Business Archives - Page 33 of 34 - The Real Dirt with Chip Baker

Cannabis Retailers Compete in Denver: Survival of the Fittest

by The Real Dirt | Jul 10, 2017 | 420 News, Blog, Business

Colorado’s cannabis industry hasn’t fallen short of record breaking, even three years after the first recreational sale. In fact, the industry continues to grow, surpassing the previous revenue records each year.

In the month of March, Colorado hit another record for the highest amount of revenue collected from licensed cannabis retailers, according to the publicly available state sales tax data, at $131.7 million. The Colorado Department of Revenue announced that they collected a hefty $22.9 million in tax revenue during the month of March alone.

Denver, the state’s Capital, is the most populated city in Colorado, home to a whopping 5,540,545 people in the 2016 consensus, according to the U.S. Census Bureau. Naturally, this means that Denver has the highest concentration of cannabis retailers in the state, hosting roughly 400 of the 698 licensed businesses in Colorado.

Cannabis Retailers Compete

With such a large concentration of licensed cannabis retailers in the city, what does this mean for competition? For some of the larger brands, it doesn’t mean much. To smaller business owners, it is becoming much harder to compete with the established brands, and many owners find themselves selling their licensed businesses.

MJBizDaily interviewed the owner of cannabis dispensary 3D Cannabis Center, who went from worldwide media attention for the state’s first legal recreational sale in 2014, to selling her once widely recognized business for $2 million because of the fierce competition.

Many smaller “mom and pop” dispensaries have started to see a decline in sales, even though the state continually hits record high sales numbers. The smaller businesses are especially hurting with the rapid growth, as the prices for licensing, application fees, utilities and rent continue to rise.

colorado cannabis retailers compete for the best marijuana

Overcoming Obstacles

Another hurdle for competition among the industry is the limited advertising ability for cannabis brands due to the strict state laws. Alas, that has not hindered ads through outlets such as print magazines, radio stations and events, which target a large portion of the Denver population – millennials. Larger companies usually pay to have their brand front and center on a full page ad, or on the front cover of magazines, while smaller brands may only to be able to afford a quarter page ad, if any at all.

Some smaller companies may not have the supply or resources to be able to offer discount coupons, aimed at bringing in more business. You will often see larger brands offering product discounts such as 15% off for first time customers, making it extremely hard for smaller companies to compete if they cannot offer discounted products.

Many companies have now come up with a reward system for customers, marketing directly to their phones or email addresses. Businesses have to come up with extremely creative ways to market their products, because there is a good chance another competitor sits just a few blocks away.

Denver has seen so much growth in cannabis business that they have put a moratorium on new store fronts and cultivation centers, in hopes that they can slow down the competitive industry, and focus on responsible growth.

Cannabis Laws in Colorado Tighten: Do they Limit Industry Success?

by The Real Dirt | Jul 5, 2017 | 420 News, Blog, Business

New cannabis laws and regulations are stacking up in Colorado, making it difficult for the industry to operate. While regulations are effective, many businesses are suffering.

In 2012, Colorado was the first state in America to allow adult use of cannabis consumption through Amendment 64. Since the Amendment was adopted, cannabis laws and regulations for adult use in Colorado have continually become more strict, almost aiming for a failure of the industry as a whole.

Cannabis laws change constantly, sometimes overnight, and some business owners cannot keep up. When adult use was enacted, dispensaries did not have the harsh regulations like they do today. In fact, there were minimal limitations on how much product you could purchase at once as a consumer, which type of pesticides you could use to cultivate, and who store owners could receive their supply from.

Not So Wild West

Since Amendment 64 passed with such a short timeframe to enact the encompassed cannabis laws, there weren’t many limitations set forth that hindered a successful business. If you are new to the cannabis industry, you may not be familiar with the “Wild West” days from 2012 that ultimately gave small business owners a large chance for success, setting forth their own unique standards.

