The Feel Better Store

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The legal cannabis business is opening up new doors for recreation as well as the healthcare industry. Just below the retail radar screen of Walmart and Target\’s quarterly performance and Amazon hitting a trillion is the booming legal cannabis industry. Expanding east from Alaska, Washington State, Oregon and Colorado, it\’s now legal in many other U.S. states. Reaching from Uruguay, Canada, Israel and Australia, it\’s also now legal in many other countries. We\’re entering a powerful emerging global retail market.

Good Chemistry

If you came of age in the 60s, pot had a THC content well under 10 percent. Times have changed. The THC content today ranges from 20 percent to 27 percent. It is much stronger and curated for its enhanced high effect. Think of the difference in sophistication between Medieval mead and over-proofed spirits. But this market is not guided simply by Reefer Madness; THC is not the only active ingredient or cannabinoid in the plant. Marijuana contains Cannabidiol (CBD), a well-proven and effective antidote to a broad series of medical conditions including; chronic pain, anxiety and inflammation.

A Brief History

Let\’s take a brief step back into the recent history of cannabis. The legal cannabis business has two roots: recreational and medicinal. The first dates back some 30+ years to the decriminalization of marijuana in The Netherlands. Some of us nostalgically remember our first pilgrimage to The Bulldog in Amsterdam where one sat in a discrete corner with offerings of pre-rolled joints and mixes of hashish and tobacco. It was magical and a little frightening that something we had been trained to hide had come out into the open. What unfolded for the Dutch then (and still now) is the flagrant openness of where and when it is consumed. Plus, the country never officially regulated the product and to this day, cannabis is not officially \”from anywhere\” and it could contain a blend of almost anything.

The second root was the acceptance of CBD as a legitimate and valuable medical aid which resulted in the mass opening of cannabis legal dispensaries. These dispensaries vary in retail sophistication. Product has been dispensed with legitimate medical supervision, but also with ad-hoc New Age advice. The novices say, \”Tell me your problem and I\’ll get you to the right strain.\”

Healing Properties

Medical cannabis is legitimized by the medical profession as well as by lay people who have demonstrated great outcomes. For example, I have two good male friends, both in their sixties, who swear by medical cannabis; one a therapist and the other a distinguished political writer with a book on the Amazon top-ten list. Both use what has become a popular delivery system of choice-a battery-operated vaporizer that delivers measured dosages. One fellow is an aging, mellow person taking a happy drug before riding his big motorcycle. As a family therapist, he dispenses calm. The other is an influencer on the world stage relying on a calming effect that gives him perspective and lets him sleep at night.

For U.S. dispensaries, a local supply of product was essential. In the face of legal restrictions, it was cheaper, easier and faster to produce and sell locally. As for commercial purposes, initial regulations in Colorado – the product is grown, processed and sold locally. Based on the mainstreaming of cannabis, drug smuggling of cannabis has been seriously reduced. The medical applications have served to industrialize production, which greatly benefited from plant scientists interested in improving the efficacy, potency and application of the plant.

In Store

What are the cannabis retail applications? Today, a medical cannabis dispensary is half pharmacy and half jewelry store. Based on the state and location, the definition of \”medical\” varies. I\’ve seen both white lab-jacketed employees fulfilling prescriptions and hipster budtenders telling you which strain and delivery system will alleviate what symptoms or conditions. For everyone whose pain and discomfort has been greatly alleviated, the crossover to recreational dependence is unavoidable. Like so much of modern retail, we need clear and transparent point-of-sale materials that educate. For example, look at the marketing history of selecting the right mobile phone, how to use this skin crème correctly and what gluten-free really means.

The cannabis stores I\’ve visited tend to be standalone, class-three retail locations. Mainstream landlords are not yet comfortable with cannabis tenants. The look and feel of the store-even in locations across the street from each other-can be very different. One driving factor is security. Another is convenience. Although legal in many states, cannabis is essentially still a cash-based business. Because U.S. financial institutions are required to comply with stringent anti-money laundering statutes, banks at present are refusing to work with cannabis retailers. This creates problems, in particular, for retailers needing to clear credit card purchases through normal banking channels.

Another of my friends, Seth Adler, hosts Cannabis Economy, a podcast that he describes as \”a real-time history of legal cannabis.\” I\’ve been a guest on the program and so has Former U.S. Deputy Attorney General James M. Cole who authored the Cole Memos-the federal guidance documents from the Obama administration for U.S. attorneys on how to prioritize the federal criminality of state legal cannabis.

Just as California legalized adult-use cannabis, current attorney general Jeff Sessions rescinded the Cole Memos. In concert with the third of the Cole Memos came FinCEN (U.S. Treasury Financial Crimes Enforcement Network) guidance that outlined how financial institutions can legally bank cannabis. Although big banks never acted on that guidance during the Obama Administration, and even though the current Justice Department rescinded those Cole Memos, the current Treasury Department didn\’t rescind the FinCEN guidance. So what does that all mean for cannabis retail now?

This is one business that fuels the grey and black economies. The typical transaction is over 40 dollars. Behind the glass casements and wall displays is serious security. Unlike the jewelry business whose relationship to both law enforcement and the insurance industry is well defined, the cannabis industry at every stage-production, processing and sale-sits in a yet-to-be-defined nexus.


Like a jewelry store, the product and accessories are displayed in glass vitrines. Up top, accessories from pipes and delivery devices to storage are typically displayed. What has exploded is all of the non-smoking products in which active ingredients are packaged: lollipops, gummy bears, chocolate teas, and beverages.

In states where dispensaries came first and recreational followed, like Oregon, the migration from \”feeling better\” to \”feeling good\” is visible on the merchandising and in the operating culture. Imagine, if you will, the sales staff in a liquor store reviewing with you the difference in the alcohol high between bourbons and scotches, much less mescal. It\’s difficult for the traditional retail shopper and non-cannabis consumer to understand these nuances. There is medical efficacy in this plant. And that\’s why clever marketing approaches are not relevant or appropriate. Nevertheless, cannabis product has been given pop culture names to characterize its effect. Jack Kerouac and Aldus Huxley branding seems a stretch considering the serious medicinal value of cannabis. The industry is trying to define itself as it catches up to the properties of the cannabis plant.

Ramping Up

Albeit in a current state of constant flux, the cannabis industry is here to stay. In North America it will reach $50 billion in revenue in the next three years. While I have no objection to legalization, aspects of the emerging industry concern me, from impaired driving and judgment to the reported unwitting consumption of doctored candy and beverages. Let\’s put it on our radar screen and do what the industry\’s own advocates suggest-regulate cannabis like alcohol. What we sell and how we sell it deserves professional attention.



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