Cannabis City Hours
8 am - 10 pm Every Day
421 S Lander St
Seattle, WA 98134

(206) 420-4206
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Author Archive for Bob Mortensen

Last-Minute Gift Guide for the Pro-Canna-Crastinator

Volume 2 | Issue 14 | 12-23-20

The Pro-Canna-Crastinator’s
LAST MINUTE GIFT GUIDE
Hand-picked selection of favorites by our very own Cannabis City budtenders so you can feel confident you’re giving the very best.

• CONCENTRATES •

BUDDIES
REAL GLUE LIVE RESIN WAX

1g $36.00

MFUSED
ANIMAL CRACKERS

1g $38.00

MIGOS
BRANDED BATTERY

$16.00

MILLENNIUM
TROPICANA COOKIES

.5g $25.00 | 1g $36.00

MIGOS
BRANDED BATTERY

$16.00


• FLOWER •

ROCHESTER FARMS
MAC 1
1g $10.00 | 1/8oz $35.00
1/4oz $70.00 | 1/2oz $135.00

NOVO DIA
SENSI STAR

1g $7.00 | 1/8oz $22.00 | 1/4oz $40.00

HOUSE OF CULTIVAR
SUNDAY DRIVER

1/8oz $45.00


• PRE-ROLLS •

FIRE CANNABIS
5 PACK PRE-ROLLS

2.5g $10.00

HOUSE OF CULTIVAR
GAS PACK

.5g $10.00


• EDIBLES •

HONU EDIBLES
GIMME SA MORE! S’MORES 10PK

100mg $30.00

SMOKIEZ
DELTA 8 1:1
SOUR WATERMELON 10PK

100mg $30.00

HONU EDIBLES
PEANUT BUTTER CUPS 10PK

100mg $30.00


• TOPICALS •

CERES
DRAGON BALM
ANCIENT OINTMENT

2oz 16.00


 • ACCESSORIES •

SMOKE CYCLONE
JOINT STEAMROLLER

$30.00

RAW SIX SHOOTER
VARIABLE QUANTITY
CONE ROLLER

$20.00


TODAY ONLY


TOMORROW

12.13.2020 – Narrows: Tres Dawg 3.5g Flower $25 -> $15 


Cannabis City New Location & Cannabis Cultural Center Update

The pot shop heard around the world is about to make waves again! Our new location grand opening is coming up fast, and we are excited to take another new leap. Scroll down to see images of our progress, and stay tuned for more updates to come.

MJ Biz Daily – Small Biz Survivor – Podcast

Small Biz Survivor

Chris Walsh:

Hello listeners. And welcome to Seed to CEO, the podcast about making your way in the cannabis business. I am Chris Walsh, the CEO of MJBiz.

In today’s episode, I talk to industry pioneer, James Lathrop of Cannabis City, which was the first recreational marijuana shop to open in Seattle. James shares his business insights and lessons learned from running a single store for nearly seven years. He also walks us through his outside-the-box plans to compete as chains and bigger stores emerge.

I’m here for this episode with James Lathrop, the founder of Cannabis City. This was the first legal recreational cannabis store to open in Seattle, all the way back in July 2014, which was an eternity in the cannabis industry.

So in this episode, we’re going to focus on what it takes to successfully compete in cannabis retail over the long haul, especially as a small and independently owned business. And we really want to dive into what else you can do beyond the basic blocking and tackling of running a store to stand out in the market.

Thanks for joining us, James. And welcome.

James Lathrop

Yes, hello. Thank you.

Chris Walsh

So I understand you’re calling in from your new location that you plan to move into shortly. Is that correct?

James Lathrop

Yes. And I have been working on this for a year and a half. I was hoping to be in here last summer, and you know, COVID, and all that. But we’re down to the final stretch.

Chris Walsh

Great. So there might be some background noise as people are drilling and hammering a little bit, but we’ll work through it.

So I’d really like to guide listeners through your competitive approach over the years, so that as people enter the industry, they can get an idea of how you can compete as a one-store operation and how to evolve over the years as the competitive situation changes. I want to come back to your new location. What led to that and how do you think that will help grow your business and compete – and the other things you’re doing around that.

But I’d like to start by going back in time a little bit to 2014. When you first opened, can we get an idea of what the competitive situation was like? You were the first one in Seattle? Was this an “if you build it, they will come” mentality that you had? It’s just like “open our doors and deal with the demand and we’ll go from there?” Or was competition on your mind from day one?

James Lathrop

Competition certainly is sort of always in the back of your mind when you’re opening up a retail location or doing any kind of new business. However, in that situation, this was really unique. I had to win a lottery slot to get a spot to apply for the initial application. I actually had to have a, quote, “legal location.” But the Liquor Control Board – now renamed as the Liquor and Cannabis Board (LCB) actually had not mapped out what legal locations were. There were guidelines and the guidelines where you had to be 1,000 feet from five entities. Now that’s three football fields, from every library, every school, every inner city park, including a dog park, every video game arcade and every transit center, major transit center. So you had to basically, yourself, figure out how to be three football fields away from all of those.

