By Matt Walstatter
October is rapidly approaching.
When the first of the month arrives, Oregon medical marijuana dispensaries will be allowed to sell limited amounts of cannabis to anyone over 21, regardless of whether they have a medical card. The law will allow individuals to purchase up to seven grams of flower, four clones and, as of now, an unlimited amount of seeds.
As you might imagine, Oregon growers and retailers are gearing up for this historic moment.
At Pure Green, the dispensary I own in Portland, we are adding staff, supplementing our inventory and reviewing all aspects of operations. We need to be prepared for not only the surge in demand, but also the increased regulatory and compliance burden that comes with serving two different groups with two different sets of rules.
Here’s a look at how we’re tackling these challenges.
Dealing With Uncertainties
The biggest issue we face as we prepare for the new system is the great unknown.
We need to prepare for increased demand. But how much will demand increase? Will sales rise by 25%? 50%? 100%? More? Each scenario requires a different staff working a different schedule, a different level of inventory, maybe even a different floor plan.
If we underestimate demand, we will be swamped. If we overestimate demand, we may not be able to cover payroll.
This uncertainty means every plan is actually three or four plans. The trick is to commit to decisions that are scalable in both directions. To be viable, any option must include some wiggle room.
Our floor plan offers a great example of this type of decision-making. We considered several options to open up our space and increase flow, from cutting a new door between our reception area and our retail area to blowing out a wall and increasing the size of the retail space by 50%.
Ultimately we chose to cut the door rather than undertake the larger project. It was the least expensive, least invasive option. If we find that we need more space, we can still move the wall later.
Catering to Two Types of Customers
In addition to uncertainties, we must prepare to serve two different groups of customers: patients and recreational users. We therefore must be able to meet their differing needs and follow the different rules that apply to each.
This is one area where we may be able to draw on the experiences of Washington and Colorado. In those states, rec customers spend less time shopping for cannabis than medical patients. Most people attribute this to the fact that patients are trying to learn about medicine and to meet a more specific need than rec customers (e.g. relieving pain, treating cancer).
But Oregon’s cannabis market is connoisseur-driven. Even experienced users may want to take a little extra time, especially if they are new to dispensaries. It remains to be seen whether these folks really will spend less time making a decision than medical patients.
We have decided to add two point-of-sale stations, bringing our total to four. Beginning Oct. 1, one of those stations will be medical only. This will allow medical patients to take their time, while showing them that they will not be forgotten or left behind.
It also leaves us three lines for everyone else, so rec customers can take as much time as they choose. We can then make changes to this system as needed.
Wading Through Compliance Issues
Another challenge we face is grappling with two very different sets of rules. Oregon medical patients may buy up to 1.5 pounds of cannabis flower, concentrates, edibles and topicals. They also can buy up to 24 plants for each card that they possess.
Non-cardholders, by contrast, may only purchase seven grams of flower, unlimited seeds and up to four clones. This creates the potential for serious compliance issues. We don’t want to face sanctions for accidentally selling concentrates or edibles to non-cardholders.
To make matters more confusing, we first saw the draft rules for Oct. 1 a few days ago. We have no idea when the final rules will come out or how they will differ from the rules that we have seen thus far.
We discussed a number of different options for serving medical patients and recreational customers under one roof. We talked about dividing the retail space into medical and recreational sides. We even toyed with slapping wristbands on non-cardholders so that we wouldn’t unintentionally sell them unauthorized products.
Ultimately we decided to use our POS to distinguish medical patients from rec customers. We can always divide the store later if that makes more sense.
We have decided to use the transition to rec sales to expand our hours. Our existing staff is already pretty maxed out, so between the added hours and the added demand, we need to do some hiring.
We have looked at several mock schedules that run the gamut from hiring one or two people to doubling our staff. Ultimately, in an effort to preserve flexibility, we have landed on a middle ground that adds some shifts and some new staff members.
We have also created contingency plans that allow us to add or take away shifts without having to hire or fire anyone.
Adding so many new staff members creates challenges of its own. We need to dedicate time and effort to finding, interviewing, hiring and training new employees. We realized quickly that we would need to start that process in August. After all, we can only train so many people at a time.
We also want to make sure that the new hires have some experience under their belts by the time October rolls around. If sales do double or triple, we need experienced staff members who can keep up with the pace.
Of course we must beef up our inventory.
Fortunately, the limited nature of early rec sales means that we only need to focus on flower and clones. We don’t currently sell clones, but we are getting set up so that we will have them available in October. This takes minimal time, space and resources.
As for flower, we will be doing some stockpiling. But this requires care as well. We just don’t know if rec customers will prefer the same strains as medical patients.
Many shops are entering contracts with growers in order to assure a supply of cannabis. I have wrestled with the idea of contracts, but I am concerned about the uncertainty of both demand and price. I don’t want to enter agreements that I cannot afford to honor.
Instead I have opted for looser, less formal arrangements with my key growers. I also work with a small handful of outdoor growers who can help assure that I have an adequate supply of flower for my rec customers.
We have spent a great deal of time planning for this transition. We have analyzed the variables, assessed possible scenarios, determined what we think is most likely to happen and created flexible plans to address the coming changes.
While preparation has been a challenge, we couldn’t be more excited about the opportunity.
Much remains unknown, but by now the unknown has come to feel familiar. As the cannabis industry moves forward, almost everything that happens is entirely unprecedented. That’s what makes it both terrifying and exhilarating.
Matt Walstatter and his wife own Pure Green, a dispensary in Portland, Oregon.