Since the success of recreational legalization, the Marijuana Enforcement Division (MED) has continually come up with harsh, almost unrealistic expectations for compliance within the industry. One of the regulations, enacted with HB 1284, is that business owners must track every plant in their possession from seed to sale, and report those numbers daily through a software system known as METRC. If businesses do not track every seed and sale through METRC and confirm each night before closing, they could risk having to shut down their entire business.

That said, many of the POS systems used in retail stores to track the cannabis sales have a track record for crashing, which does not allow for business owners and managers to be able to track the sales if they choose to allow them while their systems are down. This sets businesses up for failure either way – whether they choose to allow sales or halt sales until the system is restored, which can cause a huge monetary loss depending on the time of day.

Cannabis Laws Hurt Small Business

As for applying for or owning a cannabis business license, the process has become so extensive (and expensive) that most small business owners cannot afford to continue renewing their licenses and are forced to sell their stores or go out of business. Currently, licensing fees can run upwards of $15,000, depending on how many licenses are being applied for and in which city. This does not even include the price of rent, which can be quadruple the base price of rent in Denver, specifically to cannabis businesses. The rent increase includes cultivation facilities and infused product manufacturers (MIPS) as well.

Additionally, these locations now cannot be within 1,000 feet of a school, daycare facility or rehabilitation center, and in some cities, another cannabis business. To date, since these new cannabis laws have been enacted, there have been about 50 cannabis businesses that have received a letter from the MED to close their doors due to being too close to one of the “off limits” facilities. In addition to the strict location laws, the State of Colorado has more recently adopted very strict pesticide laws for cultivation centers.

When the State updates their regulations, it is uncertain whether or not they will alert the public, or give you any timeline as to when these new cannabis laws will be enforced. If the MED randomly audits your facility and detects any “off limits” pesticide particles in the air, even if they have been discarded due to new regulations, they will issue a violation, destroy every plant in the facility, and cause the business owner an exorbitant loss of product.

New Laws, New World

Most recently, Green Man Cannabis was forced to destroy every plant in their facility as the MED found “residual particles” of illegal pesticides in their air system – pesticides that were legal to use shortly before the incident had occurred. The rules enacted by the MED seem to be aimed at daunting the success of cannabis in Colorado – but as we remain compliant and law-abiding, their restrictions cannot stop the ongoing success of this industry.

How Greg Gamet Became a Cannabis Business Legend

by Travis C | Jun 28, 2017 | Blog, Business

In 2008, Greg Gamet walked into Cultivate Colorado to buy his first set of grow lights and equipment. Eight years later and he is a legend in the cannabis industry, and a pioneer in the world of legal cannabis.

What started as a small grow in a basement evolved into one of the first cannabis businesses in Colorado. While his Dank Dispensary thrives, Gamet has pushed the envelope further with his other businesses including a consulting firm, a child-safe cannabis storage company and the creation of CannaScore, a revolutionary cannabis compliance software.

Godfather of Legal Cannabis

Greg started growing cannabis in his basement prior to Colorado’s legalization initiative, which put him in a prime position to make a move on the new industry upon the eventual passing of Amendment 64. If anybody knows firsthand how to handle the ever-changing laws of the Colorado cannabis landscape, it is Greg Gamet.

At the beginning of his journey into the recreational industry, Greg was faced with the hardship of being one of the first to apply for permits and licenses through the city of Denver. While warehouses were being bought left and right by others in the industry, Greg took his time to learn the regulations and changes he would need to make to be more successful than those jumping in head first.

Regulation and Growth

While the industry was growing and changing constantly, the vast amount of grey area within the regulatory system began to grow as well. While many were tempted and went for the easy way out by taking advantage of the flawed system, Greg and his team never ventured away from, “It’s probably legal.”

The financial issues that arose from his endeavor led to Greg eventually reaching out to potential investors for aid. And as those who were compliant came together to grow the industry through mutual partnerships, the industry began to normalize. Greg described it best, saying, “It’s above board now. You can have a conversation at the bar while you’re drinking your beer at a normal, normal level and not worry about somebody overhearing you and getting turned in, because you have a home grow. So, the knowledge started sharing.”

