0820_AUG Comstock's Magazine 0820 August | Page 50

CANNABIS
or hear is folks who have seen kind of a
real steep dropoff,” he says. “Nothing
like that — if anything, maybe a little bit
of an uptick, maybe some business as
usual. But somewhere in that range.”
Luchini points to new buyers as a
main driver in Kolas’ sales increase.
Some customers told Kolas staff they
were looking for a way to cope with
stress or boredom. For others, being
out of work meant no drug testing, so
they didn’t worry about consuming
cannabis. Existing users were looking
for a product to deal with insomnia.
Edibles were a big seller, often because
customers’ kids were home, so
buyers couldn’t smoke in the house,
Luchini says. It also helped that stimulus
checks started coming in at the
beginning of April, giving people extra
money to spend.
Sacramento dispensaries have a
built-in advantage in this downturn,
says longtime industry consultant
Jacqueline McGowan. City dispensaries
have more limited competition for area
buyers because only two Sacramento
County municipalities — Sacramento
and tiny Isleton — allow commercial
cannabis sales, and sales are forbidden
in the unincorporated county. That situation
is true in only a few places in the
state, such as Santa Clara County, where
only the city of San Jose allows dispensaries,
she says. She sees California as
having “pockets of profitable businesses,”
with Sacramento being one.
Sacramento’s lack of cannabis
tourism also serves as an odd ballast for
its weed businesses. In Colorado and
Nevada, sales are expected to plunge
because of the drop in tourists who
go there to try legal pot. “A lot of the
(cannabis investors) who went into (Las
Vegas) went to it specifically because
the attraction was, ‘Oh, my God, look
how many visitors show up every year,
so let’s go big, and let’s build these
gigantic retail stores,’” says Khurshid
Khoja, founder of Sacramento-based
Greenbridge Corporate Counsel, which
advises clients in the cannabis industry.
“I think (Sacramento cannabis businesses)
are faring better because our
demand is organic.”
Recession-proof or ripe
for collapse?
If the Sacramento marijuana industry
has a better chance of riding out
the recession, the same may not be
true elsewhere in the state. Cargile
wonders whether as time goes by
and the recession bites deeper, more
customers will seek underground
sellers to save money. They charge far
less since they don’t pay taxes or fees
and don’t have the cost of mandatory
quality-control testing. Already in
March, BDSA data were showing that
lower-priced products under $20 were
fueling the sales growth.
There are other warning signs too.
Pamela Lopez, managing partner at K
Street Consulting, points to major lay-
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50 comstocksmag.com | August 2020