Blending Botany and Medicine

The Botanist opens a flagship dispensary in New York, one of the most fascinated and coveted locations in the country

Unquestionably one of the largest cannabis companies in the United States, Acreage Holdings has licenses to operate in 19 states and plans to open 60 dispensaries by the end of 2019.

But beyond its ever-broadening national footprint, Acreage is digging itself a toehold in one of the most coveted and fascinating markets in the country: The Empire State.

As New York state officials continue to debate the merits and framework of an adult-use program, Acreage opened The Botanist in the Queens borough of New York City, the company’s third medical dispensary in the state and a flagship retail outlet for what will likely become one of the hottest cannabis markets in the world. Acreage’s corporate headquarters are also located in New York, giving it an added level of importance within The Botanist’s fast-growing parent company.

“It’s our backyard, quite literally,” chief marketing officer Harris Damashek says.

Although the legalization of recreational marijuana appears imminent in New York, Damashek says it’s too early to know specifically how legislative changes will affect Acreage and The Botanist, but acknowledges that company executives are “keeping close tabs” on the process.

“We’re obviously very excited by the prospects of our program expanding,” he says. “We would be enthusiastic participants, when and if that’s possible.”

Each Botanist location is designed with a similar motif, but individual differences to match the neighborhoods in which they reside.

Health and Wellness

One of the major challenges of designing The Botanist was finding a balance between the medical and recreational segments of the cannabis market.

“We know we’re going to play in both areas,” Damashek says.

For obvious reasons, it was important for the company to create a retail brand for the restrictive medical markets — where Acreage currently has the bulk of its operations — without needing a major overhaul to fulfill the needs of an adult-use market as state-by-state legalization marches forward. To that end, Damashek describes a Venn Diagram of cannabis retail, with health and wellness representing the intersection of the adult-use and medical categories; The Botanist fits squarely within that health-and-wellness motif.

Damashek says studies have shown that more than 50% of marijuana consumers in recreational markets are “self-medicating” for one ailment or another, such as insomnia, chronic pain or anxiety — and he believes the real percentage might be even higher, so everything about The Botanist was designed to make shoppers comfortable.

From the lush, abundant greenery to the sparse, uncluttered displays, the dispensary chain evokes a sense of familiarity, in which even the most inexperienced of cannabis consumers can feel at home.

“For me, the litmus test is whether my mother would feel comfortable shopping there,” Damashek says.

In that regard, he says, the company succeeded.

Each Botanist location follows a similar design concept, with a uniform color palette and design features. But every dispensary also has unique components to match the flavor of the neighborhoods and communities in which the stores are located, Damashek says.

“The Queens store is certainly, I think, one of our most beautiful stores, and it fits well within The Botanist brand and design concept,” he says.

With the relatively new medical markets of the East Coast, consumer education is critical, so The Botanist features plenty of space for educational events, informational materials accompanying products and displays, and private spaces for people to have consultations.

“The idea that the mainstream is coming into the category of cannabis is incredibly exciting and important to us,” Damashek says. “A lot of people who are completely new to the category lack education and we really wanted to create a safe, comfortable shopping experience and retail environment for people.”

The pervasive greenery and natural wood tones create “an environment reminiscent of visiting a 19th century greenhouse laboratory, offering a welcoming place for consumers to engage in all things cannabis,” the company said in a press release announcing the opening of the Queens location.

The interior was designed by award-winning Canadian architecture and design firm McKinley Burkart.

During its pre-launch research, The Acreage team visited cannabis retailers in the major recreational states, including California, Colorado, Oregon and Washington, as well as medical dispensaries throughout the East Coast. Damashek doesn’t mince words when describing other dispensaries — “a myriad of terrible retail and shopping experiences,” he says — as cluttered spaces and the general feeling of illegal activity persisted.

“A lot were a mix between a pawn shop and a porn shop, complete with bouncers out front, making people feel really intimidated,” Damashek says. “We really wanted to blow the doors off of that entire experience.”

