When Oregon’s first legal recreational dispensaries started to come online in late 2015, Doc Collins, co-founder of weed-focused marketing firm Hood Collective, remembers clients showing up with duffel bags full of cash. “They didn’t know what to do with it all,” he tells Oregon Business. “Obviously, they couldn’t put it in the bank.” “The picks and shovels were definitely out,” Collins adds, using a metaphor that evokes the California gold rush but can also refer to a particular strategy for cashing in on a major economic boom. It’s thought that during that gold rush, those who did best weren’t miners but those in ancillary industries that supplied the tools of the trade, i.e., picks and shovels. There’s at least a kernel of historical truth to the claim. Levi Strauss made a fortune selling blue jeans to miners, and the company he built is still around today. The concept has become a shorthand for an investment strategy that focuses not on the hot new industry but the industries that serve it. In the mid-2010s in Oregon, plenty of entrepreneurs set about chasing the cash windfall promised by legalization — but a great many others, like the Hood Collective, decided to stick with picks and shovels. The cannabis industry distinguishes between businesses that require a state license —“plant-touching” companies like growers, manufacturers and sellers— and non-plant- touching companies, which don’t require a license. In Oregon the latter group forms a supportive ecosystem for the plant-touching companies. They make products like grow lights, fertilizer and smoking devices. They provide professional services like accounting, business consulting and legal advice (especially important in an industry as heavily regulated and taxed as cannabis). They run testing labs and ad firms, pot magazines and delivery services. Apps for finding weed. Apps for managing supply chains. Like all gold rushes, Oregon’s mid-2010s green rush was short-lived. So what does that mean for the vendors that popped up to serve it? Ancillary pot businesses depend entirely on the health of the plant-touching sector. And plant-touching businesses face extenIn the mid-2010s, thousands of Oregon entrepreneurs joined the ‘green rush’ made possible by legal recreational marijuana. Others decided to serve the industry with ancillary businesses that seemed safer. Where are they now that the boom’s gone bust? BY GARRETT ANDREWS PHOTOS BY JASON E. KAPLAN SKATING AT THE EDGE 24
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