Nature is amazing, isn’t it? As these four emerging concepts prove, you can grow it, smoke it, eat it, sleep on it, and even franchise it. This month, marketing guru Sean Kelly explores four new franchise concepts that are growing organically: the first franchised cannabis dispensary, a garden center for medical marijuana growers, an innovative organic garden franchise and the first-ever organic mattress store franchise.
It may be a small leaf, but the way business is booming, it holds a pretty large profit potential—illegal or not.
Denver’s pot dispensary franchise
So you think selling a franchise is tough in a recession? Imagine selling a first-of-its-kind, never-before-tried franchise concept in a recession. Now imagine selling a never-before-tried franchise in a recession using a sales pitch that begins with the disclaimer "Under Federal law, operating this franchise is a felony punishable by a minimum five-year prison sentence."
That’s the challenge facing Andy and Lori Cookston, franchisors of Cannabis Medical Technology. Founded in 2006, Cannabis Medical is Colorado’s first medical marijuana dispensary. In what may soon be the cannabis equivalent of "31 Flavors," it offers more than 27 all-natural, organic cannabis strains with such names as Master Skunk Kush, Jilly Bean, White Widow, Jack the Ripper, Purple Avalanche and Rocky Mountain High. Cannabis Medical Technology also sells a line of highly potent food products that includes brownies, cookies, candy and teas made with all-natural, organic cannabis.
Lori Cookston describes the company as a "medical marijuana wellness center" that also provides nutritional counseling, massage therapy, light therapy and medical marijuana education for patients and their families.
But you may ask: "Isn’t growing and selling marijuana illegal?" Well, yes and no. And, well, yes. Sixteen states and the District of Columbia have legalized medical marijuana use for those with a physician-approved treatment plan for conditions such as glaucoma or chronic pain. Medical marijuana users in these states must meet certain criteria and register for state medical marijuana cards.
That being said, marijuana is still classified, under federal law, as a Schedule I Controlled Substance (the same as heroin). Growing, selling or using it is a felony punishable by imprisonment—even if one has a doctor’s note. So, while the Obama administration has publicly stated it will not commit federal resources to prosecute individuals whose actions are in "clear and unambiguous compliance" with state marijuana laws, those who follow their dreams of being cannabis-dispensing franchisees do so at their own risk.
At least one group thinks the reward is worth the risk. The Cookstons are in the process of selling their flagship Denver dispensary to their first franchisee.
Total Investment: $199,000 to $440,000.
Franchise fee: $30,000. Royalty: 6 percent.
weGrow Founder Dhar Mann, left, has begun planting seeds, and has plans to spread his medical marijuana franchise across the U.S.
The Wal-Mart of weed
It’s been dubbed: the Wal-Mart of Weed; The Home Depot of Hemp; The Ganja Grocery Store. And any way you roll it, weGrow is the first franchised retail superstore that gives marijuana smokers everything they need grow their own prescription medical marijuana.
The weGrow store concept, founded in 2009 and franchised in 2010 by Dahr Mann, is indeed supersized—up to 21,000-square-feet per location. In addition to a huge selection of hydroponic growing equipment, weGrow provides a variety of educational services for budding marijuana cultivators, including live-grow demonstrations with real plants and lectures on safe and responsible practices.
WeGrow stores even have an on-site doctor to provide eligible patients the initial medical approval needed to apply for state medical marijuana authorization cards, and an on-site laboratory to test medical cannabis.
According to CEO Mann, weGrow opened its first franchise earlier this year in Phoenix, Arizona, and has a Tucson location under development. He expects to open locations in Washington, D.C., Detroit and Denver shortly thereafter.
A somewhat bizarre legal situation in Arizona provided fertile ground for the first weGrow franchise location. Last November, Arizona residents voted to decriminalize medical marijuana and thousands of medical marijuana cards were quickly issued.
Then Arizona governor Jan Brewer filed a lawsuit that effectively kept it illegal, under Arizona law, to grow, market or sell marijuana … even to patients with their own medical marijuana cards. That left an eager market of glaucoma (and other ailment) sufferers another option: grow their own. WeGrow came to their rescue, with franchisee Sunny Singh opening the first franchise June 1 in Phoenix.
Total Investment: $112,100 to $239,500.
Franchise fee: $25,000. Royalty: 5 percent.
Not your garden variety franchise
What do celebrities Tori Spelling (of TV’s "90210") and the Kardashian sisters have in common with students at New Heights Charter School in South L.A.? They eat fresh, healthy produce from their own organic gardens, thanks to Karen Cancilla and groOrganic.
Cancilla, a re-married mother of six children, recognized a growing number of people wanted the benefits of chemical- and pesticide-free organic vegetables and fruits fresh from their own gardens. But Cancilla also recognized the enthusiasm of these beginners was surpassed only by their inexperience and shortage of time. So, Cancilla founded groOrganic, a company that installs, maintains and even harvests customized organic vegetable gardens and vineyards in a minimum of space and with a minimum of fuss for its customers.
The groOrganic concept was an immediate hit—meeting the need for a convenient, effective way for individuals, businesses, schools and senior health-care facilities to reap the benefits of their own organic gardens. GroOrganic also is a publicity gold mine, earning high-profile exposure on such television shows as "The Biggest Loser," "Keeping Up With the Kardashians" and "Tori & Dean: Home Sweet Hollywood" and "Access Hollywood."
GroOrganic currently has seven active territories, five of which are franchised. Karen Cancilla plans to have 20 franchises up and running by 2012.
Total Investment: $34,600 to $51,800.
Franchise fee: $12,500. Royalty: 4.5 percent.
Green bedding revolution
Organic products are not just for growing, smoking and eating, anymore. They’re also for sleeping, an activity that consumes 30 percent of most Americans’ lives.
According to franchisor Dennis Hornick, a significant portion of the population is sensitive to the chemicals used in the manufacture of mattresses and bedding.
Hornick and his wife Leora stepped to the forefront of this "green-bedding revolution" seven years ago when they founded The East Coast Organic Mattress Store in Hellertown, Pennsylvania. Over the years, they painstakingly built a product line of organic mattresses, box springs and related products made from high-quality organic cottons, organic wools and natural latex sourced throughout the world.
The store has a large, spacious showroom featuring organic bedding choices, such as natural wool comforters. Before they could promote their franchise opportunity, the Hornicks had to jump through myriad regulatory hoops to meet the standards of the USDA National Organic Program. Does an organic mattress store sound like a crazy niche?
The Item 19 Financial Performance Representation in its FDD suggests otherwise: The Hornick’s original store generates nearly $1 million in annual sales.
Another benefit? It’s one of the few franchised retail businesses you can operate in your slippers and pajamas.
Total Investment: $171,000 to $270,800.
Franchise fee: $35,000. Royalty: 4.5 percent.
Sean Kelly is a franchise writer, marketer and publisher. Contact him at [email protected]