Damashek says he also saw a recent poll of marijuana consumers in California and Colorado indicating that more than 50% of women didn’t feel comfortable shopping in dispensaries.

“That’s half the population and that’s a major problem,” he says.

Acreage Holdings is making its first retail play in Canada with the acquisition of Kanna Inc.

New York

California may have been the tipping point for the national legalization movement, but New York could be the domino that pushes Northeastern medical states into the adult-use market.

Democratic Governor Andrew Cuomo, now in his third term, has done a political about-face on cannabis; once a stubborn skeptic of medical marijuana, then an avowed opponent of recreational legalization, he now intends to make the Empire State the 11th to allow adult-use cannabis.

The proposed Cannabis Regulation and Taxation Act would legalize marijuana for adults over the age of 21. State lawmakers could vote on the bill in April, and if passed, it would create an Office of Cannabis Management to oversee a new recreational program, as well as the existing medical program. Adult-use retail sales could start in early 2020.

New York’s existing medical marijuana program is notoriously restrictive, though the state expanded the scope of the program in 2018. Each of the state’s 10 current licensees is allowed four medical dispensaries (NYCanna, an affiliate of Acreage Holdings, is one of the 10 registered organizations). Of the 40 eligible dispensary locations, 32 have opened for business.

As of March, the state had 94,646 certified patients — less than 0.5% of New York’s 19.4 million residents. By comparison, Pennsylvania, in the first year of its medical program, already has 116,000 registered patients, 83,000 of whom have been issued medical cards; Arizona has more than 180,000 registered patients — nearly 3% of the state’s 7 million residents.

Although many details remain unknown, full-scale legalization is expected to be an economic boon for New York’s 10 registered organizations, but it could also mean a substantial increase in competition, as the state licenses additional businesses to serve the massive local market, plus more than 60 million tourists annually.

The Botanist’s dispensaries were designed with new consumers in mind, including plenty of space for educational materials and events.

Expanding Brands

Acreage Holdings is in the process of rolling out a number of different house brands “to appeal to what we think are consumer groups and segments with specific needs, ranging from medical brands to lifestyle brands to more targeted brands,” Damashek says.

Among these brands are the health-and-wellness focused Botanist line, the medical Prime products and Superflux, an urban lifestyle brand set to roll out in the Oregon market later this year. Acreage Holdings also recently completed its acquisition of Oregon-based Form Factory, a manufacturer and distributor of cannabis-infused edibles and beverages.

“It’s going to allow us to be co-packers for the cannabis industry for all kinds of other brands, and we’ll be able to hand-pick and select the best brands out West and bring them to our 19 states,” Damashek says.

The move represents an important step into the ultra-competitive West Coast, where thousands of brands are fighting for market share, compared to the dozen or so major players back East. With established dispensaries in Maryland, Massachusetts, New York, North Dakota and Ohio, and more storefronts coming soon to Massachusetts, New York and Ohio, Acreage Holdings made its first retail play west of the Rocky Mountains in March by acquiring Kanna Inc., which has a license to operate a dispensary in Oakland, California. The shop is scheduled to open under the Botanist brand in the second quarter of 2019.

“I could not be more excited about our first dispensary operation in California, especially one in a limited competitive market,” Acreage Holdings founder, chairman and CEO Kevin Murphy said in a press release announcing the acquisition. “While this is our first, it is nowhere near our last, as we expect to significantly expand our dispensary footprint in the state over the coming months.”

During a recent tour of California, Oregon and Washington, Damashek says he sent his whole team to Mainstreet Marijuana in Vancouver, Washington.

Mainstreet is Washington’s top-selling cannabis retailer, a veritable marijuana emporium, the likes of which do not exist east of Colorado. Thousands of products; hundreds of brands; shelves and displays packed full of every flower, edible, concentrate and accessory imaginable.

“This is the worst-case scenario,” Damashek says. “This is where it gets really, really hard, and this is what we want to avoid. It’s a great market for a consumer, but really hard as a brand or a business to make money.”

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