ISSUE 25: Considering the Source
Massachusetts loses its first retail store as prices plummet.
Welcome to the 25th edition of Burn After Reading! This is my newsletter on cannabis (and occasionally other things). You can check out last week’s issue here, and if you haven’t subscribed yet, please do.
In this admittedly Massachusetts-heavy edition of BAR:
Prices are dropping and a dispensary just closed, but why?
An Egyptian-themed cannabis company is accused (again) of improper grow practices.
It looks like cannabis advertisements are just one stop away from being called up to the big leagues.
Plus, the usual round-up of interesting cannabis news from near and far.
Cannabis Prices are Crashing and A Dispensary Shuts Down Shop, But Is Schwag to Blame?
Average price per ounce and price per gram have been the talk of the town this month, as cannabis prices in Massachusetts continue to fall at an unprecedented rate.
The economic situation for cannabis retailers started to receive even more attention this week, as news broke that The Source+ in Northampton is closing its doors for good. This marks the first closure of a dispensary in the state’s history.
While my thoughts are with the 16 employees who lost their job just before the holiday season, I think the owners of The Source + are going to be just fine: Investors in this multi-state operator include the Schottenstein Family (estimated net worth in 2015: $2.7B).
I think it’s probably fair to say this store closing says more about Northampton’s market than it does about the overall situation in the state. After all, the city has one dispensary for every 2442 residents — a ratio that I’m going to guess is the lowest in the Commonwealth. A few reviews I found suggested that there was little to separate the shop’s selection and prices from its nearby competitors, a factor that may have also played a role in its demise.
Without knowing why exactly the store closed or what will end up happening to the store’s license, it’s probably best to not make too many inferences off this one data point. While falling prices and the swelling number of retailers may eventually lead to a cascade of store closures, I don’t think we’ve quite reached that point yet.
Flood of cheaper, lower quality flower driving overall prices down?
While it certainly seems that prices have come down in the past few months, stories reporting on the drops have been met with comments from some consumers who are saying they’re not really seeing this decline from their end.
I think it’s fair to say that the dramatic price drop on the graph has more to do with the market being flooded with low-grade shake/pre-ground material, rather than a universal drop in flower prices across the board.
There’s definitely a lot of shake, pre-ground material, “small nugs”, and other mid-quality (and potentially near its expiration date) cannabis out there for cheap, but true premium-grade flower, concentrates, and vapes still seem to be fetching a fairly high price. That being said, I have seen a few of my favorite flower brands drop their prices by $5-10 in just the last few days, so it’s possible the price drops have finally begun to impact premium products too.
It’s also entirely possible that the amount of media attention that the falling prices have received in recent weeks has accelerated the decline, as more customers start to realize what products should actually cost. When you combine this with the rapid increase in the amount of dispensaries in the state, plus the emergence of legal cannabis in bordering NY, CT and RI, it’s possible that the decline on the price graph is about to get even steeper.
Only time will tell. INSA — a company that has grown a bit of a reputation for attempting to sell $60 eighths — is, well…still trying to sell $60 eighths.
I guess whether or not people are buying them is an entirely different thing.
Ancient Egypt-themed Cannabis Company Accused of Unsafe Growing Practices, No ‘De-Nile’ Given from Executives
Westfield-based HEKA Cannabis is facing more accusations of unsafe growing practices this week, after two recently fired employees shared allegations that mold is rampant in the company’s grow facility.
This is not the first time that HEKA — an ancient Egyptian-themed company named for the deity of magic and medicine — has faced accusations of unsafe grow practices. Back in June, another ex-employee shared similar concerns with Western Mass News, saying that the company was skirting testing regulations by sorting through large batches of cannabis for a few uninfected nugs.
For a company that’s been open less than two years, it’s probably not great that they’re facing a CCC investigation and at least three separate allegations of shady cultivation practices.
Kudos to Western Mass News for covering stories like this. Accusations of workplace mismanagement can be difficult to verify, and it can be tough to differentiate between a scorned ex-employee and someone who has a legitimate axe to grind. It’s worth the effort though, as it’s become clear that the CCC alone can’t be the only ones looking into the behavior of the 191+ cultivators spread out across the state.
The Slow March Towards Major League Cannabis Ads
Verilife (the dispensary brand of MSO Pharmacann) announced this week that they inked a sponsorship deal with the American Hockey League’s Chicago Wolves. This is the first time that a minor league sports team in North America with direct affiliation to a major league team has done a direct sponsorship deal with a plant-touching cannabis company.
