MMj - Striving for Legitimacy

Are we framing a less profitable industry?

Addressing the paradigm of false promises and bad business practice.

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Just one year ago I was growing illegally, layering my alibis thick and making sure if at any point I was to run into contact with an officer of the law I had an ice-cold motive to be doing what I was doing. Just one year later since a company in my home town has vastly improved the recommendation system - the Medical Marijuana industry as exploded. Let me get this straight, I've been doing this since way before it was cool and my experience links me back to the Emerald Triangle. This whole dope paradigm is not news to me and, as with quite a few readers on this forum, I have intimate knowledge of how the pyramid works.

Let me bring you up to date. Since this MMj boom, Missoula Mt has undergone a radical change in the both the social perception of Medical Marijuana, the way it is manufactured, and finally the way it is dispensed. Within the last 4 months at least 6 new dispensaries and countless caregiving businesses have popped up. The local paper (The Independant) is full of adds from small corners to entire pages. There is a current price war going on now with companies offering from $200 an oz for A-grade, to $500 of free weed when you sign a contract dictating this business your caretaker for a stint of time. There en-lies my dissent.

Before I go on too long and lose the interest of my reader let me get to the point. I've never seen more sketchy business tactics, poor management, and more of a term I've dubbed, "foot shooting" in my career as a grower. It seems to me that this adoption of a new industry into popular culture has inspired a new generation of, "30k millionaires" that know nothing of this industry to jump up and down, waving their arms at the media and police, and undercut an entire drug-paradigm that existed before they jumped in the pool. As a direct result we have a price battle that has the entire consumer level of the pyramid jumping from caregiver to caregiver in hopes of getting something for free. This has the police running around town rampantly trying to find any reason they can to press charges, not to mention the black market which is in shambles. The adoption of Medical Marijuana has this industry in chaos.

Let me get back to this fucko that has an add in our paper saying he'll give away $500 of free product to the first 100 people who make him their caregiver. Essentially what this guy is implying is that he has $50,000 of overhead to just give away. Now correct me if I'm wrong but you need patients before you can grow pot so this guy just had $50,000 worth of pot just sitting around? Not true - I've contacted said individual and he doesn't give 2 oz of free pot to every customer but instead tells them when he harvests his plants he can supply them. His grow room which I have seen is incapable of supplying this 100 customer base while paying for their free weed. Basically what you have is an individual stretched beyond his means selling false promises. Ultimately he has to either lie or close his doors. Similar cases exist all across the city. Prices are advertised at a killer deal, the dispensary sells out, then has to raise their prices to make money. Eventually they get desperate and decide to buy weed from informants. Basically what it comes down to is there is a lot of lies circulating the medical marijuana industry and the perpetrators of these false promises are ultimately framing their own business's demise by betraying the very element that makes their business possible. The consumer.

Am I just complaining? I'd like to think not. The bottom line of this post is a word of advice to all the prospective caregivers thinking about starting up a business. These individuals have been fooled into selling false promises by making inaccurate financial forecasts. I've seen people who know nothing about growing crunch numbers way beyond reality based on the assumption that each plant will produce brilliantly. The reality is that growing pot is an extremely finicky and difficult process that ultimately amounts to years of practice and you cannot make financial forecasts for a business model based on the assumption that your crop will yield (x) amount. The only people who can accurately know how much they'll harvest are growers who've been growing in a specific area with a specific strain for more then a few harvests. Just be realistic and offer what you can.

A word to the wise prospective caregiver/dispensary -

If you are going to be a successful dispensary or caregiver you must be both professional and realistic in your ambitions. The ultimate end of your business is loyal clientele and taking care of those patients is seconded only by building a successful grow. You must treat both your clients and your fellow caregivers with respect and allow the market to stabilize. Do not participate in price battles beyond eliminating the second level of the distribution pyramid. In doing so you will hold on to your product a little longer but be able to make up for the slower movement by providing more consistent services for your patients and above all you will make a better profit margin. Consider dropping the price change on quantity at the 1/2 and ounce margins to discourage your patients from dealing to the black market off you. I know one dispensary sells halfs and oz's for $150 and $300 while selling eighths and quarters for $40 and $80. This ensures they always have product. Consider selling baked goods from another company. Several of these companies offering medical edibles also offer the option of using your own product and employing them means creating jobs. Not to mention your business is a joke if you cannot offer either of these highly desirable products. Finally - He who wields the checkbook does not necessarily control the operation. Remember that this industry is a grower's game and although we're busy... you know... growing weed, nobody sees what's happening more clearly then the grower in most cases. If you own a caregiving operation or dispensary and are not the grower remember to treat them right because they are the most valuable asset to your company.

If you manage to accomplish these things... A successful grow... loyal patients... and a successful business model... Then you will make a shit load of money to put it bluntly. Just remember to prioritize correctly and consider the alternatives before shooting yourself in the foot.