Head Shops Thriving in Many Marijuana Markets, Despite Competition From Cannabis Retailers

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By John Schroyer

Head shops once served as the primary – and in many cases only – distributors of pipes, rolling papers and other types of cannabis paraphernalia.

But the rise of medical and recreational marijuana has changed the competitive landscape, with many dispensaries and retail stores offering a selection of smoking devices as well.

Conventional wisdom says that head shops would take a hit. In reality, though, the opposite is true: Loosening marijuana laws across the country have actually been a boon to head shops in many markets.

“Now that (marijuana) is legalized, there’s a lot more new shops opening up, more wholesalers, a lot more new products out there,” said Mike Gonzales, sales coordinator for Headquest Magazine, a trade publication for the smoke shop industry, which includes stores that cater to both tobacco and marijuana users. “I just came back from Denver, and I talked to a lot of the shop owners, and their sales have increased dramatically.”

National Growth

Head shops in general – including those in states that haven’t legalized medical or recreational marijuana – have seen a surge in sales in recent years, and they now represent a huge market.

According to a 2013 report from Headquest Magazine, smoke shops generate an estimated $10 billion in revenues annually in the United States.

“The vast majority of smoke shops see increasing competition, increased opportunities and increasing sales,” the report reads. “The pie is getting bigger.”

Gonzales said the rise in head shops across the country is “definitely” tied to the increase in state-legal medical marijuana sales. In Colorado and Washington, he said, the effect is even more pronounced, thanks to the recreational marijuana industry.

Although head shops sell a variety of items – including shirts, posters and tobacco products – the Headquest report found that the top items smoke shops stock include pipes, grinders and scales, vaporizers and hookahs, which are all popular with the cannabis crowd.

“We go to these trade shows, and there are more and more new shops opening up. Like tons more,” Gonzales said.

High-End Market

Long Trail Glass in Denver reflects this trend.

Caitlyn Crelin and Bryan Gee opened the head shop in early October to tap Colorado’s booming medical and recreational marijuana industry.

“There’s a reason that we’re here. We came here because it’s legal, to invest in something new. We wouldn’t have gone anywhere else,” Crelin said.

So far, it’s been a success.

“Every day we’re seeing more and more people, and sales are going up,” Gee said.

Crelin and Gee have a distinct competitive advantage: Many marijuana shops, whether recreational or medical, don’t have much to choose from when it comes to hand-blown glass pipes or similar products that interest frequent users. Long Trail, however, works with about 20 independent Denver-area glass blowers, as well as painters and other artists whose work they displays in their shop.

“They (marijuana retailers) just have the basics. They have a spoon here, a vape pen there, and a water pipe here, just a small selection,” Gee said. “I also hear that they can’t make much profit off of it; they just buy it for retail and sell it for retail. So that’s why they don’t have a lot of variety.”

Crelin and Gee also run a Vermont shop, the Emporium, that has basically doubled its sales annually for the 15 years it’s been in business. Some of that growth can likely be traced to Vermont’s fledgling medical marijuana industry, though the state’s MMJ program is still small because the laws are strict.

Increased Acceptance

Head shops in other states report similar growth.

“We’ve had triple the amount of business we used to,” said an employee at a well-established head shop in Portland, Maine – a state that is home to eight MMJ dispensaries. “Never a dull second now. We keep having to hire new people.”

It’s the same story for Brothers with Glass, an online retailer based in Portland, Oregon, that specializes in artisan glass pipes.

“It’s kind of like shopping at Wal-Mart for kitchen utensils versus shopping like Crate and Barrel,” said Jason Werrell, co-owner of Brothers with Glass.

“Wal-Mart’s not necessarily going to have the high-quality selection of cooking utensils that you’re looking for, but if you need some, they’ve probably got some that will work. But you can go to Crate and Barrel, and they’ve got huge selections, varying prices, all over the place,” he said.

Werrell’s partner, Jake Wright, said the reforms in marijuana laws across the country have also helped legitimize head shops and paraphernalia in the eyes of both the law and popular culture.

“It’s more acceptable to have glass. There’s a lot less chance… that it can get confiscated, so you can invest a little more money in a bigger water pipe,” Wright said.

Quantity, Choice

Consumers and patients who seek out head shops typically are cannabis connoisseurs who are willing to spend big bucks on unique paraphernalia. Brothers with Glass carries pieces that sell for upwards of $800, while Long Trail stocks some that are priced in the thousands.

Of course, both outlets also sell plenty of every-day pieces that cost much less.

The biggest difference between marijuana shops and head shops is quantity and choice, Wright said. Most marijuana dispensaries and stores sell “gas station type, low-end quality, or cheaper” paraphernalia,” Wright said.

Another reason head shops aren’t going anywhere is that most marijuana vendors just don’t care about competing in that market.

“I would be surprised if I heard 7% of my business is accessories. It’s really not a focus,” said Robert, the manager of River Rock South, a medical and recreational shop just blocks from Long Trail in Denver (Robert asked his last name not be used in this story). “The focus is, let’s make sure we’re producing and curing and jarring and selling the right product.”

Salwa Ibrahim, the owner of the MMJ dispensary Blum Oakland in California, echoed that sentiment. Her store carries only vaporizer pens. No glass or wood pipes. But, she said, there are several head shops within walking distance of her dispensary.

“They seem to do great,” Ibrahim said.

Chris Woods, the founder of a small chain of recreational stores in Colorado, estimated that paraphernalia accounts for maybe 5% of total sales in his shops.

“The people that are buying paraphernalia at our store, it’s more of a functional purpose. It’s not like at a head shop, where they might spend several hundred dollars,” Woods said. “I don’t think we’re taking their business at all.”

John Schroyer can be reached at Johns@mjbizmedia.com