Diversifying Cannabis

After establishing a foot-hold within the industry, Greg branched off from growing to start Kush Bottles, a regulated, child-safe cannabis storage container company in California. The creation of Kush Bottles led to the eventual creation of and joining with the Denver Consulting Group, a major player in the current cannabis compliance field.

With the two companies now together, Greg and his team helped local dispensaries and others become more compliant, whether with building permits and limitations or aiding in the design and compliance of packaging.

Today, Greg Gamet spends his time travelling around to various conferences and speaking at panels as an expert in the cannabis industry. What started as a landscaping job turned grow-op in his basement has evolved, branched out, and grown into a far-reaching name that is known throughout the industry.

Expanding Horizons

Greg’s next venture is Gold Flora, a massive operation in California with over 600,000 square feet of cultivation and manufacturing space. With a new recreational market rapidly growing and facing road-blocks in the golden state, Greg is ahead of the game in regards to research.

With his already vast knowledge of the recreational industry in Colorado, Greg’s experience will be a welcomed relief to those struggling to combat the strict new regulations facing California’s cannabis entrepreneurs. Denver Consulting Group has also expanded its reach to the west coast, bringing the industry knowledge of the some of the biggest players in the legal market with it to cover Greg and his ventures.

A Legend

The legal cannabis landscape is constantly changing. The pressures of state and local governments as well the ever-looming federal status of cannabis makes being an entrepreneur in the industry all the more stressful. People like Greg Gamet are the silent saints of the cannabis industry, the knowledge and experience he carries creating the path to success for many that have come after him.

It would not be an overstatement to say that Greg Gamet is one of the leaders responsible for the major growth and expansion of the recreational cannabis industry, and he will continue to the lead the industry for years to come. Greg is every cannabis entrepreneur; he started in his basement and saw the opportunity to grow his business as the laws changed. He faced the hardships when they started, so those that try to become part of the booming industry now no longer must face them alone.

Hemp – From Illicit to Internationally Used

by The Real Dirt | May 12, 2017 | Blog, Business, Science & Technology

On a trip to Amsterdam around a dozen years ago, I was overwhelmed by all the hemp based products they had on offer, the icing on the cake being a digital scale that was made of hemp plastic. When I mentioned it to the clerk, he remarked, “Even the lucky grower has his grow room made entirely of hemp these days.”

A hemp powered history

The earliest traceable examples of hemp fibers being used, go back twelve millennia where early Chinese people used hemp. Development of hemp in pottery, clothing, ropes, and early versions of paper followed for thousands of years. In this time the healthful, medicinal and recreational elements of the plant were being explored as well. Some have even theorized that it’s psychotropic qualities are what helped Cannabis sativa make its migration west to the rest of the world.

As humanity took to the sea, hemp was there, billowing in the sails and hauling up the anchor. Hemp was with Columbus as he opened European eyes to a larger world. As Ben Swenson noted, it is “estimated the English fleet that defeated the Spanish Armada in 1588 donned 10,000 acres of cultivated hemp” in it’s sails.

We have all seen a dollar bill with the cartoon bubble “I grew hemp” stamped over Washington’s mouth. Which in fact he did, as just about every other smart agriculturist of the day. Virginians were even at one point allowed to pay taxes with hemp. In the 1930’s, Henry Ford began to experiment with plant based plastics in his effort to blend agricultural raw materials into industrial applications. Amazingly, his plastic car prototype of 1941 had panels made of soybean and hemp and was even designed to run on a hemp based fuel.

So what happened?

