Buffalo, NY (WBEN) - One of Western New York's first cannabis dispensaries says market saturation has caused it to close its doors next month. A cannabis microbusiness owner reacts.
"It doesn't surprise me one bit," says Tom Szulist of Innocence Cannabis, a microbusiness in Buffalo. What went wrong when NYS began licensing dispensaries? "I think it was having people that didn't understand the industry trying to regulate and trying to roll it out," says Szulist. "You couple that with the fact that it was very lucrative at first to get a license, because you could instantly have an endless supply of customers. So more distribution came, and with that, who gets moved to the top of the list and why. There's money involved, and things aren't always the way they should be." He adds in some places within a four block area, there's four dispensaries, and he wonders why should a consumer be loyal.
Szulist's business is a microbusiness. "What that means is that I am a producer-processor, and I could sell direct to the public, which means that there's an advantage for customers to come to me, as opposed to a dispensary that is just buying product and reselling it," says Szulist. He says margins are very tight. "If it weren't for being a micro business, there's no way I would be in this industry, because between the regulation and all the restrictions and then the cost of doing business, everything is inflated," adds Szulist.
That includes pricing. "When you look at the pricing for consumer, the prices they're paying for product, in my eyes, is kind of ridiculous to pay. $50 or $60 for an eighth of an ounce of cannabis. Our pricing is much lower, because we don't have that whole system of markup. You know, I don't have to sell to dispensary at $30 and they sell to the public at $60. Instead, I'm just going to the public at 35 or 40, because that's where the market to me should be, and it's going to eventually go there," explains Szulist.
Szulist says the gold rush is behind everyone, and now many are realizing this is a marketplace and must find a way to stand out. For that reason, he believes there will be more who will have the same fate as Dank 716.