Profiting From Perseverance

, Profiting From Perseverance

Maine dispensary chain’s focus on persistence, flexibility and reinvention pays off

by Bart Schaneman

Patricia Rosi-Santucci’s guiding principle for the last five years has been perseverance.

“Never give up,” said Rosi-Santucci, the chief executive officer of Wellness Connection of Maine, a vertically integrated medical marijuana company. “Never surrender.”

Since 2011, Wellness Connection has operated four licensed medical cannabis dispensaries in Maine, accounting for half of the state’s eight allowable MMJ storefronts. Combined, Wellness Connection’s dispensaries currently serve more than 13,600 patients, and the company’s total sales for 2015 came in at $15 million.

Becoming the state’s largest medical cannabis company has required constantly navigating both the unexpected hurdles that arise for every business in this industry as well as the unique challenges that have cropped up in Maine’s market specifically.

“For the last five years my job has been to problem-solve and invent solutions,” Rosi-Santucci said. “There’s a fair amount of resilience and reinvention that comes along the way. Even if you find a solution at one point there’s no guarantee that it will be a long-lasting one.”

Here’s a look at how Wellness Connection combats the state’s robust caregiver market, handles the challenges of vertical integration and hires top-notch professionals to stay ahead.

Create a Different Experience

One of the biggest difficulties for licensed marijuana businesses operating in Maine is competing with the state’s robust caregiver market. Nearly 3,000 caregivers are currently registered to cultivate for patients, a much higher percentage of the population than in other medical cannabis markets. Each can serve up to five MMJ users and grow as many as six plants per patient.

This is by far the biggest competitive threat for dispensaries. Each medical marijuana business license the state has awarded covers a specific region, so dispensaries aren’t really competing heavily against each other. Caregivers, however, are located throughout the state. Because these individuals run smaller operations without heavy overhead costs and regulatory compliance expenses, they are able to keep their prices low.

To combat the caregiver market, Rosi-Santucci said her business sets itself apart by creating a different experience for the patient – putting a heavy focus on quality, education, self-monitoring and testing.

Rosi-Santucci compares her approach to shopping for tomatoes. Consumers can grow their own, patronize a farmers market, hit the neighborhood grocery store, or buy from Wal-mart. It usually depends on the shopper’s budget or values.

“The real differentiating factor is the experience you are seeking,” Rosi-Santucci said. “For us it’s the same thing with the caregivers. We’re really trying to provide value. We’re trying to provide the best medicine at the lowest cost, but we’re not trying to become the Wal-mart of weed. That’s not our goal.”

Wellness Connection’s strategy is to provide patients with a communal experience, similar to how a community center brings together likeminded individuals. Rosi-Santucci said she strives to emulate the neighborhood grocery store model, emphasizing product quality and the relationships the company creates with patients. It also seeks to get involved in the surrounding communities.

“We’re not just about the transaction, we’re about creating patient relations and providing a judgment-free zone,” Rosi-Santucci said.

One way Wellness Connection builds relationships is by encouraging patient communication through any medium. The company offers multiple ways folks can ask questions, whether it be in person, via phone or email, or on social media sites such as Facebook, Twitter and Instagram. Wellness Connection also offers a comfortable space for patients to have private conversations with trained employees.

Focus on Patient Education, Outreach

Another aspect that sets Wellness Connection apart from caregivers is its dedication to educating the public about the ins and outs of medical marijuana. The company maintains an education library that offers a comprehensive suite of subject-specific material, educational brochures, TV screens featuring how-to demonstrations and cooking classes, on-site seminars and group discussions. It also provides safety classes to educate patients on ensuring the medicine doesn’t fall into the wrong hands.

“Education permeates everything we do, it is not confined to a simple library. Whether it be science, policy, cooking, how-to use or how to talk to your child about you being a medical patient, we offer a wide range of topics that can be accessed through multiple ways,” Rosi-Santucci said. “When we work in this industry we tend to forget how little people know about this industry.”

Many patients still don’t know much about cannabis and don’t feel comfortable buying it. Rosi-Santucci sees the company’s education efforts as a way to correct stereotypes and raise awareness so patients can understand the product and the law.

As a medical marijuana operator and not a recreational dispensary, Wellness Connection of Maine doesn’t aggressively advertise. It does some direct marketing with social media and advertising with traditional media, but not a lot. Most of its marketing money goes to events and sponsorships.

For the past three years, Wellness Connection has sponsored the Dempsey Challenge, an annual fundraiser that supports the community of Lewiston, Maine, where Patrick Dempsey’s mother first received cancer treatment in 1997.

Wellness Connection runs an education booth during the event.

“It’s a great opportunity to educate cancer patients and their support network as well as cancer survivors on the healing power of cannabis and how Wellness Connection can help them on their journey towards an improved quality of life. For us, advertising is about awareness and education,” Rosi-Santucci said. “We’re not aggressive in the content.”

Build Redundancy

Maine requires dispensaries to grow and process all or most of their cannabis rather than buy it wholesale. Vertically integrated operations have their upsides, but they also come with unique challenges.

One of the biggest: Scaling up can become more of a challenge, as it’s difficult to be nimble. Wellness Connection now serves more than 13,600 patients and has 80 full-time employees spread throughout cultivation, processing, retail and other related operations. It grows some 35 strains, operates a fully licensed kitchen with over 30 recipes and has started its own extraction lab.

Vertical integration gives the company control over supply, but it’s easy to become a jack-of-all- trades and a master of none.

“It limits your market potential in becoming a true expert in a niche,” Rosi-Santucci said.

Rosi-Santucci advises fellow operators to keep an eye on building redundancy internally to minimize risk. If the company loses some of its supply – if, say, a crop is ruined by pests – there’s no way Maine’s caregivers could make up for it.

The law restricts the quantity a dispensary can purchase from a caregiver to only two pounds per year. Rosi-Santucci said it would be extremely complicated to vet enough providers to make up for it.

In order to build in redundancy, Rosi-Santucci advises business owners to produce what they will sell versus selling what they can produce or purchase. In other words, don’t overproduce and hope sales will keep pace, but instead adjust production according to market demands. This will help a business keep from becoming overextended.

She also recommends mining and understanding available data so business owners can plan and forecast accurately and create a large enough buffer of inventory to handle demand fluctuations.

Engage Employees, and Pay Them Well

The company prides itself in hiring top professionals who have cannabis expertise, which allows them to provide a personalized experience for each patient.

Compared to other industries, Rosi-Santucci said, one of the biggest differences she sees in marijuana is the difficulty in recruiting true professionals. Over the last five years she’s been working on reducing the company’s turnover rate by installing solid hiring processes and attracting high-level professionals.

In 2013, Wellness Connection of Maine had a 49% turnover rate. By focusing on employee engagement and employee relations, the company has been able to stabilize and reduce its turnover to 20%.

The minimum wage for a Wellness Connection of Maine employee is $12 an hour. Employees have access to standard benefits such as health care. The company also encourages employees to become active in the community by volunteering, and it donates a percentage of sales to the community and conducts free hospice programs.

“Giving back to the community is part of our DNA here,” Rosi-Santucci said.

She believes her employees are proud to work for their company, which helps bolster retention.

“We can be a good company and still sell cannabis,” she said.

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