Pubdate: Mon, 12 Oct 2015
Source: Albany Democrat-Herald (OR)
Copyright: 2015 Lee Enterprises


The next development in Oregon's fascinating journey to legalized 
recreational marijuana likely will be dictated by the cold hard laws 
of business: The dispensaries which were set up to allow easier 
access to medical marijuana increasingly are under economic pressure.

By the time the Oregon Liquor Control Commission steps in to regulate 
recreational marijuana sales at the start of 2016, many dispensaries 
around the state may well be shuttered or in the midst of hard times. 
And the market for medical marijuana may well eventually be largely 
absorbed by the recreational market.

This was part of the reason why the state Legislature decided to give 
medical marijuana dispensaries a head start in selling recreational 
pot. Dispensaries got the green light to sell recreational marijuana 
beginning Oct. 1, assuming that they were in cities and counties that 
hadn't banned the early sales. (Those early sales, of course, are 
banned in Albany.) The idea was to let those dispensaries get a jump 
on building a customer base before the competition for the 
recreational marijuana dollar really heated up.

Well, the first five days of recreational sales in Oregon netted some 
$11 million in sales, according to the Oregon Retailers of Cannabis 
Association - considerably more than in other states that have 
legalized pot, such as Oregon and Washington. That's a number that's 
certain to grab some attention from out-of-state marijuana 
entrepreneurs, who increasingly are interested in the business 
prospects offered by Oregon's nascent pot business.

There also is a sense that some of Oregon's medical marijuana 
dispensaries are falling prey to the same sorts of troubles that 
afflict many other businesses. Estimates are that more than 300 
dispensaries are in operation throughout Oregon, serving a market 
that right now appears to have stabilized - about 71,000 Oregonians 
hold medical marijuana cards. Certain metropolitan areas - well, 
let's just come out and say it: Portland in particular seems to be 
oversaturated with dispensaries.

Another factor is at play here. The first wave of dispensaries often 
were opened by marijuana true believers, people who believed in the 
medicinal properties of pot but who may not necessarily have had much 
in the way of business experience. It's very similar to those people 
who open restaurants because they're great cooks - the food may well 
be terrific, but without a solid business plan, chances are good that 
the restaurant won't stay open very long.

What Oregon dispensaries are going through now also closely echoes 
what's happened in Colorado and Washington state. According to a 
weekend story in The Oregonian, the medical marijuana industry in 
Colorado contracted 40 percent between 2010 and 2013. Washington 
state, meanwhile, has attempted to move all medical marijuana 
dispensaries into the recreational market.

Oregon is trying a little bit of a different tack, giving 
dispensaries a chance to get their businesses established before the 
competition for the recreational pot dollar begins in earnest. The 
smartest dispensaries likely will find a niche that helps them 
survive, even thrive, maybe by offering outstanding customer service. 
But many will fall by the wayside. After all, it's just business now. (mm)
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MAP posted-by: Jay Bergstrom