But also in a commercial zone, you can’t be in a residential zone. You’ve got to be within the city compliance. Then you actually had to secure a location with a lease to be able to even apply for that lottery position.

So I actually had two locations that I had locked down. I picked a location in the industrial area of Seattle, because it was the only sort of guarantee that this would be a legal location. And I knew it wasn’t going to be good retail. But I also knew that if I could get an early start that I could do well, at least initially. And certainly we did.

Chris Walsh

Yeah. So when you opened up there was a huge line around the building, correct?

James Lathrop

Yes, actually around and down the block. And it went on for months. Because luckily for me, actually, not only were we the first ones open in Seattle, we were the first ones to get licensed in the state.

They actually held our license though for two weeks so they could license a few other locations. So on July 8, 2014, five locations across this state opened up, but the nearest location to me was about a two-hour drive. And so I really had the entire Seattle metropolitan area to me alone for about two months. It was two to three months before the second store actually opened up. So that was amazing.

Chris Walsh

I bet. I mean, talk about a great situation to walk into. You’ve got all the buzz and hype about this new industry. And you’re the only player at first, you have that first-mover advantage. How long did that fuel you, you said for about two months?

James Lathrop

Well, it really fueled me for that those first two years. But it was amazing for the first two months. However, with a significant caveat.

The LCB had not licensed very many producers, marijuana producers or growers or processors, at that time. And in fact, they also refused to tell me who they licensed. They had a list of producer-processor applicants that I could get hold of, which was basically addresses. And they said, “You can contact these people yourself.” But most of them hadn’t been licensed. Most of them haven’t been growing.

You needed at least a 90-day lead time to get your crops going. And they were just beginning to license producer-processors. So that’s one of the reasons why other retailers were not in a rush to open up. They were kind of like, “Well, let’s wait until there’s actually product available.” Because I actually had situations where I had a line around the block for several days. And then I had no product – zero – for two weeks. I actually closed the doors. Then I’d get some product, and I’d open it up.

One of the things we started doing is we started flying the Washington state flag when we had product, and then everybody would come. And then we take the flag down when we didn’t have product. So that unfortunately went on for those first few months. And then by the time at the market stabilized with product, then other stores were opening up.

Chris Walsh

Gotcha. That’s a great idea with the Washington flag.

So you dealt with supply issues. Were you trying to stay under the radar as much as you could in that situation a little bit? Or did you have an aggressive kind of advertising?

James Lathrop

I wanted to be on the biggest radar I could. We had CNN out front when we opened up and every other news station and I wanted every producer and processor, potentially, to know where I was because like I said, the LCB wouldn’t actually tell me who they licensed and who was ready to go, they just wouldn’t give me that information. So I needed them to reach out to me.

Luckily, I did have an initial relationship with a producer processor. And so that had my initial 10 pounds of product that we started off with. And we sold that in three days. Unfortunately that particular processor, I really wanted to kind of be his exclusive. I was like, I’ll take everything you have, everything you make this year, next year … be my guy. And unfortunately, he was sort of trying to think long term and saying, “you know, I want to have relationships with other stores.” So he wouldn’t do that for me. And he only gave me that initial product. And he kind of saved some product back for other stores. And unfortunately, he actually ended up going out of business.

They didn’t survive. And I believe that if he had really gone into that relationship with me that we would have been able to help each other in those early days.

Chris Walsh

Well, I’m wondering, you said two years you had basically a first-mover advantage that was playing out and a lot of that sounds driven by the media.

James Lathrop

It was.

Chris Walsh

It got a lot of media attention, you type in a couple keywords and boom, you pop up. How did that morph over time? Okay, you capitalized on that, that was great. And then can you tell us, was there a time or a period when you realized or started to pay more attention to how you compete as the market matures, as more stores open up as this normalizes a little bit? Walk us through some of the things you did at that time. Say this is how I’m going to stand out.

James Lathrop

Right. And I knew, it’s kind of like I knew Initially. I knew from the very beginning that this was a crappy location. I was in the middle of an industrial district. There’s zero walkability, nobody lives down here. There’s no condos. I had no parking lot, just street parking. And I’m on a very busy street where you feel like you’re gonna get hit when you park in front of my store. So I knew the location was not good.

On the other hand, I had all these people around the block for months and months and it was interesting because I was like, well, maybe this location will work over time. And at the end of the day now, six years later, no. My numbers have steadily dwindled and dwindled and dwindled, because of location, you know. And so at the end of the day, it is retail. Retail is retail. And retail – a lot is in location.

But I did do some things particularly to stand out. For example, we covered the face of our building with dichroic film, which actually changes color between a bright yellow and a deep purple with greens and blues, depending on the viewing angle. And this was a product, a combination of products that we put together to create this on the siding. And it’s a very unique image that I’ve never seen anywhere else.

So we did things like that to really draw attention to the store. But during that process, nine other stores were … eight other stores, there were nine in total, opened within a half-mile radius of me. And that was mind blowing. I couldn’t believe it.

