A recent business-condition survey found that nationwide, 27% of cannabis business owners are profitable. The implication is bleak. “That means 73% are either breaking even or not,” Whitney says. “The industry is in crisis nationally, and it’s even worse in Oregon because Oregon has a much more mature market. It’s a real tough environment to conduct business, and it’s having this ripple effect not only within the cannabis industry but outside it as well with the ancillary operators.” Blommer and his fellow managing partners at Green Light Law Group deny the claims against them and have filed counterclaims in their ongoing lawsuit with their landlord. The partners are represented by Matt Goldberg, whose own cannabis-focused firm, Lotus Law Group, recently dissolved, he says, due to the breakdown of his personal relationship with co-founder Allison Bizzano. Goldberg headed across town to Harris Sliwoski, which he says is well positioned to be a leader in cannabis law. He insists an Oregon firm can survive on pot law alone. “It is a viable business,” Goldberg says. “At a certain point, cannabis law is just business law.” GREEN WAVE When the market slumps, some non-plant- touching companies expand to other sectors. Others explore opportunities in the next gold-rush state, where a familiar cycle plays out. A law is passed, followed by a two- to three-year period where first licensees make a lot of money — the so-called first-mover advantage. Then more businesses sprout as the initial enthusiasm starts to die down, causing the market to shrink. Businesses pop up along the border and take market share. A first mover itself, Oregon initially got a lot of business from non-state residents, but that dried up as other states decriminalized. The latest Last Frontier is Ohio, the most recent state to legalize marijuana for recreational use. Attorneys in the cannabis space are reportedly looking into taking the Ohio bar exam. Florida—which has a recreational- use proposition on the ballot this fall and which has allowed medicinal use since 2016 —is another trendy pick to become the next Colorado or Oregon. Another factor is the possibility of federal legalization, which would certainly alter the decade-long pattern of state-by-state boom-and-bust cycles. Legalization is popular globally, not just in the Pacific Northwest. The Biden administration recently announced a federal rescheduling of marijuana, which is expected to decrease the tax burden facing pot businesses. CIAO and others are attempting to make permanent the moratorium on new cannabis business licenses. And further reforms might not be far off. Collins, of the Hood Collective, thinks starting at a low point in the market was a blessing in disguise; it meant his company had to grow slowly and adapt to economic realities. For years he and his business partner performed straightforward work for clients and charged competitive rates. Meanwhile, their main competitor and its five founders oversaw a large portfolio of ambitious projects. Collins didn’t see how their model could work. Soon enough, it didn’t. These days, around 80% of the Hood Collective’s business comes from out of state—much of that from national brands— because there’s not nearly enough business in Oregon to get by. The largest marijuana companies (often celebrity-owned) tend to use the country’s largest ad agencies, Collins says. Small local cannabis companies still solicit him on projects. Often, he advises against using his services. “A lot of companies are already behind the eight ball when they get here,” he says. “I tell more people than you know, ‘You’d be wasting your money.’” The gold-rush framing doesn’t perfectly explain Oregon’s weed industry, according to graphic designer Anton Kimball, who’s designed logos and packaging for major brands like Guinness, Nabisco, Clorox and Nintendo, as well as around 30 cannabis companies. These days, pot is much less a part of his business. “It really has slowed down in Oregon. And with all the consolidation, it’s hard to keep up.” Kimball thinks because the pot industry is so young, business owners are slow to apply marketing models that have proven successful in other industries like food and beverage. “One thing to keep in mind is that most people who get into the pot industry love pot. They’re doing something they really care about. They never thought of this as a fad.” Hunzicker, aka Dope CFO, thinks more people are in the marijuana industry than most people realize. “You come to my hometown of Bend and ask, ‘Who’s ancillary?’ Well, there are law firms that serve the cannabis industry, marketing companies, testing labs—they’re ancillary. But I’d go further and say Home Depot, Lowe’s, McDonald’s, Subway—they all sell to cannabis firms all day long. That makes them ancillary. We’re all serving cannabis out here.” “One thing to keep in mind is that most people who get into the pot industry love pot. They’re doing something they really care about. They never thought of this as a fad.” ANTON KIMBALL, GRAPHIC DESIGNER Anton Kimball has designed logos and packaging for dozens of cannabis companies. 27
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