Five years later, Nevada's cannabis industry shifts from its initial growth boom to its next phase: growing up
DISPENSARIES MAY BE as ubiquitous in Las Vegas as Capriotti’s or Terrible’s these days, but it’s only been five years since recreational cannabis sales became legal in our state. Granted, it’s been an eventful time for all of us, but even more so when it comes to weed. “I call them marijuana years,” says Brandon Wiegand, chief commercial officer of The Source+ dispensary. “It feels like each year would be seven years in another industry, because so much change happens and so much innovation happens so quickly.”
He recalls the impact of the “tsunami of customers” that came on July 1, 2017, when dispensaries that had previously been open to medical cardholders began allowing anyone over 21 to purchase. “I think we had 50 to 55 team members in the entire organization — that was two dispensaries, a cultivation, and production facility,” he says. “When (recreational marijuana) hit, it was like a 500-percent increase in business.”
“We figured everything was about to explode — and it did,” says Evan
Marder, who is currently president of Fleur but opened Matrix cultivators during Nevada’s legal medical market phase. “We had two million-dollar months, I believe, in July and August of that year. There was so much we were growing that we weren’t able to sell in the medical period, but as soon as recreation started, we were able to unload that.”
While the industry is now moving from its growth boom to a more mature phase, it’s still innovating. And lucrative: Last year, cannabis sales in Nevada amounted to more than one billion dollars.
As the stigma of stonerdom wears off and more states sign up for legal use, the customer base has expanded; marijuana has become an item on the Vegas bucket list for tourists and a relaxation option for locals. Jon Marshall, COO of Deep Roots Harvest, explains, “We sort of have three different customers: The one that knows exactly what they want, the ones who want to know what the new brand or product is, and those never-ever consumers that have probably never been to a dispensary.”
Jessica Judd began as a budtender before progressing to senior marketing associate at Curaleaf Nevada and has seen the client evolve with the industry. “I think the knowledge of the customer has increased,” she says. “As a budtender, it was important for me to teach customers about the different products, the test results, and terpenes. It’s more than just sativa, hybrid, and indica.”
Of course, it’s bigger than just buds: Shops carry edibles from truffles to seltzer, wax and dabs, vape pens and infused pre-rolls. Marshall of Deep Roots Harvest is excited by the increasing variety of products. “Nanotechnology is super popular, the fast-acting (product) where you eat a gummy and you’re feeling it 15 minutes later,” he says. “Live resin, that’s a huge category — the distillate pens are really great, but you miss some of that organic flavor. The jury’s still out on the beverage market a little bit.”
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But creating all of these new ways to catch a buzz hasn’t been easy. Marder of Fleur recalls that developing their formulas and processes for extracts was “expensive, time-consuming, you had to build a whole staff to do it. I was a flower guy, and concentrates were new to me. There was a lot of R&D,” he says with a laugh. “Learning the nuances to creating an extract through hydrocarbons, through butane — there’s definitely a learning curve there, and an artistry.”
Building grow facilities, engineering production, opening and staffing dispensaries, and developing a line of dozens of products take major investment. Thus, the past few years have seen the rise of the multistate operator, an entity that holds licenses for and operates dispensaries, grow facilities, and production sites across several states (and sometimes Canada). It’s why you see the same brands in California that you see in Nevada — even though each product is grown/produced within the state where it is sold — and why the names on dispensary storefronts seem to be perennially changing. Most multistate operators work in a vertically integrated format, growing marijuana that they turn into product to be sold at their own stores, an advantage that can make it harder for individual operators and smaller businesses to get a foothold.
That corporatization is a development that budtender and medical marijuana advocate Rob Ruckus saw coming long ago. “When the first round of licenses went out, they went to old Vegas families,” he says. “If you didn’t have a park or a street or a school named after you, you probably didn’t get a license. And within five years, they turned around and quadrupled their money to sell out to a corporation. That’s why they got into this.”
Ruckus notes that there have been positive developments despite “everything going McWeed.” For instance, he says, “More people have access (to quality cannabis). There are some better products on the shelf, though it hasn’t gotten to where it should be.”
One major impact on the industry that no one saw coming was COVID-19. During the time when everyone was staying home on their couch and watching TV, cannabis, not surprisingly, found even more customers. Wiegand, of The Source, says, “The pressures forced us to be more innovative, in terms of building e-commerce, building the omnichannel shopping experience, giving customers the ability to view the menu and make a decision prior to coming to the store.”
Another big change is also hovering on the horizon: the long-delayed consumption lounges, which will finally give tourists a place to legally consume the cannabis they buy. However, there’s still a lot of hesitation and uncertainty as everyone tries to figure out what consumption lounges should be. Marshall muses, “Will it be like an adult arcade with pool and shuffleboard or bowling? Or is it more food and entertainment? Or is it more like a hookah lounge, where you come and hang out a little bit with some friends?” As the regulations are written, it could be any of those things or all three at once, offering the potential for not just a new marijuana market, but also a new form of nightlife.
It’s just one of the newest developments in an industry that has grown like the proverbial weed and, like many industries before it, is creating precedents even as it’s being created. “That’s one of the things I love about our industry,” Wiegand says. “It’s still malleable, you can get your fingerprints on it.” However, Ruckus hopes that those who are newer to the world of legalized cannabis don’t forget about the medical patients who started it all. “Don’t just look at the money; look at the good you’re doing in the world, look at the changes you can make in people’s lives,” he says. “Do that, and we can all win.”
Marder agrees that, while the cannabis industry is expanding, it doesn’t have to be about world domination. “When I first got into this, I was like ‘Yeah, we’re gonna take over the world! We’re going to be the next Coke!’” he recalls. “Now, I just want to be the best in Nevada. That’s good enough for me.”