I knew this was a bad area for retail. I knew it was a bad location, and eight other people opened up stores – and five of them have gone out of business. But the reason why is because the zoning restrictions. There wasn’t anywhere else for them to go in the city. So people were just trying to open their store anywhere. And unfortunately, they were all right here.

Chris Walsh

Right. Well, I think that’s an ingenious idea of what you did with the colors to draw attention to your location.

When you look at the five that didn’t make it, what did you see in those operations that you can say, “Here’s why I think they didn’t make it” and why you are still there? And even though it’s been tough, tougher in recent years, you’re still here, and you’ve got a future ahead of you, and you’re, you’re expanding into new offerings, what did those ones who didn’t make it do wrong?

James Lathrop

Well … one, their location was not that great, as mine isn’t. And so they’re trying to come into a market that’s already saturated.

And ultimately, they also didn’t really focus on really creating a real customer service experience. I mean, they were, they were just weed stores that opened up in a crappy location. And, you know, actually, only a couple of them actually went out of business or sold their license. A couple of them moved. But it just is basic retail that they couldn’t survive.

Now, the ones that are still here, one of them was basically the third store to open in Seattle. And so I was the first, there was a second in another area of town, and then the third was here in this area of town. And so that third one got that nice boost of being really kind of the only one in the area.

And the other two that are left, both have better locations than me. They’re still in SoDo, but they have parking lots, they’re right next to some 24-hour fast food joints, and both of those have multiple other stores. So they can actually run these locations at a loss, which they pretty much have been doing to try to put me out of business, because they have revenue from the other stores.

So that’s where I have been for these last three years. Knowing that I needed to move to a new location.

Chris Walsh

Preferably near a taco bell.

James Lathrop

Exactly.

And I actually found an amazing location in a retail district of Seattle, with a high walkability, with condos, with living areas, that was 1,000 feet from everything. And I actually purchased that building and was intending to move my license there.

However, there was a little glitch, in that it was in a historic district of Seattle. And back in 2013, before any legal stores were open, there were all these medical stores opening up, and the city council had put in a restriction on no marijuana sales in the historic districts because they didn’t want these medical marijuana shops cropping up in the historic districts of Seattle.

So that was on the books, and I just took a gamble, thinking that I could work with the council in getting that lifted, because it really wasn’t meant to apply to retail. But I lost that gamble for a variety of other reasons. There were some other things that happened and changes in the law. And ultimately, I had this building for three years, I tried to get that code revised, and I had to sell the building. So now I’m on my second second-location attempt that I’ve been working on for the past year and a half.

Chris Walsh

Well talk to us about … you mentioned, not an ideal location. And there’s, there’s really nothing you can do once you get your location, invest in it and open your business for a while. So if you’re stuck in a position like that, a lot of people are entering the industry and they may be forced into less desirable areas …

James Lathrop

Exactly, whatever they can get, because a lot of times landlords won’t rent to you. The zoning restrictions usually are excessive over typical retail zoning restrictions. So yeah, sometimes – a lot of times – it’s just that you’d have to take what you can get.

Chris Walsh

Right and and in other cases, maybe you thought you had the right location, and then you realize down the road that it isn’t good. And so when you’re forced or when you find yourself in that situation, what else did you do, to stand out to compete to kind of lessen the negative aspects of that location?

James Lathrop

So one of my very initial plans, unfortunately, also didn’t pan out. But when I was going into this location, I knew it was a not-ideal location for retail. But it is a very central location within the city. So my plan was to have this very small shop, it’s only 600 square feet. It’s a very small shop, and then 10 vans to do delivery throughout the city. And certainly in other states, that may be an option.

Unfortunately, our original marijuana law prohibited delivery, and it still prohibits delivery six years later. So that was kind of one of the things I was hoping to do with this location – add delivery – and that would have made all the difference. But the delivery continues to be illegal in Washington.

Chris Walsh

Right so you there’s a lot of trial-and-error as you dealt with this challenge and different options. So when we go forward a couple years after you open, the situation’s changing. And one of the things that you have said in the past is that you realized at some point that inventory could be a huge issue. And I think you realized that you offered too many products. So how did you kind of start realizing that that was an issue? And what steps did you take to kind of re-engineer around what you learned?

James Lathrop

Yeah, that was about three years ago. I forgot we had that conversation.

That was quite significant we had … part of it was, I was kind of learning this. So I’m a nurse practitioner, I had a medical marijuana clinic. Prior to that I was doing ER and urgent care. So kind of, that’s how I got into this. I’ve never been a retailer actually, in any kind of retail. I’ve never really been a marijuana guy, as far as selling it.

So this is all new and, kind of, the products and developing retail stores has been my background. And so part of it has been my lack of experience.

And then also the people that I hired, I was hiring the people that were available to me, the people that were around me. And unfortunately, over the last six years, I’ve gone through four different store managers and about six different buyers. Right now, I have the right people in the right positions. But it took a long time to get to that.

I think if you have a good buyer and you have a good manager, I think they’ll be able to get their head around the products.

One of the things that our previous mistakes were was just buying everything that was available, partially because I think we had this sort of desperation of, in the early days, we couldn’t get anything, right? And so when there was something on, we buy it and we buy it. We bought a lot of product that was exceedingly high priced, because it was early in the market. And we bought a lot of it.

