August 13, 2022

The first and only medical cannabis dispensary in the Richmond area has opened a location in Short Pump, the latest in a string of new or upcoming marijuana shops around the state.

Green Leaf Medical opened its first satellite dispensary at 11190 W. Broad St., a former KFC and Long John Silver’s drive-thru in the Shoppes of Best Buy shopping area, earlier this week.

It’s the latest indicator of Virginia’s embryonic and ever-evolving marijuana business, and it comes roughly a year after the state’s first medicinal marijuana sales.

With the inauguration of Dharma Pharmaceuticals’ dispensary and growing facility in Bristol in October 2020, medical cannabis sales began. Later that year, the other three state-licensed cannabis pharmaceutical processors, including Green Leaf’s enormous 125-employee operation on Richmond’s Southside, followed suit with the opening of their own dispensary-and-growing facilities.

Green Leaf and its competitors still have plenty of room to expand their physical footprints a year later. The operators consider the future recreational marijuana market when they plan their dispensaries.

A new business venture

In Virginia, the young medical sales side of the sector has seen steady volume so far, but it still has a long way to go.

Phil Goldberg is a columnist for the New York Times

Green Leaf President Phil Goldberg said the state’s patient base has been reluctant to grow, which he blamed on restrictions to buy weed online providers’ promotion, such as a ban on billboard displays.

According to a spokesman for the state’s Board of Pharmacy, there were around 34,000 registered medical cannabis patients and little over 900 certified medical practitioners in Virginia as of mid-October. The state’s medicinal cannabis operators can only sell to registered medical cannabis patients.

In late October, Goldberg observed, “We have a long way to go, we have to get the word out.” “I believe a lack of advertising is one of the reasons we don’t have 60,000 to 80,000 patients (statewide) at this time.”

Medical cannabis programs, according to Green Leaf’s experience in other states, tend to draw roughly 2.5 percent of the population. According to Goldberg, Virginia might eventually have over 200,000 registered patients.

Despite this, Goldberg and other medical cannabis owners in the state said they’ve had solid sales since opening their dispensaries in Virginia, particularly after the September introduction of marijuana flower and joint sales.

Since its inception, Columbia Care, which has a state license to operate in eastern Virginia, has seen a 10% month-over-month increase in sales. Ray Hernandez, the company’s Virginia director of operations and pharmacist-in-charge, claimed in late October that the company’s growth has recently been closer to 20% since the launch of flower products.

The company, which employs around 30 people, inaugurated its 65,000-square-foot dispensing and growing facility in Portsmouth in December.

Hernandez, Ray

BizSense was unable to obtain revenue numbers from any of the state’s four medical cannabis businesses. The state does not levy a tax on medical marijuana sales.

From marijuana flower buds and vape cartridges to tinctures and edibles, dispensaries provide a wide selection of cannabis items. Smokable items, particularly marijuana flower, tend to be the most popular among patients, according to several operators.

“From what I can gather, roughly 70% of the products supplied are probably flower, pre-rolls, and vape cartridges,” Hernandez added.

According to Shanna Berry, a co-founder of area operator Dharma Pharmaceuticals, patients’ interest in different treatments appears to be more evenly spread in southwest Virginia.

There are now four licenses.

There are only five medical cannabis pharmaceutical processor licenses available in Virginia, one for each of the state’s health care districts. Each license holder is limited to a single growing-processing-dispensary facility, which is the only place where cannabis can be grown. They’re also allowed to open up to five satellite dispensary outlets.

The goods that license holders sell in Virginia must be made from cannabis cultivated in the state.

Jushi Holdings, based in the Northern Virginia suburbs of Washington, D.C., rounds out the state’s medical cannabis roster, which includes Dharma, Green Leaf, and Columbia Care. Following a June acquisition, Columbia Care now controls Green Leaf.

There is currently no active medical cannabis operator in the remaining health service region, which includes other sections of Northern Virginia and the Shenandoah Valley. The state’s Board of Pharmacy, which oversees the state’s medicinal cannabis program, and cannabis business PharmaCann are locked in a legal battle over the license.

PharmaCann’s conditional approval for a permit was revoked, and the board denied the application. PharmaCann’s license was revoked, according to the board, since it failed to build a cannabis processing facility in the period provided by the approval procedure.

PharmaCann has filed an appeal, and the case is now being heard in Henrico County Circuit Court. A fresh application procedure could begin if the judge rejects PharmaCann’s appeal, but not until the matter is entirely settled, according to a Board of Pharmacy spokesman.

Deliveries and dispensaries

Green Leaf Medical, a medical marijuana processor and dispensary based in Richmond, just opened a satellite dispensary in Short Pump and is looking for future facilities in Colonial Heights and Ashland.

Medical cannabis operators in the state have yet to fully exploit their potential satellite dispensary footprints, but a number of satellite dispensaries have opened or are in the plans across the state.

Last November, Green Leaf opened its dispensary in Manchester, which is part of its 82,000-square-foot processing and cultivation complex. A second satellite dispensary has been set up in Carytown, but it has yet to open.

The company spent $600,000 on the construction of its Short Pump dispensary and intends to spend $500,000 on its Carytown dispensary, which will be located in the former Need Supply storefront.

The firm is also considering opening dispensaries in Ashland and Colonial Heights, though it hasn’t decided on a location in either city yet. For dispensaries, the business favours buildings with drive-thrus, such as former banks or fast food restaurants.

Green Leaf continues to invest in delivery services as it continues to open dispensaries. It recently added five more vehicles to its fleet, bringing the total number of vehicles to 18 to 20.

