When marijuana was outlawed in Arizona, smoking the plant’s flower was the primary way to feel its effects.
Now adults and medical patients can instead choose vape pens, gummies and even beverages.
Machinery filled and sealed a long line of tall slender cans made and sold by the Flower Shop AZ on a recent Thursday morning.
The ingredients are flavored water, some of the psychoactive chemical THC and an injection of carbon dioxide.
Seltzers grew popular as booze drinks. A link with alcohol might chafe some in the marijuana biz. But Vikki Doolitte thinks that it’s spirit makers who should be annoyed.
“We’re coming in on their market share,” Doolitte said.
Doolittle is sales director for a firm called YourWay Cannabis Brands. The publicly traded company owns an Arizona-based extract maker that also does white-labeling of marijuana products known as shatter, diamonds and distillate.
Arizona’s third year of legalized marijuana has been hard for people in the industry. The thumbs of growers have become so green that there is an oversupply. And as multistate operators set up, local brands have to compete for shrinking shelf space in a limited number of dispensaries.
“It’s definitely a big war out there. We’re just out of prohibition,” Doolittle said.
To her a point, a lawsuit recently filed by the marijuana company Doolittle used to work for against her current employer alleges there was a kickback scheme involving others to get products into dispensaries.
Doolittle is not a defendant. Nor is she mentioned in the complaint.
Doolittle was actually recruited into the cannabis industry from the long-established greeting-card giant Hallmark.
She switched jobs after her husband urged her to seek a new challenge. Then he died of COVID-19.
The outpouring of support from marijuana industry people she hardly knew has made them Doolittle’s family.
“And so I will do everything I can to help any brand,” she said.
Employees with the Flower Shop AZ sort marijuana buds inside the company’s San Manuel grow facility.
Arizona brands of marijuana used to be all there was available in state-licensed dispensaries. Doolittle estimates that now local products account for less than half of store displays.
“And some of these kinds that are coming in have much larger marketing budgets than the local Arizona ones,” she said.
The result is local brands get cannibalized. Then those that survive still have to compete with multistate operators, which run most Arizona dispensaries and have their own marijuana products.
They can make reciprocal deals to get them displayed to consumers.
“And the smaller brands don’t have that option. So they have to get very creative on how to get onto their shelves,” Doolittle said.
The Flower Shop AZ is an example of a multistate operator. Its stores are supplied by a huge grow operation in southern Arizona, an industrial kitchen that makes seltzers and more, plus a separate operation for marijuana extracts where a machine filled vape cartridges with distillate.
The capsules will eventually go into vape batteries for a product line that also features low-dose edibles. It was created by Flower Shop president Greta Brandt.
“There was nothing that was specifically geared towards women. And I saw that as a missed opportunity,” Brandt said.
An employee of the Flower Shop AZ readies a machine that will fill vape cartridges with marijuana oil for a product line designed for women.
Key to a startup brand making it, in her opinion, is careful product research to fill a known or perceived void in the market. Then signing business agreements that guarantee customers will see it at dispensaries.
“Nothing is worse than investing millions of dollars into your operation. And then realizing getting shelf space to actually sell this product is almost, nearly impossible,” Brandt said.
Arizona has an abundance of marijuana right now in an environment of extreme competition. Brandt says cannabis brand wars are happening as operators dig in and get lean.
“What we’re experiencing right now is a valley, right? We’ve only seen peaks,” Brandt said.
Large amounts of marijuana are for sale. The challenge is pricing low enough to draw a buyer without destroying value after having spent millions on cultivation, manufacturing and retail.
“We don’t want to drop the bottom on this market so that people can still remain in business,” Brandt said.
She thinks the marijuana industry is on the way back up.
Like in the hospitality business, cannabis companies can’t wait for snowbirds to arrive.
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When marijuana was outlawed in Arizona, smoking the plant’s flower was the primary way to feel its effects.Now adults and medical patients can instead choose vape pens, gummies and even Read More