And then we were stuck with it.

The cannabis law also prohibits you from selling it for less than acquisition price. So we actually had weed that we had bought in bulk in these early days that basically their producers had gouged us on price so significantly, that as the prices came down, we couldn’t sell it. We couldn’t even deal with it, we couldn’t give it away. That’s illegal. And we couldn’t sell it because we couldn’t even sell it for half of what we bought it for. Because that was illegal. We had to sell it at least for what we bought it for. And we bought it for it such a high price that it was garbage.

We had actually pounds that had to get destroyed. Because I couldn’t sell it.

Chris Walsh

So you went from a situation where you couldn’t get enough product. And then a couple years down the road for the reasons you mentioned, you found yourself in a situation where you couldn’t sell part of your product.

James Lathrop

Couldn’t sell it. And then the other thing that we did with, you know, and this is a lack of experience with retail, is that we had a lot of different producers. So at one point, I think we had 169 different vendors. Now remember, my store is 600 square feet. So that, and that’s not 169 products, that’s 169 vendors, and each vendor probably had anywhere from 2 to 5, to 10 products. You think “oh, great selection.” No, it’s overwhelming for the customer. The customer comes in and it is like “I can’t pick.”

And so one of the things in retail is, yes, focus your retail down to the customer. Give the customer something they can focus on. And so we’ve pared that down, I think at this point, we carry about 40 vendors, and we really focus it.

And the other thing is I also kind of redesigned the store. So I really have it set up clearly and easily for the customer. We have a sativa counter, an indica counter, hybrid counter, oil and waxes, joints, and then edibles. And all of those kind of in their own area. So … as soon as you walk in the store, you can get your head around what’s there and what you are looking for – boom.

Chris Walsh

Yeah, I’ve been into stores before where it is overwhelming. So you want to provide the customer selection and diversity of products that people crave, but you’ve got to find that balance. Can you talk to us briefly, what’s the discipline or the process that you apply? Now, you know, whittling down significantly the number of products and vendors, how do you make those decisions? Who makes them? What do you look at? How much say do customers … how much do you reach out to customers?

James Lathrop

Again, I think there’s a couple ways to do it. As a small independent business owner, either you as the owner need to take that on, or you need to hire somebody who can really get their head around it. And so luckily, Allan, who works for me and who is our lead buyer, I have really given it to him and he has run with it and it has done a fantastic job.

So now he knows kind of what my expectations are. My expectations are that we find a variety of price points, that we can price things and make margin, that we have the whole spectrum of products covered between the different flowers and the oils and edibles, and that we really limit the number of vendors to that kind of 40-50 range. So I sort of have those parameters based on the experience over the last six years. And then I really let him go with the products and, and he’s done a fantastic job.

Chris Walsh

One of the things I’ve heard is that retailers in the cannabis industry – not all of them, but a lot of them – basically don’t have a strategy behind what they stock and that they rely on, “Hey, our budtender says this. So let’s grab it.” How much input do you take into account from the actual budtenders? I know the edibles companies and the flower companies, they try and get in good with the budtenders hoping they’ll influence the decision. How does that relationship work at Cannabis City?

James Lathrop

We use our budtenders to provide feedback mostly on the products that we’re picking. I think we’ve got a solid enough selection that they’re not really coming to us with, “oh, I saw this product at some other shop.” And I really like it – partially because I also want my budtenders to shop at my shop.

But there was a time where other stores were sort of poaching our staff by giving them incredible industry discounts. So I have allowed my staff to get basically the product at cost, because I’m like, I want you guys to shop here.

But one of the things that we do is that we use Slack as a communication tool. And the budtenders, they get samples to enjoy an experience. And one of the requirements is that they basically Slack out comments about those samples. How does it look like? How’s the presentation? What do they, you know, How’s that feel? And we use that feedback as kind of information about the product.

Chris Walsh

Now, that’s really interesting – how much of this revolves around relationships? You know, the cannabis industry, I’ve noticed versus other industries, is that relationships, developing trust, meeting someone face to face, all of that is higher importance than a lot of other sectors that I’ve been close to. So, you know, do you approach it like we have to know the people involved? We have to … have this type of relationship first? Or is that less of a concern?

James Lathrop

No, absolutely. And that’s one of the things that I want to get back to.

So that was certainly my role in those first couple of years, when we couldn’t even find product. I was driving around the state, I was trying to identify farms and producers, and I would make appointments and I would meet with them. And I would go to their farms and I would meet with the owners and meet with the reps. And those relationships were tremendous in developing those products early on.

For the last few years, I’ve really been more focused on doing these buildouts and the new location. So I haven’t had time to be driving around the state. But that’s actually one of the things that I really want to get back to. In fact, once I’m through this construction, one of my personal goals is to basically go to every farm that we carry, and see them and meet with them and sit down with them and have a smoke with them and really continue to cultivate that relationship.

Chris Walsh

Yeah. And so it sounds like it’s the importance of that still rings true to this day.

