Oklahoma retailer sets plans in motion to franchise brand across the U.S.
Cannabis entrepreneurs across the country are experimenting with new business models and breaking down yesterday’s notions of what a dispensary should be.
Take, for example, Eufloria. It’s quite possibly one of the most unique cannabis retailers in the country, an open-carry-allowing, open-24-hours, franchise-model medical marijuana dispensary located inside a coffee shop with a cannabis consumption patio out back. In Tulsa, Oklahoma.
The kiosk-style dispensary occupies about 150 square feet of space, plus 150 square feet of storage, but operates like a full dispensary. The coffee shop regularly features live music and offers a variety of non-infused foods and beverages.
Eufloria also has a traditional, standalone storefront that opened first and generated about $168,000 in revenue from the end of September to the middle of December 2019.
CEO and co-founder Eric Dangler says the company has already done the legwork to franchise the brand both in Oklahoma and states across the country (the franchise company and the corporate stores are held under separate LLCs, with the franchise company owning the rights to the Eufloria brand). The company also has a CBD-only franchise model for prospective retailers looking to operate in states where THC is still illegal.
Marijuana Venture: What made you decide to go the franchising route before you had an operating store or a proof of concept that you knew was going to be successful?
Eric Dangler: You could just tell there’s a lot more money behind the industry than there is actual knowledge. And I think the projections for the industry would be much, much greater if franchising was available to people, because it would then allow doctors or whomever — high-salary people who have full-time jobs — to be able to invest in this booming industry. Otherwise, they just couldn’t. It’s too hard to start a mom-and-pop and work a full-time job at the same time.
So franchising is really the only way they can do it safely. And also, your time to market, in general, with the franchise is much shorter because you just follow the steps. You put a manager in place and follow the steps. It’s faster and more efficient and you can do that while working remotely. Eufloria’s first franchisee funded the whole thing from Afghanistan. He’s a security contractor, and he got his whole build-out done and placed his manager from abroad.
MV: With Oklahoma granting more licenses per capita than any other state in the country, how have you handled the competition and the level of saturation?
ED: For us, it’s been fantastic. The fact that we’re able to be successful in Tulsa or in the state of Oklahoma really shines on the brand. We have 265 dispensaries licensed in Tulsa city alone. Not all are open yet, but it’s a real blessing that we’re making it work with the brand and what we’re doing with the look of the store, what we’re offering and the training we’re providing. And we have our act together when it comes to compliance, although it’s not very hard to comply just yet in Oklahoma.
MV: Did you have any background in retail or franchising before starting Eufloria?
ED: I’ve had a lot of business experience, but not franchising or retail and I didn’t have cannabis experience. But we’re making it work. I did a lot of government security, and I also ran oil-and-gas related companies prior to this, and I have some real estate experience, but cannabis is a new industry to me.
MV: Have you taken any measures to either prevent people from driving intoxicated or put any thought into concerns of overconsumption?
ED: As long as they’re within the legal limits of the law, I’m fine with whatever they’re doing. And they also have to have a medical card here, so it’s not recreational. If they’re medicating, I don’t know how much they’re supposed to medicate themselves to feel okay.
This coffee shop is in the middle of the arts district, so a lot of people walk here, ride scooters here, Uber here, get rides here. We have a parking lot, but this place could be totally packed and there’s still parking spaces in the parking lot and it’s not very big. Just where we’re located, I don’t think it’s an issue.
MV: Do patrons have to buy cannabis from your dispensary if they’re going to partake at the café?
ED: No, but we ask that they at least buy a cup of coffee if they’re going to go out on the consumption patio. We run heaters out there, the coffee shop does. Technically we’re two separate businesses. They wouldn’t have to buy something from Eufloria dispensary to go out on the coffee shop’s patio.
And they can bring cannabis from outside places. In Oklahoma, the law is that you can’t do it in the presence of a minor under 18, and you have to have a medical card. Whatever they do out in the cannabis consumption area, it’s treated the same way as tobacco.
We don’t let people under 18 out on the patio, but we do let people who don’t have a card on the patio. We ask that they show their medical card if they’re going to go out there and smoke cannabis. But if they don’t have one, they can certainly go out there with their friends. They just can’t smoke cannabis.
MV: Were there any challenges in working with the city government?
ED: Every dispensary in Tulsa has to get a variance, but we had to get a second variance because we were within 1,000 feet of another dispensary. The day we were supposed to get our primary variance, another dispensary got their certificate of occupancy 660 feet away from us.
We had been working closely with the city all along because we were doing something so out-of-the-box. We were the first cannabis café, and we wanted to make sure it was going to be okay before we dumped all the investment into it. They knew it was no fault of our own, so we had to go back the next month and apply for a variance for the distance between dispensaries. The city board voted unanimously to allow us to do this.
MV: What’s been the response from the Tulsa community?
ED: The reception online for the cannabis café has been remarkably positive. We haven’t had any negative people come through and say anything about the dispensary. We had one person who wrote that she’s allergic to cannabis smoke so she won’t be able to be a patron of the coffee place anymore.
And the coffee shop has also done better, revenue-wise, than before we were a cannabis cafe. We’ve had more musicians showing up recently, too, because this is a place you can literally bring your guitar, plug it in the wall and start playing any time or sit on the piano.
We’re really trying to help erase the stigma of the industry. We have open layout concepts, and we’re very technology-oriented and safety-oriented. We have uniforms with green ties that reflect the pharmacist of the late-1800s, where medication was compounded directly in front of the patients.
Our dispensary design is like a Euro-minimalist look; it looks really sleek and clean. We use organic materials, like brick and glass. We don’t have anything laminated or plastic.
Our clients have really liked the look of our stores.
This interview was edited for length and clarity.