The dreaded “Marihuana Tax Act of 1938” put an end to all cultivation of Cannabis Sativa. Since then, proponents have vigorously demonstrated that certain strains and styles of horticulture provide us with plant almost devoid of THC. Any serious article you read today about industrial hemp or hemp food production feels the need to add the caveat that “this will not get you high”. This stigma and lack of understanding has been nearly impossible to shake, but now that attitudes and laws towards recreational cannabis use have shifted, so have attitudes to all uses of the plant.

Hemp’s place in technology

Hemp has continued to prove its usefulness in some high tech spheres. The BMW i3 which shaved 10% of it’s weight using hemp plastics over other low weight materials. In home and building construction use hemp can be used a cheap and light insulation material, a particularly “green” material as it can be made with the leftover material from hemp processing.

In the world of super capacitors (think: fancy and fast batteries) hemp has been found to be a cheap and viable alternative to graphene which is, as described at asme.org, “a carbon nanomaterial, is considered to be one of the best materials for supercapicitor electrodes. Graphene is, however, expensive to manufacture, costing as much as $2,000 per gram.” Whereas “a process for converting fibrous hemp waste into a unique graphene-like nanomaterial that outperforms graphene…can be manufactured for less than $500 per ton.”
Hemp plastic is also being deployed in the exciting new technology of 3D printing, providing a strong and light finished product used in biodegradable packaging, sunglasses and even drones.

What’s the future of the emerging hemp industry?

In the present of climate of legalization and progress some innovative new services and products are beginning to emerge. The International Hemp Exchange is,“a platform for buyers and sellers of hemp goods and services to connect and transact.” Basically, it’s a digital marketplace for all things hemp. While another company, Pure Hemp Botanicals, is purporting to have a new process to be able to economically process and refine multiple different parts of the hemp plant. Hemp refineries take in whole hemp plants to produce the intermediate products and chemical building blocks for manufacturing countless consumer and industrial products. Just the fact that two such services have opened their doors is a huge boon for the hemp industry.

Whole plant hemp extracts are a new development in the health and wellness industry. Hemp provides a high source of protein, omegas -3 -6 -9, linoleic acid, gamma linoleic acids (GLA). Not to mention the 85 cannabinoids which have been identified by the US Government (of all groups!) as neural protectors. Even Joe Rogan eats this stuff everyday.

The future of Cannabis Sativa is varied and exciting. Everything from body lotion to cars to nanotechnology are within hemp’s scope. As we grow, so the industry grows, so does the diverse application and appreciation of this wondrous plant. In the words of the late great Bill Hicks, “It grows naturally on our planet, serves a thousand different functions, all of them positive. To make marijuana against the law is like saying that God made a mistake!”

How to Build a Grow Supply Empire

by The Real Dirt | Feb 21, 2017 | Blog, Business

When you walk into an industrial sized horticulture supply store that serves as the nexus of so many cannabis grows, it can be a little overwhelming. Seeing all the new cannabis cultivation tools you could ever want in a single place makes you wonder, who could be behind all of this?

Starting a grow supply empire

Steve Gieder, owner of Northcoast Horticultural Supply didn’t always have a successful cannabis grow supply business. Like many success stories in the cannabis industry, Steve came from humble beginnings with passion and a dream. Steve sat down with Chip Baker on an episode of The Real Dirt. They talked about the state of the cannabis industry and how with a little dedication, becoming an industry leader isn’t as out of reach as you might think. Steve has been a big part of the evolution of cannabis cultivation in the legendary Humboldt cultivation scene. Starting out with a trusted partner and a small investment, Steve turned a single cannabis grow supply into a horticultural and consulting empire.

House and Garden Nutrients

Running a grow supply store means understanding the needs of your customers and being able to fulfill them. When Steve got started, he thought he could open shop and stock the shelves with organic nutrients, not realizing that the demand for organic products far outweighed the supply. Opening a store with an emphasis on organic products is hard to do if you can’t find any products to supply it. Seeing a void that needed to be filled, Steve got started with House and Garden Nutrient Company and it became one of the premiere organic nutrient lines.

