. In contrast King, Pierce, and Snohomish County account for 46%. However only 65% of the flower sold west of the cascades is processed west of the Cascade Mountains. Price is a driving factor in the separation of the states product.

The reason for this homogeneous selling pattern is simple: price. With the imbalance of retailers to processors, the retailers are setting the price for flower. King and Snohomish county retailers on average purchase bud on a wholesale level at just over $4 a gram. While Spokane County retailers only pay in the mid to low $3 a gram. This makes it cost beneficial for Eastern Washington processors that have enough product to travel to western Washington to sell for higher wholesale prices. But it is cost prohibitive for western Washington processors to travel east when they can sell their entire product west of the mountains for higher amounts with less travel costs.

As we approach the end of 2015 recreational marijuana is currently being sold as a commodity. However, it may not always stay that way. By July 1st of 2016 all medical marijuana will have to be rolled into the I-502 system. This will grow our current amount of retailers from the mid 100’s to over 400 retail shops within the next year. The WSLCB has also started to raise the canopy for the amount of product to be grown. Producers and processors may now grow 100% of square footage allowed by their tier; this is up from 70% that they were limited to. This will allow processors to grow more products and try to get it into more retail locations. It will be interesting to revisit this subject in November of 2016 and see how the market has changed. But for now, for better or worse, marijuana flower is a commodity.

MJ Research: The 2015 Front Runner/MJBA Washington Marijuana Retailer Report

By Brian Yauger and Joe Armes
Front Runner

WASHINGTON: The story of recreational marijuana’s first fourteen months in Washington state is a story of supply and demand imbalances, with recreational price points impacted by competition from medical and black markets unfettered by high taxation and strict regulation.

By all accounts the first year of I-502 was successful, with retail sales now topping $35 million a month. Still, recreational marijuana only accounts for approximately 30% of the projected $1.3 billion industry in 2015, with the black market and medical marijuana representing the remaining 70%.  I-502 retailers have tried very hard to bring the out-the-door price of the recreational marijuana down to be competitive with the black and medical markets. However, those markets remain robust, in part because they have not been handcuffed by the high taxes and cumbersome regulations put in place for I-502.

Front Runner/MJBA 2015 Washington Marijuana Retailer Report

Front Runner/MJBA 2015 Washington Marijuana Retailer Report

When I-502 retailers were allowed to open in July of 2014, there was a major supply shortage resulting from an inadequate number of licensed producers and processors.  This caused the initial cost of a gram of recreational marijuana to be sold out the door for over $25 dollars, in contrast to less than $10/per gram for the medical and black market consumer.  However, over the course of the year, the number of licensed producers and processors grew at a much faster pace than that of I-502 retailers.  This caused supply to heavily outweigh the demand, as there simply were not enough retailers open for business to accommodate the increased amount of product in the marketplace. Over the course of the year, prices began to drop to under $4/per gram wholesale, allowing retailers to lower their prices to the end consumer.  Retail prices dropped quickly – more than a $1/per gram each month from August 2014 to February 2015 – before they began to stabilize, dropping less than $.50/per gram from February through June.

In June 2015, the average cost of a retail gram of flower was $12.66.  On July 1, a new law, HB 2136, went into effect replacing the existing 25% excise tax at all three levels of I-502 – producer, processors, and retailer – with a 37% excise tax applied at retail.  Producers and processors were no longer forced to give up 25% of their revenue to the state tax system.  The result: wholesale prices dropped 10%, to a low of $3.39/per gram.  Retailers followed suit, and the average cost per gram of flower at the retail level dropped to $9.22, under the magic $10/per gram price point.

The average cost per gram of flower at the retail level dropped to $9.22, under the magic $10/per gram price point.

The average cost per gram of flower at the retail level dropped to $9.22, under the magic $10/per gram price point.

 

The drop in prices starting July 1 caused the first drop in retail revenue since the opening of Washington’s recreational marijuana marketplace.  Dropping from $25 million in June to just under $24 million in July, revenues fell even while the amount of product purchased increased from 4.8k pounds in June to just over 6k pounds in July – thus showing that the drop in prices directly caused the drop in revenue.

The monthly growth rate of recreational marijuana retailers is an astonishing 29.5% a month.  This growth rate, due to an increase in the number of new retail stores opening monthly, will not be sustainable over the long term.  However, we do expect a high growth rate to continue throughout the rest of 2015 and most of 2016, as more recreational retailers come on line, and medical marijuana is integrated into the I-502 system.  Individual retailers have seen an average of a 5.63% growth rate each month.  This equates to each retailer increasing their revenue approximately $10 per day.

While recreational pot sales are robust 7 days a week, Fridays and Saturdays are the highest selling days, averaging just under $1 million sold each Friday statewide and just at the $1 million mark on Saturdays.  Mondays are the lowest-selling day of the week, at just above $600k, while Sunday, Tuesday, Wednesday, and Thursday are hover at ~$800k.  Retailers that are closed on Sunday may be missing out on a decent day of sales, and should consider opening on Sundays.

