CSA Exclusive: Rap star-founded cannabis retailer eyes new stores
Cannabis retailer Dr. Greenthumb is rapidly growing from its origins as the subject of a late 1990s rap song to a national, omnichannel enterprise.
Edwin Fowler, president, Dr. Greenthumb, recently sat down with Chain Store Age to discuss the evolution of the cannabis company from its roots as a creative concept of alternative rap group Cypress Hill to a California-based cannabis chain preparing to open new stores across the country, and eventually enter direct-to-consumer e-commerce.
“Dr. Greenthumb as a brand began as a character in the Cypress Hill song and video of the same name, explained Fowler. “It was an alter ego for (Cypress Hill lead rapper and Dr. Greenthumb founder) B. Real, driven by cannabis and complementary to it.”
After Cypress Hill had successfully participated in California’s legacy cannabis market of the 1990s, California began legalizing cannabis sales. B. Real decided to launch a company called Dr. Greenthumb Farms to produce branded cannabis products. This led to the opening of Dr. Greenthumb retail stores.
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“Retail concepts started in the last three to four years, with the first store in Sylmar, California,” said Fowler. “That has grown to six locations in California, after the first store proved extremely successful with high revenue and fanfare, spurring the drive to open more stores.”
Most recently, Dr. Greenthumb opened a store in San Diego. To date, each Dr. Greenthumb store has been opened through an independent licensing agreement. The licensed operators select their own POS and ERP systems, although this process is strictly regulated in the cannabis industry.
“It’s unusually complex,” explained Fowler. “Each state has different regulations about how you can buy and deliver cannabis. The ERP software used for ‘seed to sale’ tracking is different depending on the state. States mandate different software for POS and to track inventory. The POS has to integrate with the seed to sale system.”
The planned second wave of Dr. Greenthumb store openings, scheduled to begin in late 2021 in California and then expand into Colorado, Illinois, Florida, Massachusetts, Michigan, and Oklahoma in 2022, will not rely on individual licensing deals. Instead, Dr. Greenthumb intends to form a subsidiary, which it will partially own, to operate all future stores. The company will select its own “seed to sale, POS, and inventory tracking solutions.
“Our goal is to expand our format so we can make back-end operations consistent with POS, inventory and purchasing,” said Fowler. “We want to streamline the whole effort.”
Dr. Greenthumb also has an eye toward eventual e-commerce expansion. Online cannabis sale regulations vary by state, but currently cannabis retailers cannot engage in direct-to-consumer online sales.
“You can’t just have a warehouse, take online orders and ship them,” said Fowler. “That isn’t allowed in the current regulatory structure. You can’t send cannabis in the mail due to federal regulations.”
However, many states do allow cannabis retailers to sign up with third-party cannabis delivery platforms.
“The customer goes onto the app, chooses their dispensary, sees and orders their desired products,” Fowler said. “The store prepares the delivery and the sale is through the store. Then the delivery service picks up the order and brings it to the customer. Rules are different in every state; we will align with online delivery platforms where applicable.”
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Ultimately, Dr. Greenthumb seeks to spread the ethos of its famous founder wherever cannabis is legalized.
“The big point is, B. Real has an additional connection to his fans,” concluded Fowler. “Cannabis and music are core elements of that connection, dating back to Los Angeles cannabis culture. We fine-tune that experience for the local market. We intend to be in every legal cannabis market, nationally and internationally.”