Washington Retail Landscape Update 2/12/2015

by Dominic Corva, Executive Director CASP

WASHINGTON: It’s been a while since we’ve looked at the progression of I 502 Retail Cannabis landscape, pictured above in the map by Steve Hyde.  The conjunctural interest is driven by our need to understand how fast I 502 retail stores are currently being approved, now that the availability of supply is no longer a barrier to entry. We expected more retailers to open up once this happened, and in the trendline below we see that around January 1, 2015, the pace of new approvals began to exceed the overall trend since July 6.

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There are lots of other factors that influence retail decisions to go into business, of course. The availability of affordable retail space for lottery winners, and subsequent lottery replacements for the 25 retail applicants who for one reason or another failed to cash in on their lottery number, is the most significant variable. This of course is also influenced by jurisdictional bans and moratoria that represent a ceiling on how many of the 334 retail slots can possibly open, even given approval.

It’s also important to note that many “approved” applicants are not yet open, because it takes a little while to open retail doors once approved. As of February 3, 2015, 117 retail stores have been approved. Dozens of that number are not yet open, and we anticipate that their arrival in the market will help clear the harvest bounty. It is too early to say how much.

But one thing we can say with some confidence, is that the flip side to the Producer/Processor glut problem is that prices are down and quite possibly, I 502 recreational stores may be picking up consumers for whom I 502 product is a reasonable substitute for medical access point product, if price of flower is the main obstacle to switching over. Of course, there’s a lot more to it than that, but the closer retail prices for comparable product for comparable consumers (ie, not patients), the easier it will be for I 502 producers to clear inventory.

What’s The Inventory Story? Hard To Say, But Let’s Try Anyway.

Warning: this post contains calculations from data provided by the WSLCB, without contextual explanation for the December 2014 anomalous sales data; and without a clear definition for retail gram volumes given how difficult that is to include concentrates and edibles. The WSLCB has recently tightened their information provision services and informs me that I should have answers from them in a month or two.

by Dominic Corva, Executive Director CASP

WASHINGTON:  The seasonal glut deriving from fall harvest has a lot of I 502 producer/processors worried about how and when to sell built-up inventory. This post uses WSLCB spreadsheets released to CASP on January 27 to estimate current total market inventory, on the one hand, and retail sales data for projecting inventory clearance on the other. Since national media has decided to throw unsubstantiated, alarming numbers around, I have decided that it is necessary to provide the best educated guess I can based on actual data received from the WSLCB.

The graphs above depict the following information gathered in table form below. Let’s take them one at a time.

Retail Volume per lb Cumulative Total Monthly
July 174.52 174.52
August 517.62 343.10
September 1030.77 513.15
October 1737.89 707.12
November 2584.54 1553.77
December 2845.35 260.81

The retail volume data is clearly problematic. The first five months show healthy, even logarithmic growth in the volume of cannabis sold per month. November’s sales more than double October’s, with 1553.77 lbs sold. December’s data, on the other hand, return us to a volume sold that is less than the second month of I 502 retail volume. What should we make of this? On the one hand, we could guess that the way retail volume is calculated changed in December, casting the first five month’s data in doubt. On the other, we could guess that December’s data is off for some other reason. A third option would be to doubt all of the numbers provided.

Tech Mogul Jamen Shively Keynotes “Technology And Your Cannabis Business” Seminar Weds, Aug 27 In Seattle

WASHINGTON: All industry eyes will be on technology-turned-marijuana mogul Jamen Shively, the former Microsoft strategist best known as the man behind premium retail pot brand Diego Pellicer, as he delivers the keynote speech for “Technology & Your Cannabis Business” seminar at Seattle’s ultra-hip Motif Hotel.

Shively’s much-anticipated talk before the elite gathering of Washington’s leading cannabis and technology brands, will reportedly focus on the state of the emerging industry, and how he is providing support to the worldwide cannabis & hemp industry through his new venture, the International Coalition of Cannabis Companies & Organizations ICCCO .

Joining Shively will be Randy Simmons from Washington Liquor Control Board, the agency overseeing Washington’s nascent legal marijuana business; along with John Davis, co-founder and Executive Director of the Coalition for Cannabis Standards and Ethics (CCSE); Patrick Vo, COO, of BioTrackTHC; Dr. Dominic Corva, Executive Director at Center for the Study of Cannabis and Social Policy; Cannabis Training Institute’s Greta Carter, and many other industry thought leaders.

Technology & Your Cannabis Business Wednesday, August 27, 2014, 9:00 AM to 3:00 PM Motif Hotel, Seattle, WA

Technology & Your Cannabis Business
Wednesday, August 27, 2014, 9:00 AM to 3:00 PM Motif Hotel, Seattle, WA

The full-day business seminar, targeting participants in Washington’s legal cannabis industry – growers, processors, retailers and the professional services providers who support them — is being organized by Seattle-based Marijuana Business Association (MJBA), a b2b organization called “the chamber of commerce for cannabis” by NBC News, and sponsored by Cannabis Industry Professional Services (CIPS).  Journalist/Activist Ben Livingston will act as Master of Ceremonies.

“Technology & Your Cannabis Business” is the first in a series of professional education seminars that the Marijuana Business Association is hosting as a service to its members,” explained MJBA chief executive David Rheins. “Earlier in the month, we invited I-502 licensees and applicants to participate in an online policy conducted by MJ Research.  More than three dozen business pioneers participated in the survey. We then invited them to a listening summit, where we conducted a “voice of the customer” facilitated conversation — through which we’ve identified the key industry pain points. Technology — from compliance software to grow-room automation — was at the top of the list. In response, MJBA has organized this professional forum where all the key stakeholders can gather together to work through possible solutions.”

At Wednesday’s show, packaging technology, grow room automation and compliance software are the hot topics. “We’re delighted to have senior representatives like the WSLCB’s Randy Simmons, BioTrackTHC’s Patrick Vo there all under one roof, there to directly engage with end-user licensees to address this critical and time-sensitive issues,” Rheins said.

Tickets are $100 for MJBA members, $150 non-members, and are available online, and at the door.

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