James Lathrop

It does, you know, and this, this … Basically, I think two ways to approach it. Either the aggressive jackass way, which several stores do that, in that they have three or four or five locations. So they can buy in bulk, you know, they can do a $60,000 purchase. And so they’re like, we’re this awesome store with all these locations, and you have to sort of grovel to us and get the great price. They really kind of crush some of these producers.

So then when we approach them, and we’re like, “Hey, we really want to have a relationship with you. And we really want to build your brand within our store.” They’re like, “Oh, god, yes.” And I can’t even work with them anymore.

But you know, that’s basically the two approaches either, as a retailer, you’re actually there to help build somebody’s brand. Or you’re there as a retailer more on the, say, the Walmart model, to just be the cheapest price. And I’m going to beat you down until I get it. And I guess it’s you know, it’s a different approach.

Chris Walsh

Well, I’d like to fast forward to more recent times and talk about what you’re doing and what you’ve done to compete in this kind of new era of cannabis, as we’ve seen it mature in places like Seattle, we’ve seen the emergence of the MSOs, of chains, and basically this general trend of you need to “go big or go home” in a lot of cases – or a lot of companies at least view it that way.

You’re operating one location. And you know again, the landscape is changing of giant chains in in many states now. So as the industry has changed, how have your competitive strategies changed to keep up with that?

James Lathrop

And it’s, … it’s partially been also what’s been available to me because, frankly, when I first opened this door, it wasn’t my intention to just have one store. My initial goal was certainly to have three or five stores. I never wanted to have 20 stores.

I did consider going into other states. I flew up to Alaska prior to its legalization and had potentially secured a location and was considering that. One of the problems with multistate, like, for example, with the Alaska law, is that if I wanted to open a store in Alaska, I actually had to be a minority partner. So then that would be me going up to Alaska, finding a location, getting a license, branding it with Cannabis City Anchorage, and then giving a majority ownership to somebody locally. And that wasn’t all that appealing, because I would completely lose control. And then how do you manage a store that’s, you know, 1,500 miles away?

So although I’ve considered that, you know – and I also went down to Arizona prior to the recent legalization – I also decided, personally, I would be too stretched to go multistate. I would have loved to have added a couple more stores here in Seattle or the Washington area. But I haven’t been able to secure additional licenses. It’s been a very difficult and competitive market to do that.

So ultimately, I came down to, I have a store, I have a brand. I have a customer base that loves us, even though it’s a difficult location. And what could I do with that? What I decided ultimately I could do with that is build out a Cannabis Cultural Center. So I took over a 4,000-square-foot space that’s right on the light rail. And I’m in the process of building out. It’s going to have a cannabis shop that’s 1,500 square feet, but also another 3,000 square feet of a bar, restaurant, coffee shop, pizza shop, music stage, presentation stage and glassware. And it’s going to have the feel of a cannabis club. But cannabis clubs are illegal here in Washington state. And so unfortunately, I can’t serve THC drinks, I basically have to serve alcohol. So it’ll be a beer/wine bar as a cannabis club now. Maybe, in the future, we’ll be able to have cannabis clubs, and I can switch my beer taps out for THC taps. And I hope we can.

Chris Walsh

That’s a fantastic idea. So what are you hoping to accomplish by this? You’ve kind of rethought the plan forward and said, “Okay, we’re going to have a retail base, we’ve got a good customer base as well. But we’re going to expand kind of in this new direction.” How does that kind of fit into your longer-term plans? And what are you hoping to accomplish through this?

James Lathrop

There’s basically two reasons for that. One is, we’re still in the industrial area. So it’s still a very low walkability area, but I am on the train. So people from all over the city now could come to me. So what I need to do is I really need to create a draw, I need to create a location. Why would somebody get on the train and come to me versus go to their nearest pot shop? So I’m converting from … essentially what I have is a liquor store or a pot shop, you know, your local community liquor store. I’m converting from that to an actual destination. And that’s how I can create the draw for here.

The second factor with it is the 280E code – which I don’t know if we can sort of get into but just so that your listeners understand. There’s this federal IRS 280E code which taxes retailers off of gross, not off of net, OK, off of gross. Which means that I have to pay federal tax on money that I give away. When I pay my employee, it’s not a write off. I actually have to pay federal tax on the money that I give to an employee. And that’s beyond obviously, the employee tax and Social Security. I’m talking, I am taxed as profit on money that I spend on my rent, on my electricity, on my internet, on my employees. So the 280E code is crushing, especially for smaller businesses. Now, if you are making a million dollars a month in retail profit, then those fixed costs go down. And the 280E code isn’t as oppressive. The 280E code is oppressive if you’re at basically a tight margin, and you’re really not making any profit, because then you’re paying tax on money you don’t have. And we’ve been in that situation for the last three years. So that is untenable.

Chris Walsh

Right. That’s a big, big issue in the industry. So you’re looking to diversify away from some of those challenges?

James Lathrop

Exactly. So basically, I need two things. I need my revenue to go up so I can clear the 280E hurdle. And so that’s creating a location with a draw that will have higher volume. And then two, I’m basically building another business at the same location. And that business can operate normally. So I will make more profit by far on the beer and wine than on the weed. And it’s just like when you run a restaurant, you make all your money on the beer and wine instead of the food.