Steve’s impact on the Humboldt cultivation scene cannot be understated. He was the first supplier to bring digital ballasts to the area. He was also the first to sell compost tea, a cornerstone of organic cultivation, as well as being responsible for supplying pure coco to growers as a new soil-less medium. The practices that Steve introduced to Humboldt more than a decade ago, laid the foundation for much of what we are seeing in grows throughout Colorado and beyond.

Humboldt Green

The culmination of Steve’s passion for his work and his desire to help and guide those just getting started led to the creation of Humboldt Green. Humboldt Green is as they put it, at the epicenter of all things green. Steve and his group of cannabis experts help new entrepreneurs navigate the waters of what is still an up and coming industry. Whether it’s help with cultivation, business development or event management, Humboldt Green has become the first call made by many of those seeking success in the cannabis industry. Listen to The Real Dirt episode with Steve Gieder and hear about what it takes to build an international horticultural supply empire.

How to Navigate Cannabis Law and Compliance: Vicente Sederberg LLC

by The Real Dirt | Feb 6, 2017 | Blog, Business

It is hard not to be surprised at how fast marijuana legalization and the positive shift in attitudes towards cannabis consumption have spread. In nearly half the country, cannabis consumers no longer have to fear imprisonment just because they are walking down the street with a couple joints in their pocket.

Cannabis law consultation services born out of necessity

Times have changed, and as the cannabis industry continues to grow, so does the need for cannabis related legal services, only now the focus is on keeping businesses compliant, not keeping them out of jail. The legal cannabis landscape is ever-shifting, which may leave cannabusiness owners holding the bag, so to speak. Sudden changes in compliance and regulation can be overlooked or misinterpreted if reading legal jargon isn’t your thing. This is where the need for legal consultation in the cannabis industry arises. You can guarantee that the current compliance landscape is wrought with pitfalls. You can also guarantee that if you are engaged in a business that deals with a federally illegal substance, you are going to need a lawyer who understands how to navigate through the complexities of the system. This has created an overwhelming demand for qualified legal professionals who not only understand the cannabis industry, but are on top of the ever-shifting stream of regulation.

Vicente Sederberg, The Marijuana Law Firm

One Denver based cannabis law firm specializing in cannabis services has already doubled in size and is looking to expand into California’s newly legalized market. Vicente Sederberg LLC, dubbed The Marijuana Law-Firm by Rolling Stone, has expanded into the former offices of the Marijuana Enforcement Division on Sherman Street. The cannabis law firm’s expansion, however, won’t stop there. Sederberg is opening a satellite office in Los Angeles. California’s medical marijuana market rakes in more money than Colorado’s entire medical and recreational sales combined. With California recreational cannabis now legal, firms like Sederberg’s may find greater demand for their services outside of Colorado.

According to Brian Vicente of Vicente Sederberg, there are only around 40-50 attorneys in the US who specialize in cannabis with a few hundred that mix cannabis with more mainstream companies. “For years this was viewed as a real taboo area for lawyers to go into. But in the last year or so, the public has realized that marijuana reform is going to spread and spread, and as a result, attorneys are taking a closer look at this, “ Vicente stated to Marijuana Business Magazine. “There’s just going to be more work for attorneys in this space over time. I think we’ll see higher-caliber lawyers getting into this.”

The future needs of cannabis legal services

Cannabis businesses don’t only need lawyers to help them jump through regulatory hoops. As innovation continues, there is a distinct need for lawyers to assist with trademarking, patents and intellectual property. Now that companies have begun to patent cannabis plants and formulas to make them, there will be a virtually unlimited demand for lawyers on both sides of that fight. Another area that will show a spike in demand is that of mergers. As the industry grows, corporate buyouts and mergers will become common place as the industry consolidates. This opens up an entirely new field in the world of cannabis business law.

If you want to get insider industry information about cannabis law, compliance and Section 280E, then you need to listen to The Real Dirt podcast episode with Christian Sederberg of Vicente Sederberg, LLC.