While operators must place their satellite dispensaries inside their respective health service regions, delivery service is unrestricted and provides a way to reach more patients. For its own business, the corporation makes around 3,000 deliveries per month.

Columbia Care uses Green Leaf cars to deliver in Virginia, but Columbia Care wants to begin its own delivery service by mid-2022.

“Delivery entails a bunch of difficulties, logistics, and additional costs,” Goldberg explained. “However, it is what the patients desire.” It’s exactly what everyone desires.”

According to Hernandez, Columbia Care’s Virginia operations director, the company hopes to open its first satellite dispensary along the Virginia Beach oceanfront by the end of the year.

According to Hernandez, Virginia Beach accounts for 35% of the company’s Virginia patients, making it a top target for expansion.

He believes the Peninsula will be the site of Columbia Care’s third dispensary, with Williamsburg, Newport News, and Hampton all being considered. It plans to open two dispensaries on the Peninsula in the future.

Jushi Holdings, a Northern Virginia-based medical cannabis producer, recently launched a dispensary in Sterling under the Beyond/Hello label. (Photo credit: Jushi Holdings)

In December, Jushi built a dispensary at its Manasass growing and processing plant. What was once a 30,000-square-foot building is currently undergoing a 93,000-square-foot expansion, much of which will be used for additional growing area.

The firm wouldn’t specify how many plants it grows at the location.

According to Michael Perlman, Jushi Executive Vice President of Investor Relations, the project is projected to be finished in the second quarter of 2022. According to Perlman, the facility might potentially be expanded to 250,000 square feet.

In early November, Jushi inaugurated its first Virginia satellite dispensary, an 8,000-square-foot location in Sterling.

Beyond/Hello dispensaries are slated to open in Alexandria, Arlington, and Woodbridge, according to the firm. It’s looking for existing stores with drive-thrus and more than 50 parking spaces near highways.

Perlman, Michael

According to Perlman, the buildout expenditure for a Jushi dispensary in Virginia is upwards of $2 million, and the company expects its Virginia outlets to be between 7,500 and 10,000 square feet. Due to the necessity to cover more land with each store in light of the state’s cap of six dispensaries per licensee, the Virginia stores will be larger than Jushi dispensaries in other states.

Perlman said of the company’s Virginia market, “These six stores have to feed into two-and-a-half million people.” “We build large so that more patients can come in.”

In the spring, Jushi began its own delivery service. According to Perlman, the two-vehicle pilot program has been warmly received by patients thus far.

The operator situated in the D.C. suburbs aims to use its capacity to distribute anywhere in the state to focus on the licensee-less Health Service Area 1, which includes Northern Virginia’s outlying areas and reaches into the Shenandoah Valley.

Perlman stated, “We do plan on being able to grab part of the market that isn’t being serviced in Health Service Area 1.”

Since its inception, Dharma Pharmaceuticals’ growing and processing facility has moved from Bristol to Abingdon, and the company has been bought by Chicago-based Green Thumb Industries. The Rise cannabis dispensary chain is owned and operated by Green Thumb.

Green Thumb is a cannabis store with manufacturing and growing operations in multiple states. In early July, the business announced the acquisition of Dharma Pharmaceuticals.

Shanna Berry is a model and actress.

In August, the firm launched its first satellite dispensary in Salem. Berry, a co-founder of Dharma Pharmaceuticals and a member of Green Thumb’s Virginia leadership, said the firm was looking for more dispensary locations but wouldn’t say where they were looking.

Despite the fact that the pandemic has caused recruiting issues across the retail industry, Berry said the company has had a pretty easy time locating people, a circumstance that other operators in Virginia have also seen.

“When we post a job description, we get a flood of applications and resumes.” In a mid-October interview, Berry noted, “There are so many people in the commonwealth that have waited so long to be a part of the industry.” “We were extremely fortunate to have such a big pool of potential applicants from which to chose.”

Taking a look at the retail market for recreational goods

The future of Virginia’s recreational marijuana market is unclear, but medicinal cannabis businesses in the state are eager to participate in whatever movement there is. Following last week’s elections, the balance of power in Virginia has changed toward the Republican Party. Regulations are being contested, laws must be reenacted, and the balance of power in Virginia has gone toward the Republican Party.

Virginia lawmakers are discussing moving up the start date for recreational marijuana sales, which is presently set for January 2024. Today, a work group comprised of members of the state’s cannabis oversight panel was to debate recommendations for expediting the process.

Under current law, each of the existing medical marijuana operators would be able to sell recreational marijuana at each of their six shops. In response to recommendations from the state’s legislative watchdog body, some lawmakers have expressed interest in reviewing that number.

If recreational marijuana is legalized, Green Leaf’s Goldberg predicts that fewer people will seek to register as medicinal cannabis patients.

“I believe that with the addition of adult-use, we will see three times the number of patients that we would see at full capacity with medical,” he said. “While the laws are being written and (lawmakers) meet on adult-use to determine the extent to which we will participate in the adult-use program, it’s a bit of a wait-and-see situation.”

The outcome of last week’s elections may also have an impact on the market’s launch.

Given that the Republican Party appears to be on course to win a majority in the House of Delegates, it’s unclear how reenactment of the legislation by the General Assembly, which is essential for the retail market’s start, will play out. The bill’s initial passage was based on party-line votes forced through by Democratic majorities in the House of Delegates and Senate.

According to Virginia Mercury, the GOP also won the governorship, while Gov.-elect Glenn Youngkin’s campaign stated that he would not seek to repeal legislation that legalizes marijuana and paves the framework for the recreational marijuana market.