A cannabis chain by industry veterans hopes to mainstream consumption with an upmarket edge.
After years of patchwork policies on local, state, and federal levels, Los Angeles locals can now legally acquire and consume cannabis. Pot-trepreneurs who’ve been waiting in the wings are now front and center with a supply of product and a dose of culture to meet local demand.
According to a March report by New Frontier Data, a trade group that analyzes the cannabis industry, the legal market nationwide was worth $6.6 billion in 2016. The firm projected a compound annual growth of 16%, reaching more than $24 billion by 2025. Figures were based on the market assessments where medical and/or recreational use was legalized as of January 2016.
Retail chain ShowGrow, whose proprietors have been in the sector since the early 2000s, is building out bright and accessible spaces with upscale offerings. The company’s tagline is “Cultivate Change.” In the downtown Los Angeles location, you’ll find original artwork and fine chocolates. Other locations include Santa Ana, Las Vegas and San Diego.
ShowGrow’s Charles Boldwyn, the administrative operations and compliance officer, spoke with Crain's Los Angeles about the company's plan to take customers’ tastes higher and the evolution of the industry as they’ve experienced it.
Q: Tell me about ShowGrow’s inception. How did you develop the concept?
CB: The roots of ShowGrow trace back to late 2000 when the founders became involved in the California cannabis market. What [that environment] taught was the retail environment matters. Because of the pseudo-legality at the time, other operators were either unable or unwilling to capitalize stores properly. What [the founders] learned is creating a bright, well-lit professional environment really resonated with customers.
Q: For a new operator, what are the barriers to entry?
CB: Barriers to entry are many and are changing. Establishing vendors and creating the supply chain can be hard.
As far as having a core product - you can’t normalize the shopping experience because of different [laws in] states. The products lines are constrained by regulation. In each [area] we have access to different lines of products, but even that is constantly in flux. We’re started developing products internally, and we also take lessons from other producers out there.
Q: The patchwork of enforcement includes tricky land use provisions.
CB: One of the ways that I explain it to people is like strip clubs. They’re not illegal in California, but you don’t see them everywhere. The way that cities restrict them is land use [permits]. California has given broad authority to municipalities to control their own land. That effectively outlaws it even though it’s not criminal activity. We [in the cannabis industry] see essentially the same thing in California.
Q: What is next for ShowGrow?
CB: We’re developing a very high end vape cartridge. In that way we can provide high quality with a consistent supply [at every location]. We’re also working on high quality low-dose consumables. We’ve found there’s really a demand for that. Seventy to 80% of our product sales are in pre-packaged flower. We’re moving to a signature private reserve rather than just bulk counter sale.
The idea at the end of the day is a high-value product. Some people out there want to be the Walmart of cannabis. We want to be ubiquitous, but we don’t want the Walmart shopping experience - with everything strewn about and you can’t get anyone to to help you. We want to provide a better experience.
The biggest development on the horizon is six retail locations. ShowGrow wants to create a retail environment that is safe, affordable, and accessible. But we also never forget that we’re selling cannabis. It has a history in counter-culture and art and we don’t want to lose that.