That’s kind of what I’m doing. I’m going to sell weed, but probably make more money on the beer and wine than the weed.

Chris Walsh

That’s an interesting shift. I think … kudos to you for thinking outside the box.

As we get closer to wrapping up here, are there any thoughts you have looking forward? Seeing how the industry is changing? And what are going to be the major challenges for a business like yours as we get into the age of consolidation of change across the country? What are you looking at right now?

James Lathrop

Yeah, you know, I mean, the one thing I can say is, I can’t believe that six years later, you know, basically, nothing has changed at the federal level. That certainly is not what I would have expected. When I opened this store, I knew that these challenges and the banking challenges and the tax challenges were there. But I thought a couple years? This will get sorted out. Certainly the public opinion is there. But of course, the chaos of the last administration, and now the chaos of that pandemic, marijuana has been low on the list.

So I’m surprised that six years into this that we’re still having the same banking and taxation struggles. I do hope – I can’t say expect, but I hope – that this will get resolved this year, next year. And if we can have legal banking and normal taxation, you know, then I can function as a business.

Now, if you get full federal legalization, yes, you are going to have consolidation. And I can tell you, companies like Philip Morris, they’re ready to go. I mean, the conglomerates are going to want to get in this industry when they can. What does that mean for somebody like me? I’m not really sure. As simply, strictly a pot shop, do I have something that somebody would really want to pick up in that situation? I mean, I guess it depends on the availability of the licenses.

But I’m also building a unique brand that is unique to this location and Seattle. And frankly, I want this to be something that when you come to Seattle, you’ve got to go to the first Starbucks in Pioneer Square, you’ve got to go to the Space Needle, and you’ve got to go to Cannabis City. That’s what I’m building for the long term.

Chris Walsh

I love it. I love that vision. And I agree, I think the big tobacco, big agriculture, big tech, big you name it, are all lining up and either making their first forays or cementing plans to do so when they feel comfortable. So I think we’re going to see a lot of change going forward, hopefully in the right ways.

So you know, as things like that happen, there are going to be new challenges and new struggles, but hopefully new opportunities, especially if you apply the type of mindset that you are doing right now and basically saying, “OK, let’s reevaluate where we’re at and think of something that’s going to be sustainable and different to attract attention.” So great job with that.

Before we sign off, I did want to ask you, what would you do differently if you were starting a cannabis business today? Applying all the lessons you’ve learned along the way?

James Lathrop

Yeah, you know, it’s hard to really say, you know, what choices I would make differently based on hindsight. Certainly that building that I purchased, that didn’t work, you know. If I’d known that wasn’t going to go through, I wouldn’t have done that. But with the information that I had at the time, I still would have made all the same choices.

I think the one thing I probably would have done differently is that I had an offer to my store for $1,000,000 three days after we opened because we were the only one and we had a line around the block. And had I known, you know, six years later, I’m on the verge of bankruptcy because of taxes, yeah, I might have taken that million dollars.

But you know what? I’m still having fun. And this is going to be cool.

Chris Walsh

And you’re positioning yourself for hopefully, many more millions down the road.

James Lathrop

Exactly.

Chris Walsh

Maybe you’ll look back and think differently. So all right, James. Well, thank you for joining us. I really appreciate it.

James Lathrop

All right. Thank you.

[music]

Chris Walsh

All right, so that concludes my interview with James Lathrop, the CEO of Cannabis City in Seattle.

I focused the conversation around how you can compete as a smaller mom-and-pop shop with one location, because it’s getting increasingly harder to do this as the dynamics of the industry change.

James highlighted a competitive challenge that’s common for all retailers, and particularly for those in cannabis. And that’s location. You can say it three times like the old cliche or 10 times or 100 times for added emphasis. It truly is that important.

The challenge in cannabis is that you often don’t get to choose from among the best locations, because of zoning regulations or landlords who refuse to rent to you because of that silly old stigma around marijuana. I’d say it’s kind of like picking between Spam or maybe liver and onions for dinner. Sometimes you just got to take what’s given to you and plug your nose and make do and find a way to get by. While that’s changing, it’s still a big issue for cannabis retailers.

Aside from trying to make his building standout and searching for a new location, James dealt with this issue by really focusing on differentiating himself through customer experience – and particularly through refining his product selection and having a strategy and point person dedicated to it.

He also touched on the importance of building a relationship with your suppliers, designing your space for customer ease and getting budtender feedback, but not letting them drive the decisions on what you stock.

And a tip he shared based on success his competitors have had? Locate next to a Chik-fil-A or Wendy’s, get that munchie crowd in.

Finally, I like how James is thinking outside the box to compete in the future by developing a cannabis culture center/bar/entertainment space, which he actually thinks might even surpass cannabis revenue because of 280E. He really looking at creating a destination, in big part because of his location, and not just a store.

This highlights the importance of adapting as you move forward and being flexible, which really is critical to success in this rapidly changing industry.