The number of recreational retail customers has increased dramatically, while the amount they are spending has stayed constant.  We saw a growth from 1,000 retail customers a day in August 2014, to a high of 40,000 customers a day in July 2015.  The average ticket price balanced at approximately $40 a day for several months until dropping to just over $30 a day after the implementation of HB 2136 and the subsequent drop in prices.

The majority of all sales in Washington State are concentrated in only four counties.  Western Washington sells just under three times more recreational marijuana than eastern Washington.  Forty six percent of the weight sold comes from King, Pierce, and Snohomish counties, with Spokane County making up fourteen percent of all sales. The remaining 40% of sales comes from all other counties.

The outlook for recreational market remains strong.  With the medical market set to be folded into I-502 in 2016, we predict that the gap will start to close between the black market and the legal market.  As an added factor of prices rivaling that of the black market, we will continue to see large increases in the number of customers making purchases in I-502 retail stores.

As of early October 2015, there were 182 retail stores recording revenue in Washington. We project that by July 2016 that number will grow to between 288-294 retailers, ensuring that the high growth rate that we have seen will continue into 2016.

The 2015 Washington Marijuana Retail Seminar: Becoming A Front Runner, October 5th in Bellevue, WA

WASHINGTON:  Front Runner (formerly TetraTrak.com), a leading business intelligence resource for Washington’s licensed cannabis industry has teamed up with The Marijuana Business Association, to present: “The 2015 Washington Marijuana Retail Seminar: Becoming A Front Runner” on Monday, October 5th at the Red Lion Hotel in Bellevue, 1-5PM, with a VIP Reception to follow at the hotel bar.

The MJBA Professional Seminar will feature presentations from Front Runner’s  Brian Yauger and Joe Armes, who will provide a comprehensive look at the WSLCB wholesale and retail sales data to date, with an eye toward giving 502 retailers actionable business intelligence to help them build sustainable profitable businesses.

“I want every retailer who attends this seminar to feel that they’ve gotten the value of the ticket price back in the first 15 minutes of the event,” Yauger told MJNN.

Leading Retailer Uncle Ike’s founder Ian Eisenberg will be a featured speaker and panelist. He’ll be joined by an impressive lineup of top retailers including Evergreen Market and The Joint.

PayQwick CEO Kenneth Berke and Green Bits Business Solutions Director Matt Beckley will join Brian Yauger and Joe Armes for a roundtable discussion on retail trends.

Listen to the keys to Romancing the Brand with top executives from Washington’s leading CannaBrands: Zoots, Mirth, Evergreen Herbal, Monkey Grass Farms, Buddy Boy Farm and Sky High Gardens.

Event sponsors include: TetraTrak, Green Bits, Visual Options, PayQwick, CannaVentures and Sky High Gardens.

Reserve your Front Runner spot today. 

Brian Yauger on stage at MJBA Meetup in Seattle.

Brian Yauger on stage at MJBA Meetup in Seattle.

Legal Cannabis Creates Yet Another Spinoff Industry—Wall Street-Style Data Analytics

WASHINGTON: Washington State’s newly legal cannabis capitalists don’t tend to agree on much. Ask any one of them about any current pot-business topic—the regulation of medical marijuana, indoor versus outdoor grows, whether labs fudge pesticide and potency test results for favored clients—and you’ll find yourself in the middle of a passionate harangue. But the more you talk to them, the more they seem to agree on one refrain: However volatile our market might seem, and however much investment capital is sloshing around trying to turn itself into profit, the big bucks haven’t even shown up yet.

As Gordon Fagras of the lab Trace Analytics put it: “The big players are just standing back. They’ll be coming in slowly, picking up the pieces as other businesses fail.” Because marijuana is still federally criminalized and the market is so young, the heavyweight financiers—in big agriculture, big tobacco, big pharmaceuticals, and big alcohol—are biding their time. But when they arrive, cannabis data analysts like Brian Yauger (of the local company Tetratrak) and Jonathan Rubin (of New York–based New Leaf Data Services) will be rolling out the welcome wagon and trying to turn them into clients.

Yauger and Rubin are in the same business, but the contrasts between them are a case study in the different personalities—newcomers and longtime pros—trying to make their way in the new cannabis marketplace.

Yauger is a Texan who coached college football for decades before starting a “green” construction business in Austin that helped commercial properties meet environmental standards by filling their roofs with insulation and coating them with epoxy to reflect solar heat. Then he met, in his words, a “multi-, multi-, multi-millionaire” from the Seattle tech world who convinced him to move up here and get to work analyzing the local pot market.

His business, Tetratrak, analyzes public data and sells information to subscribers. Yauger can tell you the most popular day to buy weed in Washington (Saturday), the number of customers at recreational pot stores on July 12, 2014 (2,188), the average wholesale and retail prices of a gram that month ($15.88, $27.95), the number of customers on June 27, 2015 (21,385), the wholesale and retail prices that month ($3.74, $12.91), the most popular strains in Seattle right now (Blue Dream, Cinex, Dutch Treat), and where the highest-revenue pot shops are these days (in order: New Vansterdam and Main Street Marijuana in Vancouver, Uncle Ike’s in Seattle, Herbal Nation in Bothell).