By Meghan Cahill
It is easy to understand why residents of Washington, D.C., are interested in learning how to make money from cannabis-related ventures. Initiative 71, enacted February 26, 2015, in the District, allows D.C. residents to smoke cannabis, possess up to two ounces of cannabis, gift an ounce to a friend, and grow six cannabis plants, with three being full-grown, in their own home. D.C. residents cannot buy or sell marijuana of any kind, but this is exactly what savvy investors and entrepreneurs would like to happen.
According to Dr. Yesim Sayin Taylor, the District’s Director of Fiscal and Legislative Analysis, the sale of recreational cannabis, medical cannabis and cannabis-related products has an estimated $130 million annual market in D.C. If cannabis is taxed and regulated in our nation’s capital, the possibilities are endless for products, shops, goods and services, in addition to taxable income.
“We live in a capitalist society. It’s going to be hard to stop the commercialization … of marijuana. It’s going to be hard to keep the big companies out,” said David Grosso, member of the Council of the District of Columbia.
The estimated market and the feedback from District representatives fueled the green rush spirit at the ComfyTree Cannabis Expo held last Saturday, February 28, 2015, at the Holiday Inn Washington-Capitol Hotel in Southwest. The attendees at ComfyTree’s Cannabis Expo were all eager to learn how to profit from cannabis. Legally licensed D.C. medical cannabis dispensaries were on hand at the expo to offer their advice on what they think it takes to have a successful cannabusiness.
Corey Barnette, owner and operator of District Growers, and Vanessa West, general manager of Metropolitan Wellness Center, spoke on the importance of finance, resilience, customer service, human resources and business strategy when operating a dispensary or cultivation center. Barnette first dove into the financial realities of how much money is actually needed to start your business.
“Make sure your capital resources are alright … I don’t mean just the money you need to start your operation but the money you need to be able to weather the storm from whenever you start to when you can break even,” Barnette said. “Make sure your plan is obviously one that is workable and well thought out,” he added. “You’d be surprised how many people enter this industry with poorly thought-out plans. They are not prepared.”
Barnette noted that medical marijuana dispensary licenses are very competitive, but licensing might not be as stringent for recreational cannabusinesses, if the District passes taxation and regulation. He recommended making your cannabusiness interests known in your local jurisdiction and at the state or congressional level to ensure that the politicians who will govern medical or recreational marijuana in your district are on your side.
Barnette and West laid out the day-to-day challenges for owning your own growhouse or dispensary. “Running a dispensary is not unlike running any other small retail establishment, other than you have [cannabis] regulations,” West explained. “You have to think about the normal day-to-day things: one, obtaining a great staff, retaining that staff, getting customers, retaining those customers, figuring out how to keep them happy, and not engaging in things like price wars … thinking of things to keep your customer-base happy.”
Beyond the District’s growing pains with cannabis legalization, the law will affect Barnette and other medical marijuana dispensaries in the city. If taxation and regulation pass, they’ll have competition. However, Barnette stressed that money may not necessarily be made by owning the business that sells cannabis in the city.
“The real opportunity in marijuana industry exists … in product manufacturing,” Barnette said. “Do you want to own the shoe store or do you want to be Nike? If I can make the choice to be the product on the shelf versus owning the actual store, I would opt to make the product and be different.” He added, “the sky is the limit with what you could do with that brand and opportunity.”
In addition to the uptick in those interested in getting involved in the legal business of cannabis, the interest of purchasing cannabis has drastically increased in D.C. in the past week. West detailed accounts of people without D.C. medical marijuana cards just showing up at her Metropolitan Wellness Center thinking they could purchase cannabis without going through the medical marijuana registration process.
West had to change her center’s answering machine message and create signage for all sides of her building to state, “Stop! Stop! Stop! Do not try to attempt to come in! We legally cannot sell you cannabis.” Customers cannot enter medical marijuana establishments in D.C. without a registered medical card, regardless of the recent recreational law. Clearly, though, the D.C. cannabis customer is ready and willing to buy if and when cannabis can be purchased in the District without a medical card.
West and Barnette will remain on the defense to uphold the District’s laws while interest among non-medical cannabis consumers continues to increase. West warned patients and citizens who are in favor of recreational cannabis not to break the law if they want to maintain recreational cannabis and the possibility to purchase it one day:
“What makes headlines is the dispensary that sells cannabis to unregistered patients; it’s the headshop employee that medicates while on the job; and it’s the cultivation center that is selling products to places other than dispensaries. As business owners we have to be vigilant and make sure that we’re following the laws.”
The number of curious customers is sure to increase while D.C. cannabis regulation hangs in the balance. Barnette explained that people want quick and easy cannabis; they don’t want to take the time to grow it themselves. As D.C.’s tourist season approaches with the cherry blossoms ready to bloom, Barnette and West can expect an increase in cannabis inquires from tourists.
“I have no idea what is actually going to play out,” West said. “And I think that is the attitude you have to have being in this industry—not knowing what’s going to happen and being able to adjust and make quick changes on a dime.”