Worcester Business Journal

www.wbjournal.com • Worcester Business Journal • 2 020 Economic Forecast 17 M assachusetts voters legal- ized medical marijuana in 2012. That was followed by a 2016 vote making recreational cannabis legal in the state. But the process of getting marijuana retail stores in the state was much more complicated. The state's first recreation- al marijuana stores didn't open until November 2018, and Worcester didn't get its first one until May. In its first full year, recreational marijuana was expected to generate $1 billion in sales. Instead, the industry has made $394 million in revenue in the 14 months since the first stores opened. The industry will grow, then contract. Of the 608 license applications from companies who want to grow or sell marijuana in the Bay State, 194 are from Central Massachusetts, according to the Cannabis Control Commission, the state regulating body. Of that num- ber, 30 shops have opened from Ayer to Worcester. As the CCC works through the back- log, more marijuana stores – both rec- reational and medical – will open state- wide, and in Central Massachusetts, in particular. Yet, as more open, it's likely some will not survive. Does Worcester have enough pot buyers to keep two dozen businesses in the black? Can Uxbridge sustain 15 pot retailers? Is there a need for 19 dispensaries in Fitchburg? The market will decide. Timothy Murray, president and CEO of the Worcester Regional Chamber of Commerce, may have it right when he told WBJ only the strong will survive. "It's like any other industry, some will succeed and others might have chal- lenges," Murray said. The industry will get more diverse. When voters approved the 2016 recre- ational marijuana ballot initiative, it had language saying the newly legal industry would disproportionately benefit com- munities who were hurt by the War on Drugs, particularly people of color. Yet, because of the cost and regulato- ry barriers to opening a new cannabis business, nearly all the operators in the state are white males, making up in January 85% of marijuana companies. Even among workers, 73% were white. The CCC continues to prioritize industry diversity with various pro- grams and is pushing for the aspects of the industry with lower cost barriers to entry – like transportation and delivery – to feature more applicants of color. As the industry matures, these vari- ous diversity programs and efforts will pay off. Prices will come down. The slow rollout of the industry – coupled with the high cost of entry – has created high prices for marijuana, with an eighth ounce of marijuana typi- cally selling in the $50-$60 range, which is about double what it sells for in other states with legal recreational cannabis. These high prices have helped keep the black market viable as the industry legalizes, as the street price is significantly lower than a dispensary price. Yet, as more legal cannabis stores come online in 2020, competition will bring the dispensary prices down. M A R I J U A N A W Marijuana will mature After a period of growth, the cannabis industry will right-size, while prices fluctuate BY THOMAS GRILLO Worcester Business Journal Staff Writer Top marijuana stories in 2019 >> Good Chemistry, Worcester's first recreational pot shop, opened May 1 Worcester's first recreational marijua- na dispensary, Good Chemistry, opened for appointment-only recreational sales May 1 after getting the final approval to open from the Massachusetts Cannabis Control Commission. The Colorado-based company, which opened as a medical marijuana dispen- sary on Harrison Street in summer 2018, was given a notice in late April from the CCC to commence operations in three calendar days, but the company waited until the following week after to open the store up to recreational cus- tomers over 21. The opening came more than two months after cannabis regulators gave their final license approval on Feb. 21. That triggered additional inspections before the final go-ahead. Good Chemistry became the first medical marijuana dispensary in Worcester when it opened at 9 Harrison St. in August 2018. The company said then it hoped to open for recreational sales by the begin- ning of 2019. The company was found- ed by San Francisco native Matthew Huron after his father and father's part- ner, both HIV patients, used medical marijuana. Huron, the company's CEO, said in a statement the company has had a good experience with Worcester through more than seven months of medical- only sales. "My grandparents settled in Worcester 25 years ago, and they really instilled in me the passion for agricul- ture and the importance of making life better for those around us," he said. "Good Chemistry was originally found- ed to provide medical cannabis for those in need, and we're grateful for the chance to continue that mission, and expand it for those seeking the benefits of adult-use cannabis." The Worcester License Commission in March approved the company's plan for the first 30 days, which calls for police details paid by Good Chemistry, securi- ty personnel, an appointment-based sales model and off-site parking for rec- reational customers only. The company said it has secured parking at 91 Washington St. and has directed customers to municipal park- ing lots in the area. Good Chemistry now has operations in Colorado, Nevada and Massachusetts. Five other cannabis businesses have submitted retail applications to open in Worcester. Nine others have entered into negoti- ations with the city for a host commu- nity agreement, which is a requirement before state applications with the CCC can be filed. Stephen Mandile of Uxbridge makes the first legal purchase of marijuana on Nov. 20, 2018 at Leicester dispensary Cultivate. Ross Bradshaw, founder of proposed Worcester marijuana store New Dia, who is a diversity applicant for a pot license The first customers at Worcester marijuana retailer Good Chemistry Continued on Page 18 Good Chemistry's Worcester store on Harrison Street in the Canal District P H O T O / Z A C H A R Y C O M E A U P H O T O / G O O D C H E M I S T R Y P H O T O / B R A D K A N E

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