The Clinch On Cannabis: Immature Industries Eventually Grow-Up

By Beau Whitney, Whitney Economics

The cannabis industry is still taking shape. Legislative and regulatory policies can have a profound impact on the direction the movement takes. There are many academic sources available, but what differentiates this report from others is that this author is able to combine economic rigor with direct industry experience.  The author has a background in economics, experience in high tech business operations as well as a background in the cannabis industry as a chief operating officer, a governmental affairs officer and a compliance officer. These practical experiences in the cannabis industry has further enabled the author to take the next step and assess the impact policies have on the industry and to make policy recommendations to address them.

Front Runner, an agglomerated cannabis data website, commissioned Whitney Economics to conduct an analysis of the Washington cannabis market. The initial genesis of the project was to ascertain whether or not the 222 additional retail outlets proposed by the Washington Liquor and Cannabis Board were an appropriate number based on the BOTEC analysis.

Once the research commenced, the project extended beyond the initial scope and examined such topics as; the total demand forecast for the market, the total supply available to support the market, the elasticity of demand, taxation and how to maximize the conversion from the black market to the retail market. The data used in this report cites multiple sources, includes original analysis and forecasts, as well as data taken directly from the Washington Liquor Control Board (WLCB) and BioTrackTHC. The empirical data was analyzed and the findings contained herein are an interpretation the impact of policy decisions have on the Washington cannabis market.

The data assesses the empirical results from January 2015 through March 2016 and extrapolates into the 2016 fiscal year and beyond.The methodology was to examine specific aspects of the market to ascertain if the Washington market was able to be sustained at the proposed retail levels, whether the current policies support the development of the market, what policies need to be changed and what indicators to examine moving forward.

The conclusions derived from the data were meant to answer questions about the market that are fundamental to the foundation of economics. For if the data cannot support the most basic fundamentals of economic theory, then the data or policies must be viewed with skepticism.

The findings of this report are simple. The consumer is extremely price sensitive. The black market plays a large role in the marketplace and without a reduction in tax, the market will not realize its true potential. The level of demand is able to support the retail expansion, but without converting the demand over from the black market, the retail system will face challenges in growth. The allocation of the retail outlets can support the demand, but the allocation by county needs adjustment. The supply of product in the market is appropriate for now, however the amount of supply capacity is well in excess of what the market will bear. This, in turn will lead to further commoditization of prices, compression of retail margins and maintain a vibrant black market.

The insights contained in this report are much more applicable to an investor, a policy maker or a regulator than many previous works and that is what differentiates this report from others currently available.The report also provides a list of indicators to track on a regular basis that will allow the investor or regulator to ascertain the health of the industry and the success of the public policies as they currently exist.

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Scott Berdell, Stryps Pre-Rolls w/Hash Oil, The Front Runner Data Interview

WASHINGTON: Front Runner Data, a leading provider of business intelligence to Washington’s legal cannabis industry, sat down with Seattle-based pre-roll maker Stryps.

Enjoy this insightful interview from one of Washington’s pioneer legal cannabis producers, Scott Berdell, exclusively available on Marijuana Channel One and MJNewsNetwork

[youtube http://www.youtube.com/watch?v=bkG7Hbf3acE&w=560&h=315]

 

 

 

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.”