Marijuana Business Magazine August 2019

Marijuana Business Magazine | August 2019 108 the first few months of rec sales—and roughly half those patrons hailed from New York, Pollock said. Medical and adult-use marijuana dispensaries located near state borders have massive business opportunities, said Nic Easley, a national cannabis consultant and CEO of Denver-based 3C Consulting. In some cases, they benefit from reciprocity laws that allow out-of-state medical marijuana patients to make purchases, Easley noted. They’re also able to appeal to consumers in neighboring states that prohibit cannabis, he said. And, in adjacent states with adult-use programs—California and Oregon or Oregon and Washington, for example— businesses can win out-of-state customers if their state has lower tax rates or costs, he added. But there’s a catch: It’s illegal for con- sumers to transport product across state lines—and it’s incumbent on businesses to operate within the law and educate consumers about the rules, Easley said. “Something all operators need to get behind is an education campaign—and not just for a business strategy,” Easley said. “It’s a no-brainer: You don’t want to set consumers up for failure.” ASSESS THE BENEFITS The most obvious benefit of operating a marijuana dispensary near state lines is its appeal to out-of-state consumers. In Connecticut, for example, a high- way billboard advertised “Weed is legal in 60 miles,” referring to the cannabis legally for sale at businesses that sit just across the border in Massachusetts. Such messages can create confusion for con- sumers, who may assume they can travel interstate with cannabis (and it can draw the ire of anti-marijuana advocates). It’s impossible to know whether consumers travel back to their home states with your cannabis products, but it’s reasonable to assume that many do. When Theory Wellness opened its doors as a medical cannabis dispensary in Great Barrington in 2015, it was the only marijuana retail store in Berkshire County, which has a population of roughly 200,000. That situation—combined with the fact that cities in western Massachusetts were more friendly to cannabis businesses—was a big enough advantage at the time, Pollock said. He also knew that, 130 miles north of Times Square, it could become the closest adult-use dispensary to New York City. By contrast, New Jersey does not allow out-of-state patients to purchase medical marijuana at its licensed dispensaries. But there are other advantages to its location, said Shaya Brodchandel, the CEO of Harmony, a vertically integrated medical marijuana business in New Jersey. Brodchandel said Harmony’s Secaucus location “made perfect sense from a business perspective.” It is located near the densely populated border of New York, with a large population of commuters who pass between New Jersey and New York City every day, Brodchandel said. That allows the company to do business with commuters returning from across the river in New York. New Jersey is also home to large pharmaceutical companies such as Novartis, Johnson & Johnson, Merck and Bayer, he added. “We’ve benefited tremendously from the pharmaceutical hub in New Jersey in being able to recruit experienced talent … and improve our product and processes,” he said. He noted, too, that Harmony’s location gives it greater access to “a major media and consumer market as conversations around legalization continue.” That has helped the business build brand awareness with potential patients in New York who, for now, cannot purchase medical marijuana in New Jersey but who might be able to in the future. NAVIGATING CHALLENGES The Green Solution, a Colorado-based, vertically integrated cannabis company, has a dispensary in Trinidad, a city 10 miles from the Colorado-New Mexico border. There are some challenges to operating near state lines, Steve Lopez, The Green Solution’s CEO, wrote in an email to Marijuana Business Magazine. Theory Wellness in Great Barrington, Massachusetts, is located close to the New York state border. During the first quarter of 2019, sales at the location totaled about $7 million, while second-quarter sales surpassed $10 million. Courtesy Photo BUSINESS ALONG BORDERS