Business
Art-focused retailer sprouts in a central California cannabis desert
Being one of a small number of stores in a cannabis desert might seem like an easy proposition: Open your doors and let customers roll in, unencumbered by competition.
But as Lauren Fontein, founder and president of The Artist Tree marijuana chain in California, learned when she opened a store in Fresno (population 500,000), being a cannabis oasis comes with its own challenges.
These include a community inexperienced with cannabis, staffing issues and more.
“It really is a cannabis desert,” Fontein said of California’s Central Valley, a more conservative, agricultural area of the state.
“People really didn’t have that experience of being able to shop in a licensed dispensary.”
While California launched an adult-use marijuana market in 2018, Fresno didn’t award its first licenses until fall 2021, Fontein recalled, long after most other big cities in in the state.
Before that, there were no cannabis stores in Fresno or the surrounding areas.
The only legal options for consumers to access marijuana retail included using delivery services or driving to Merced, which is about an hour away, Fontein said.
Busy from ‘minute one’
In contrast to Artist Tree stores in highly competitive markets such as Los Angeles and Riverside County, which didn’t experience a surge of customers when they first opened, “The Fresno location was super busy from minute one,” Fontein said.
The clientele ranged from seniors with medical marijuana patient cards to recreational customers who previously drove long distances to purchase regulated cannabis.
“We had somewhat of an idea that we would be busy, but (we) underestimated that – and how quickly we had to ramp up with staff,” Fontein said.
The Fresno Artist Tree location started with about 25 employees when it opened and gradually added more.
Today, the store has about 75 employees, Fontein said. The company’s other retail locations, meanwhile, have 20-40 employees apiece.
The Fresno location continues to see a higher volume of consumers than other Artist Tree stores, and therefore it needs more staff, Fontein explained.
“Once we got open, we were luckily able to find a lot of people that were really interested in working in a dispensary. It hasn’t been an issue to find people that are interested, and we’re continuing to expand the team,” Fontein said.
“Our business model is to have guides on the sales floor that can help customers (on a) one-on-one basis. So, it’s a model that inherently requires more staff than a behind-the-counter sales model.”
Friend of the arts
The Artist Tree also has used community outreach to help garner customers.
The retailer says its “whole business model is built around promoting local artists,” and the store functions as an art gallery as well as a cannabis store.
To find artists to feature in the store, Fontein first looked to Fresno’s local art scene.
“Even before we opened, I did a lot of outreach in the city to connect with the Fresno Arts Council and different artists groups,” Fontein said.
That outreach led to the retailer being included in a monthly ArtHop organized by the Fresno Arts Council, which hosts exhibits at different venues, along with refreshments and entertainment.
Fontein said that ArtHop participants wishing to visit The Artist Tree must be 21 or older (or 18 with a medical marijuana card) and have their IDs checked before entering the store.
The events in Fresno have gone so well that The Artist Tree location in West Hollywood is trying to organize its own ArtHop-like event and has reached out to local hotels and other businesses to participate.
Because cannabis is less entwined with Fresno’s culture than it is in cities such as Los Angeles and San Francisco, effective marketing is especially important to the Fresno store’s success.
Fresno prohibits cannabis billboards, so The Artist Tree location there advertises in the Fresno Flyer, a local alternative newspaper, and also participates in more local community events than its other stores do, Fontein said.
For example, The Artist Tree has a “big presence” at the local FresYes Fest in March. Though the business can’t sell products, it can give away swag and use the opportunity to be visible in the community.
“The idea is to get in front of the entire community and people who might be interested in trying (cannabis) once they talk to us and learn about our business,” Fontein said.
The Fresno location also hosted a blood drive with the Central California Blood Center a few months ago, and customers who donated blood received a store discount.
“We completely filled the donation spots,” Fontein said.
The company held a Thanksgiving food drive and Christmas toy drive, Fontein said.
It also hosts art classes in a restaurant next to the store in conjunction with a company called Paint Party USA. Product discounts are offered to consumers who take the classes.
“It’s another way to lean into the art aspect of our business and collaborate with other businesses in the community,” Fontein said. “It’s raising awareness.”
Source: https://mjbizdaily.com/art-focused-retailer-sprouts-in-california-cannabis-desert/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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