Experiences of a Cannabis Dispensary Owner

November 21, 2022

In this episode of CannaCast, Eric Altstadter, Partner and leader of the firm's Cannabis and Hemp Group, speaks with Janice Grossman, President of Oregon’s Green Rush, a Family-Owned cannabis dispensary based in Eugene, Oregon. The two discuss Janice's experience operating a cannabis business, as well as various trends and topics in the industry.


Transcript

Eric Altstadter:Thanks for tuning into this episode of CannaCast. I'm your host, Eric Altstadter, EisnerAmper's National Cannabis and Hemp practice leader. Today, I am joined by Janice Grossman. Janice is the president of Oregon's Green Rush, a dispensary located in North Eugene, Oregon. Janice, thanks for joining me here today.
Janice Grossman:Thank you for having me.

EA:
Janice, how does a Long Island mother become a dispensary owner in North Eugene, Oregon?
JG:It's an interesting thing. I went to Colorado originally to enter the industry. At that time in 2015, Colorado was already a saturated market. Oregon was about to get into the industry and I wanted to be part of it.
EA:How was the process of applying for a license?
JG:At the time it was rather easy to apply, but rather difficult to get. The easy part of applying was that application was, they were not looking for very much background, but they were looking for you to be an Oregonian. I, at that time, wasn't an Oregonian, but I had to get something called a PIF, which is a person involved in the federal cannabis industry. I was able to hire someone, but that ended in the very beginning of the industries, as it was born.
EA:Is there still a bias against dispensaries by other tenants or by landlords?
JG:It's difficult because cannabis is still federally illegal and most buildings are owned by a landlord who has a mortgage. Since mortgages are usually owned by banks that back them, they can't rent to a cannabis store unless they own the building outright.
EA:What went into the decision to pick this particular location?
JG:So I was fortunate. I got two locations, one in Portland and one in Eugene. I'm currently in Eugene. The one in Portland unfortunately became a commercial condominium and the commercial condominium was backed by a bank that did not allow anyone that was in the cannabis industry to have a store. I built out this store in Portland only to find that I had to move. The store that I have currently, which is in Eugene, I had to buy the building and I had to get backed by a hard money loan.
EA:How much, ballpark, does it take to properly build out a dispenser?
JG:Anywhere between 250 to $500,000.
EA:And what are some of the basics that an entrepreneur might not think of but you know is most important in the build out?
JG:Camera system is the most important thing because you monitor everything that goes on in the store, a POS system that tracks all of the products. It tracks both in your store and through a metric.
EA:How is building a dispensary different than building any other retail establishment? For example, say a 7-Eleven, how is it different?
JG:It's basically the same. The difference is that you're carrying a product that's federally illegal. It's still a schedule one drug, so it's storage of the product. I actually have a real vault that we built, like a bank vault, where we store all of our products. We store it every evening and take it out every day. Typically, like a jewelry store, everything is put away and then everything is opened up in the morning.
EA:And how long did it take you to build out your dispensary from the time you first identified your location to the time you were operational?
JG:Around nine months.
EA:What are some of the key team members a successful dispensary needs to employ?
JG:So in my dispensary, we have four key team members. One is the director of operations, second is my supervising manager. The third is a floor manager, and the fourth is a shift lead. And each of them has their own auspice of information and knowledge of what it takes to operate on a daily basis. They communicate with each other and of course that all filters to me. I'm the owner.
EA:What products are some of your best selling products?
JG:So flower is my best selling product, which is marijuana, cannabis. That's my best selling item.
EA:And do you see that changing in the future? Do you see edibles and beverages growing in use?
JG:So edibles have a small footstep in the dispensary. Customers go for variety and as you know, variety is the spice of life. So, there's customers that like smoking, there's customs that like ingesting.
EA:Where do you see this industry headed in a few years? Do you see federal legalization happening?
JG:I sure hope so, yeah. That's kind of where I'm hoping the industry opens up to because then it will open for all of us in the industry. Banking. Banking is key to our survival.
EA:How important is marketing and branding to your operations?
JG:It's very, very, very important. Advertising is a way to get your brand out there. I do advertising, both radio spots and newspaper, as well as digital.
EA:Are there any restrictions for you as far as your advertising goes? Can you advertise anyway or are there certain restrictions on how you can advertise?
JG:In Oregon, you could only advertise in where you have your dispensary. So I have my dispensary in Eugene, I'm allowed to only sell in Eugene, so I advertise only in Eugene. Because if I reach out to other areas, very few people are going to be traveling unless they're visiting Eugene. It's all about location that you are only allowed to really advertise. And we have a delivery service, so we could only deliver within our jurisdiction.
EA:You recently said that the whole cannabis industry is failing. First, what exactly did you mean by that and what does the industry need to do to reverse that trend?
JG:So one of the biggest problems in Oregon as it is now in Colorado, in Washington and in California, is that we're in an overly saturated industry because the states decided to legalize it, but they also allowed everyone that's in that state to get licenses. So there's too many licenses out there. And so it's called survival of the fittest. The cream of the crop rises to the top, and there's fallout from the bottom.
EA:Recently, President Biden declared he would pardon all federal prisoners who are currently locked up for simple marijuana possession. How important is this for the industry?
JG:The odd thing is that there aren't that many people that are in prison, in federal prison for marijuana possession. So by him giving this pardon, he's giving it to a very small percentage. So it doesn't really affect the industry in itself.
EA:And Janice, my last question for you today is, you spent a number of years in New York's fashion industry. How different is it running a business in the cannabis industry as opposed to other industries?
JG:So in the fashion industry, for me it was much easier because I was allowed to sell products anywhere in the world. In the cannabis industry, I'm only allowed to sell in my state. We can't cross state lines because it's federally illegal. And so there's a huge difference monetarily of what you can gain, although you can spread your wings in that state.
EA:Okay. Well thanks for listening to CannaCast, as part of the EisnerAmper podcast series. Visit eisneramper.com/cannabis for more information and podcasts. Also, please visit www.oregonsgreenrush.com for more information about Janice and Oregon's Green Rush. Join us for our next CannaCast podcast where we'll discuss other budding issues.

Transcribed by Rev.com

About Eric Altstadter

Eric Altstadter CPA is an Audit Partner and Chair of the firm's Cannabis and Hemp practice with over 30 years of experience working with public companies and privately held businesses


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