Florida regulators shut down Circle K cannabis excitement
By Kaitlin Domangue
The industry was buzzing when Green Thumb Industries (GTI) announced plans to lease space next to Circle K dispensaries.
“The opening of Rise Express stores at Circle K locations is a game-changer,” said Ben Kovler, Founder and CEO of GTI, when the partnership was announced last week.
But Florida regulators are now saying the plan hasn’t been approved.
“The state of Florida has never ever approved the licensing of this sort of material out of a gas station. We have not approved this deal,” a Florida health department spokesperson told MJBizDaily.
Green Thumb Industries told MJBizDaily, “as with all dispensary locations in Florida, the opening of RISE Express stores remains subject to regulatory approval, and sales will be exclusively to Florida patients with a valid medical marijuana identification card.”
Should regulators approve the arrangement, RISE Express dispensaries would be adjacent to Circle K gas stations and only sell cannabis to licensed medical cannabis cardholders in Florida because recreational cannabis isn’t legal.
The multi-state operator planned to start with ten stores around the state in 2023. The dispensaries wouldn’t be accessible via Circle K’s entrances and exits, just located next to them.
Some people were excited about the initial announcement. Some people were repulsed and said they’d never buy gas station weed.
But some of y’all purchased half pounds of dry & crumbly reggie from a 2-door 2002 Honda Civic that’s seen better days, so I don’t know why we’re getting choosy over a well-lit gas station… but anyways.
Next steps for GTI & Circle K
The plan will be a lucrative opportunity if approved, despite some people saying they’d never support it.
There are roughly 700,000 medical cannabis patients in Florida, making it one of the nation’s largest medical cannabis programs.
Some suggested this move was to attract tourists. Still, Florida doesn’t have medical cannabis reciprocity and can’t serve out-of-state patients – so there’s no opportunity there until recreational cannabis is legalized.
Florida regulators didn’t say the Circle K/GTI plan wouldn’t be approved, just that it hasn’t been approved, and there’s no telling when – or if – it will come to fruition.
Silo terminates Marley partnership, proving the challenges of celebrity cannabis brands
Silo Wellness cut ties with Marley Green, the cannabis brand partly managed by Bob Marley’s estate, due to low sales.
“With sales not meeting the expectations that were set forth in the other previously announced distribution contracts, the licensing contract had remained a liability due to expenses far exceeding projected revenue,” said Silo Wellness in a statement.
“As mentioned in the previous MD&As, the goal of the Company was to amend the contract to defer payments out of future sales of licensed products in order to conserve cash to be used for inventory and marketing, or, alternatively, to terminate the contract and negotiate a payment plan for the remaining balance.”
Silo Wellness said they proposed allocating the budget towards marketing and inventory instead of upfront royalties several times. Still, Marley Green declined, and Silo did not want to proceed without a stronger marketing budget.
The celebrity brand pitfall
I’ve maintained that celebrity cannabis brands aren’t worth it from a business standpoint.
The industry is full of compliance, operational, and even consumer challenges that aren’t present in traditional industries. For the celebrity pulled in a million different directions and obligations: maintaining a successful cannabis brand is often not worth the hassle.
And for a celebrity like Bob Marley, who is no longer living and able to be a vocal part of the brand: the challenges can be even harder.
Bob Marley is one of the cannabis industry’s most beloved advocates, but his image alone isn’t enough to drive sales in a complex market like the American cannabis industry.
Celebrity endorsements increase a traditional company’s sales by an average of 4% compared to its competition, and the stock value increases by 0.25%. This doesn’t directly translate to the cannabis industry.
Cannabis consumers are not focused on branding – especially not celebrity branding. Price, THC, and flavor are the three major factors cannabis consumers focus on.
Just one celebrity cannabis brand made the top 100 California sellers of 2021: Seth Rogen’s Houseplant at approximately $9.3 million sold. This isn’t surprising.
Seth Rogen is vocal about how cannabis helps him with OCD and Tourettes. He has also immersed himself in the cannabis community by attending conferences, launching campaigns to demand legalization, and more.
Seth Rogen is, first and foremost, a cannabis consumer and activist, and he can serve this community with his brand and knowledge.
He even parted ways with Canopy Growth, and while his team didn’t elaborate much on why, I can only assume they had a different vision about serving cannabis consumers.
Some celebrity cannabis brands rely on the celebrity’s prominence to sell and not activism/consumer-focused decisions. That’s where Houseplant is different.
Marley Green and Silo Wellness’ recently-dissolved partnership is just another example of how challenging it can be to make celebrity cannabis brands successful.
Germany plans to legalize recreational cannabis
Yesterday, Germany announced its plans to legalize cannabis for recreational purposes. They’d be one of the first European countries to make this move – so it’s a big deal.
If the planned legislation comes to fruition, Germany will roll out a regulated program, and adults can purchase and possess between 20 and 30 grams of cannabis.
One report predicted legalizing cannabis in Germany would bring approximately USD 4.7 billion in annual tax revenue and cost savings. It would also create nearly 30,000 new jobs.
Germany legalized medical cannabis in 2017, and over 120,000 Germans have medical cannabis cards. Insurance companies also cover medical cannabis costs in Germany, reimbursing roughly 60% of medical cannabis prescriptions in 2019.
Mixed support from German leaders
But not all German states are on board with legalizing cannabis for recreational purposes. Bavarian Health Minister Klaus Holetschek expressed concerns about Germany being a European destination for cannabis.
“Consumption entails significant and sometimes irreversible health and social risks – and any form of trivialization is completely irresponsible,” he told a German news outlet.
For the supporters, there’s hope that legal cannabis will erode Germany’s illicit market. Approximately 4 million people consumed cannabis in Germany last year, and the adults of that group can be redirected to legal retail stores.
There is no timeline for this plan, so there’s no telling when sales will begin, or the legislation will be approved.