(For those of you who aren’t rink rats, the AHL is one level below the NHL.)
While this is the first direct cannabis sponsorship deal we’ve seen from a AAA-level professional sports team, we’ve seen similar deals right here in Massachusetts. Local dispensary Resinate has sponsored Worcester’s arena football team in previous seasons, and the AAA-level Worcester Red Sox have a cannabis-adjacent deal with Green Meadows Farms that allows the company to place ads outside the ballpark, with the right to first refusal if rules ever change to allow cannabis advertising within the confines of the stadium.
While cannabis hasn’t been called up to the big leagues yet, it seems like it’s only a matter of time. The main thing holding back the floodgates is the fact that none of the Commissioners of major sports league have signed off on these types of deals yet, likely motivated by the fact that some teams operate in markets where cannabis is still illegal.
Of course, we may want to call a brief timeout and ask ourselves if cannabis advertisements at sporting events are actually a good idea. Sure, arenas are already plastered with advertisements for beer and sports betting, but two wrongs don’t make a right. Plus, the only companies that are likely to be able to afford such sponsorship opportunities are large multi-state operators who already have a leg up on the competition.
If we want to use sports to normalize cannabis, how about we find a way to allow social consumption at sporting events instead? Even if I have to observe the action from an enclosed glass box like the old 600 club at Fenway, I’d much rather have the opportunity to smoke a joint at a hockey game than watch a Verilife-branded Zamboni circle the ice during intermission.
Quick hits
New England
Cannabis commission seeks 23% budget increase (Colin Young | Statehouse News Service)
Recreational Cannabis Sales Begin Next Month in CT. Here's What to Know (LeAnne Gendreau | NBC Connecticut)
A business wants to open a cannabis cafe in North Adams. Prime rib with cannabis-infused au jus would be on the menu (Greta Jochem | Berkshire Eagle)
National / Rest of U.S.
Robert Fireman, veteran marijuana industry executive with MariMed, dies (MJBizDaily)
Trademark lawsuit over Green Thumb’s marijuana edibles brand is dropped (MJBizDaily)
Trulieve Layoffs Continue, Now in Pennsylvania (Tony Lange | Cannabis Business Times)
International
🇨🇭 Europe’s First THC Adult-Use Cannabis Trial Set To Launch In January 2023 After Four Month Delay (Ben Stevens | Business Cann)
🇮🇲 Isle of Man medicinal cannabis dispensing service begins (BBC)
🇹🇭 Asia Welcomes First US Cannabis Edibles Brand (Zach Mentz | Cannabis Business Times)
🇨🇦 Canada increases cannabis drink purchase limit to 48 cans (MJBizDaily)
Upcoming New England / Virtual Cannabis Events
11AM-10PM. Newton.
7PM-10PM. White Lion Brewery, Springfield.
WELCOME DISTRACTION
Yes, this World Cup has been a grim reminder of the human rights situation in Qatar, the corruption of FIFA, and the United States’ inability to field a competitive soccer team. Yes, we tragically lost a beloved and irreplaceable US soccer journalist in the midst of the tournament. Yes, the tournament is being broadcast in the US by FOX, meaning you’re subject to MyPillow commercials and pro-Qatar propaganda at every turn. And yes, there’s zero evidence that this World Cup has resulted in a more peaceful or unified planet.
However! This weekend, over one and a half billion people (maybe more) will stop what they’re doing, momentarily forget whatever troubles life brings them, and watch 22 grown men kick a ball around a field for 90-120 minutes.
It’s not rational. But what is?
So tune in this Sunday (10am EST) to watch Argentina vs France battle it out.
Or — if you insist on not giving soccer a chance — just watch this hilarious video of the President of FIFA’s response to allegations of human rights abuses against Qatar.
CAT OF THE WEEK
It’s the holiday season, so I’m using Cat of the Week to do some good. Each week, I’m going to be highlighting a different cat that’s up for adoption at Baypath Humane Society. If any readers adopt a cat from Baypath (or your local shelter) OR make a $25+ donation, you’ll receive a lifetime paid subscription to Burn After Reading.
Last week’s pick is still available, but this week’s pick is: Lily & Poppy
From Baypath:
These social girls love pets, purring, and cuddling. These sisters grew up in foster with dogs and other cats, and get would do well with other cat friendly animals. These kitties never stray far from each other, and must go to a home together. They make the cutest kitten pair and enjoy snuggling up together, playing together, and grooming one another.. Lily is very outgoing, and really helps Poppy, who is a bit shyer, to come out of her shell.