Strong consumer demand, limited product availability and the debut of gummies highlighted the first week of recreational marijuana retail in Connecticut, with dispensaries likely eclipsing $2 million in sales during that period, according to industry sources and MJBizDaily projections based on state data.

To handle the increased business and avoid bottlenecks, retailers added staff and registers, shifted employees in from other adult-use markets, pushed online transactions and fulfilled orders outside for consumers waiting in line.

Recreational sales in Connecticut kicked off Jan. 10 at seven medical marijuana dispensaries licensed to transition to adult use.

Despite several significant retail restrictions, including quarter-ounce-purchase limits for flower, curbs on the use of some strain names and bans on certain product categories, Connecticut’s Department of Consumer Protection reported that adult-use sales surpassed $251,000 in the first seven hours of business.

Recreational sales in Connecticut this year are expected to reach $300 million-$375 million as more cultivators, manufacturers and retailers come online and will increase to $650 million-$800 million by 2026, according to the 2022 MJBiz Factbook.

As expected, the products that hit the shelves – flower, vapes and gummies – sold well.

Fine Fettle Dispensary, which has converted three of its four medical marijuana licenses into hybrid retail permits to serve recreational consumers, has seen transactions quadruple in the past week.

Meanwhile, its dispensaries in Newington, Stamford and Willimantic haven’t generated neighbor complaints, traffic jams or parking issues, assuaging some initial concerns of CEO Benjamin Zachs.

“It’s been a great, seamless process,” he said. “We’ve been really happy with how it’s going.”

Fine Fettle’s lowest-priced eighths, which cost just under $55, tax included, have been its top sellers.

The company opted to fulfill purchases primarily through online preorders and preselected pickup windows at its various outlets, with notification updates sent via email or text.

Fine Kettle’s customers, according to Zachs, have represented a cross section of Connecticut consumers and those from other states, age groups, gender, race and ethnicities.

“It goes to show how universal cannabis is as a product,” he added.

On the first day of recreational sales, lines wrapped around Zen Leaf’s dispensary in Meriden in south-central Connecticut, about a half-hour drive north of New Haven.

Customers cheered in line and were given free coffee and donuts.

“The excitement was palpable; people were super psyched,” said Darren Weiss, chief operating officer and general counsel of Verano Holdings, a Chicago-based multistate operator that owns two dispensaries in the state and CT Pharma, the market’s largest cannabis grower and product manufacturer.

Verano’s Meriden location tripled customer count on Day 1 – compared to a typical weekday of business under the state’s medical marijuana program – and has sustained the pace since then.

“We’ve continued to see that throughout the course of the week,” said Weiss, who traveled from Baltimore for the recreational market launch.

Sticking with gummies

Verano, which acquired CT Pharma in 2021, leveraged its production expertise gained in other recreational market launches in Massachusetts and New Jersey to outfit its 216,000-square-foot cultivation and manufacturing facility in the Hartford suburb of Round Hill.

The monthslong undertaking included equipment installs, training employees on operating procedures, bringing in its national kitchen and infusion staff as well as adding other personnel.

Under Connecticut’s adult-use program, gummy coloring is prohibited, a restriction that sent CT Pharma back to the drawing board.

After some research and development, the company was able to produce gummies with the same feel, taste and look – but no colors – as the gummies it sells in other state markets.

“Day One, we had gummies not only to supply our own store but the entire industry here in Connecticut,” said Weiss, who estimates the facility is producing about 80% of the state’s entire cannabis products.

“We have the capacity here, we’ve done this before,” he added.

“We know how important it is on Day One to have that full panoply, that full suite of products available to patients and customers.”

Consumer product shortfalls

With only one market supplier, The Botanist in Montville limited gummy package transactions per customer to ensure inventory lasted through the first week.

Fine Fettle was on the verge of selling out its line of gummy products but received a few shipments on Friday.

“We definitely want more product variety than anything,” Zachs said.

Demand has outpaced CT Pharma’s production modeling in the early going, Weiss admitted.

Kate Nelson, who oversaw The Botanist’s conversion to adult-use sales under the Acreage Holdings banner, expects the state’s four licensed producers – a catchall term in Connecticut for vertically integrated cultivators and manufacturers – to ramp up production in the coming weeks.

Expanding production licenses and approvals likely will also improve inventory levels and ease demand over time.

“We’re going to see a diversity of products that are available,” said Nelson, senior vice president of the Midwest and Northeast regions for New York-based MSO Acreage.

Until then, The Botanist will offer about 50 SKUs (stock-keeping units) for consumers compared to more than 200 on its medical marijuana menu, a result of supply constraints and regulatory restrictions.

Restrictions rein in retail potential

Connecticut’s adult-use market is one of the most restrictive in the nation.

It opened with only 13 licensed cannabis companies of any kind, which all paid steep premiums to convert their medical marijuana licenses to hybrid retail and production operations.

Dispensaries are charged a $1 million fee and producers a $3 million fee, though those rates could be halved if businesses agree to form separate joint ventures with two social equity applicants, an allowance that includes two additional licenses.

Potency caps and product bans have also hindered product availability and choice.

Under Connecticut’s adult-use program, THC is capped at 30% for flower and 60% for all other cannabis products – restrictions not faced by the MMJ market.

Products administered like medicine, including capsules, pills, suppositories and under-the-tongue sublinguals, are prohibited for recreational consumers.

Connecticut also implemented unusual classification systems that block medical and adult-use retailers from using traditional cannabis strain names such as Gelato, Gorilla Glue or Wedding Cake.

Instead, they’re marketed under pharmaceutical-sounding names such as Hybridol HI T25.13, Indicol VW T28.57 and Sativarin R T23.12.

In an effort to mitigate long checkout lines and educate consumers on its strains, The Botanist employed a team of staffers outside the store to take customer questions and log orders under tents on mobile tablets – a model perfected by the likes of In-N-Out and other fast-food service providers.

“It’s our responsibility as an operator in the program to be sharing that information and to be educating and make sure that when people walk out your door, they know what they’re getting, and they’re ultimately going to be happy with that purchase and that experience they had,” Nelson said.

Even with a record number of transactions on Day One – a 150% increase from a traditional weekday – The Botanist was able to move consumers through the buying process in less than 15 minutes, averting bottlenecks outside in the cold Connecticut winter.

“Our team was ready for this, and the model that we had worked,” added Nelson.

Despite the retail challenges, consumer demand is robust.

Fine Fettle’s Zachs expects a business bump in the months ahead, particularly in the wake of the holiday shopping season and as the seasonally sluggish first quarter gives way to spring.

“I’m happy for where we’ve been,” he said, “but really more excited about where we’re going.”

Source: https://mjbizdaily.com/connecticut-marijuana-retailers-report-brisk-adult-use-sales-in-first-week/