Now speaking of 280E, check out our investigative series on MJBizDaily.com about how the IRS handles cannabis tax audits.

And that’ll do it for this episode. Thank you all for listening. Feel free to share this with others and post a review on whatever platform you use to listen to podcast. You can also follow us on Twitter. Our handle is @MJBizDaily.

Be sure to join me for the next episode when I’ll be speaking with Chris Ball, the CEO of cultivation company Ball Family Farms, about how he successfully transitioned from the illicit market to the legal market in California. I guarantee it’s going to be a good one.

Until then, make sure to check out MJBizDaily.com for the latest news, analysis and data on the cannabis industry and sign up for our newsletter. See you next time. https://mjbizdaily.com/https://mjbizdaily.com/podcast/small-biz-survivor/

Canna-cado Toast with Goat Cheese, Tomatoes, Basil, & Pine Nuts

Our Avocado toast has all the fixings, including an amazing high. We used cannabis-infused olive oil to toast the bread and roast the tomatoes for a deliciously blended dish that is the perfect addition to a spring afternoon.

cannabis-infused-avocado-toast-recipe
Ingredients
  • 1 pint cherry tomatoes
  • 1 avocado
  • 1 head garlic
  • goat cheese
  • 1 baguette
  • 4 Tbsp cannabis-infused olive oil (our recipe)
  • 1/4 cup pine nuts
  • 1 bunch fresh basil
  • alfalfa sprouts
  • balsamic vinegar, salt & pepper

Preheat oven to 425 degrees.
Cut tomatoes into halves, thinly slice onions, and roughly chop basil.

Toss tomatoes, garlic, basil, and pine nuts in 2 Tbsp cannabis-infused olive oil, sprinkle with salt and pepper, and roast for 12-15 minutes until tomatoes begin to blister, and garlic begins to brown.

Meanwhile, cut the baguette into thick slices, spread both sides with remaining cannabis-infused olive oil, and place on a cookie sheet. Once tomatoes are cooked, reduce oven temp to 375 and put bread in for 14 minutes, turning halfway through. 

Slice avocado and cut the length in half. Remove toasted bread from the oven and cool. Spread with goat cheese, then avocado, roasted tomato mixture, and top with sprouts. Drizzle with balsamic vinegar, and enjoy!

Deviled “Devil’s Lettuce” Infused Eggs

Our Deviled Eggs have a little more Devil in them for an elevated dish that will leave you on a high note. We add roasted garlic, butter, cheese, fresh dill, freshly chopped shallots & pickles, in addition to our “not-so-secret” ingredient, cannabis (also known as devil’s lettuce.)

Ingredients
  • 10 eggs
  • 1 dill pickle
  • 1 shallot
  • 1 head garlic
  • 2 Tbsp Parmesan Cheese
  • 1-2 Tbsp Olive Oil
  • 3/4 cup Mayonnaise
  • 1 Tbsp Dijon Mustard
  • 1/8 Tsp Salt
  • 1/8 Tsp Pepper
  • 2.5 Tbsp Canna-Butter (room temp)
  • Splash Hot Sauce
  • Paprika (for garnish)
  • Fresh Dill (for garnish)

Pre-heat oven to 350 degrees.
Peel the outer layer of garlic and cut off the top exposing the tops of the bulbs, then place in foil and drizzle with olive oil. Wrap up and put in the oven at 350 for 50 minutes. Allow to cool completely, then push out cloves.

Meanwhile, place eggs in a single layer in a large pot and cover with an inch of water. Bring to a boil and remove from heat. Allow it to sit for 12 minutes, then place in an ice bath. Cool completely.

While the eggs and garlic cook, finely chop 2 Tbsps shallot and pickle and 1 Tbsp dill.

Once eggs are chilled, peel in cold water and slice in half lengthwise, removing yolk. Next, place yolks in a mixing bowl with garlic, mayonnaise, dijon mustard, shallot, pickle, parmesan cheese, salt, pepper, and a splash of hot sauce.

Whip yolks with other ingredients until light and fluffy.

Put yolk mixture in a piping bag or spoon mixture into egg whites. Top with a sprinkle of paprika and dill, and enjoy!

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Cannabis-Infused Chicken “Pot” Pie

Spring is right around the corner, but the air is still crisp and perfect for a winter soup. Our chicken “pot” pie is loaded with everything you need to nourish your soul; veggies, bacon, cream, and, you guessed it, pot.

Ingredients
  • 1 1/2 cups cooked diced chicken
  • 1/2 cup cooked bacon
  • 1/4 cup onion
  • 1/2 cup celery
  • 1 cup potatoes
  • 1/2 cup corn
  • 1/2 cup peas
  • 2 tbsp minced garlic
  • 4 tbsp cannabutter
  • 1 3/4 cup chicken broth
  • 1/4 cup Sherry
  • 1/4 cup flour
  • 1/2 cup cream
  • 1/4 cup milk
  • 1 tsp salt
  • 1/2 tsp pepper
  • 1 tsp fresh thyme
  • 1 large egg beaten
  • prepared pie dough

While store-bought broth will work just fine, if you love a house that smells like the comfort of home, you can easily make your broth the day before. Just throw chicken, carrots, celery, onions, garlic, and herb in a boiling pot and simmer it all day long.

Pre-heat oven to 425 degrees.
In a large saucepan, melt cannabutter over medium heat. Stir in onions and garlic and cook until fragrant.

Add Sherry and carrots, celery, and potatoes. Continue to saute until Sherry reduces in half.

Add broth and simmer until vegetables begin to soften (around 8 minutes).

Whisk together flour, milk, and cream and add to the pot. Stir in salt, pepper, and thyme. Simmer on low until thickened. (around 10 minutes)

Stir in chicken, bacon, corn, and peas and remove from heat. Poor into empty 9″ pie dish.

Roll out dough to 1/8″ thick. Using your favorite cookie cutters (or your cannabis cutters like ours), cut out shapes and cover the pie’s top.

Brush the top with beaten egg and bake for 30-35 minutes until the crust is golden brown.

Allow to cool 5 minutes and dish out and enjoy! The cookie-cutter crust makes it easy to dish out while keeping your crust intact to stack atop easily.

Cannabis City New Location Update

Cannabis City’s new location and Cannabis Cultural Center are coming along great and expected to open in Spring 2021. Below are pictures of our progress on the new space, and stay tuned for everything to come!

Cannabis is Coming Up in 2021

2021 is already looking up compared to 2020, but even more so in the Cannabis industry. 2020 brought about the opportunity for Cannabis to take the stage as an essential business. People are beginning to realize the many benefits legal Cannabis offers. The growing industry has created over 300,000 full-time equivalent jobs nationwide, 77,300 of which were added in the last year alone. Washington state accounts for almost 20,000 of those jobs. Washington state’s marijuana tax income for the 2019 fiscal year was $395.5 million. This makes marijuana excise taxes the fastest-growing component of the state’s general and selective sales tax revenue streams, according to a study from WSU. 

On February 15, Washington state lawmakers advanced Cannabis even more, when a panel of lawmakers voted to decriminalize it for personal use. This vote marked the first time a panel of lawmakers in any U.S. state has voted to remove criminal penalties for possession of all drugs. Another advancement on the way is Washington State House Bill 1019, which is gaining momentum and would allow anyone over 21 to grow up to 6 plants. 

But Washington isn’t the only state in which Cannabis is coming up. Many other states are following suit, and the federal government doesn’t appear to be far behind. Three Democratic senators have announced they will introduce legislation this year to remove marijuana from a nationwide list of prohibited drugs. If this passed, it would make it legal for all adults in the United States to use marijuana recreationally. 

2021 also marks the year of the first Cannabis Cultural Center in the state of Washington. Stay tuned for more information on the grand opening, and be sure to stop in to learn more about Cannabis, the history of Cannabis, and how it continues to be a growing trend nationwide.

Sources

Senate Democrats Plan on Moving to Legalize Marijuana Later This Year

Bill allowing homegrown marijuana gains momentum in Washington state Legislature

Washington Lawmakers Approve Drug Decriminalization Bill In Committee Vote

Legal cannabis adds $2 billion to Wash. state economy, report finds

Washington State Treasurer

Five Cannabis Infused Drinks to Elevate your Valentine’s Day

Valentine’s Day is just around the corner, and we would like your day to be of the HIGHEST caliber. Whether you want to start at brunch, drink by an afternoon campfire, or warm up after being out in the snow, we have you covered. Below are five cannabis-infused drinks that will elevate your Day and leave you feeling great Monday morning.

Bloody Mary-Jane

  • 1-2 teaspoons of Demitri’s® All Natural Bloody Mary Seasoning
  • 6-8 oz. tomato juice
  • Ice
  • Salt Rim
  • Illuminations Lemon Mint or Lime Hard Candy
  • lime wedge
  • Pickled Garnishes

Canna-Cocoa

  • Warm Milk
  • Hershey’s syrup
  • Dark Chocolate Sea Salt 420 Mini
  • Whipped Cream
  • V-Day Sprinkles

Twice-Spiced Apple Cider

  • 1 Packet Apple Cider Mix
  • 6oz hot water
  • 1 shot Cider Red Wagon Cider Drink
  • Cinnamon Stick
  • Orange Zest
  • Heart Shaped Apple Slice

Canna-talian Soda 

  • 2 Capfuls Cedar Creek Simple Syrup
  • 1 Can 7-up
  • Splash Raspberry Syrup (or flavor of choice)
  • 1/4 cup Half & Half
  • Whipped Cream
  • V-Day Sprinkles

Hot Buttered-Hash

  • HASH MIX – 1.5 Sticks of Butter, 1/2 Stick Canna-butter, 1 Cup of Confectioners Sugar, ½ Cup of Brown Sugar, ½ Cup of White Sugar, creamed
  • 2 Tbsp Hash Mix
  • 1 tsp of Vanilla
  • ½ tsp of Nutmeg
  • 2 Cups of Ice Cream, Softened
  • 6-8 oz Hot Water
  • Whipped CreamV-Day Sprinkles