Many of us are already familiar with the fact that there are now almost as many cannabis dispensaries across US states as there are Starbucks outlets.
According to a report titled “Cannabis Retail: The $23 Billion Opportunity”, marijuana dispensaries are just as successful and profitable as Starbucks. When we dived into the finer financial details presented in the report, we were rather pleased to find that dispensaries can easily turn a 12% profit margin after tax deductions – in line with the top retail companies in the US, including Starbucks.
The report also highlighted the fact that by 2021, the US cannabis market will likely be worth approximately $23 billion, based on industry growth and current legalization trends. Roughly $15 billion of this will be attributed to the recreational consumption market, while the remaining $8 billion on average will be attributed to medical consumption.
Even though there has been a slight downward trend in cannabis since August 2019, it is highly likely that by 2021 we’re going to see the industry bounce back with a bang. Hopefully by then, the global lockdown would have eased and it wouldn’t be surprising at all to see cannabis stores coming up to the same level as big-box stores that swept the US in the 1990s such as Starbucks and many others.
Many dispensaries outnumber Starbucks chains across the US
Just two years back, Colorado was (for the third consecutive time) recorded to have more medical marijuana dispensaries than Starbucks outlets – in fact, there were more dispensaries than even McDonalds!
This is really interesting to know because back then, recreational and medical cannabis dispensaries were prohibited in 66% of all local jurisdictions across Colorado, according to this report.
In 2016, Denver was recorded to have twice as many cannabis dispensaries than Starbucks.
The 7th Marijuana Business Factbook edition released in 2019 stated that in Oregon, Portland, and Denver, for instance, marijuana dispensaries outnumber Starbucks by almost double, while in a new emerging market, Anchorage, Alaska, the two are almost tied in terms of density.
According to figures released by the Medical Marijuana Dispensary Program in mid-2015, there were 345 registered medical marijuana dispensaries, a number which significantly outnumbered the number of Starbucks outlets.
Dispensaries Vs. Starbucks – Will the coffee chain giant enter the cannabis market?
In 2018, Starbucks executives addressed a large group of cannabis lovers and clearly stated that it had no interest whatsoever in pursuing a share in the cannabis market. However, we’d beg to differ as it seems the company since then has been considering revisiting its hardline stance.
In direct response to the question as to whether the largest coffee chain in the US would ever consider including cannabis-infused brews in their lineup, Kevin Johnson, Starbucks’ CEO, responded by saying that a ‘product of that nature wasn’t something the company wanted to pursue or consider’.
Johnson further clarified that the idea of selling drinks at Starbucks which were ‘brewing’ with THC was not something that the brand represented. Yet, and rather ironically, he concluded by saying that the brand would still ‘monitor what happens in the industry’, as they always have.
Analysts at Cowan say in this report that there’s a good chance Starbucks will probably explore the CBD market and make good on hemp-derived cannabidiol products initially, as they are non-intoxicating. They are of the opinion that Starbucks will do this to avoid missing out on an industry that is quite likely to hit an estimated $16 billion by 2025.
Does this mean we could soon see marijuana dispensaries vs. Starbucks debates raging on between cannabis lovers, where they can’t make up their mind whether to restock their supply at the local dispensary or get a quick dose of their favourite strain at a Starbucks place?
The federal government, for one, appears uninterested. Even though Congress passed legislation in 2018, giving hemp-derived CBD products a new lifeline in the grand scheme of things as far as American commerce goes – the FDA arrived on the scene soon after and caused a little bit of confusion, saying that CBD food products are very much an outlawed substance. In fact, many local and state jurisdictions still prohibit the sale of any food items that have CBD in them.
Starbucks CBD-infused Latte, anyone?
The news that Starbucks will offer CBD-infused coffee actually came out as a result of the interview Andrew Charles gave, one of the analysts at Cowan.
Charles was, unfortunately, misquoted as saying that Starbucks is soon planning to make cannabis-infused drinks available on their menu. This was done in error on the media’s part. Still, Charles didn’t exactly say the opposite to reporters.
In the interview which was given sometime in 2019, he said that in the coming years, it is highly likely that the world will eventually succumb to relaxed policies, regulation and guidelines around how CBD is infused in foods and beverages. And this open attitude toward cannabis-based products is what will ultimately lead fast good giants like Starbucks to offer CBD-infused products and invest in multi-billion dollar industry. Which fast food chain wouldn’t, right?
Implications of Starbucks offering cannabis-infused beverages
Starbucks is a fast food giant with millions following the brand and enjoying its coffee around the world. Today, it’s nearly impossible to find any country without Starbucks outlets. To say its influence is widespread is a bit of an understatement.
The same can be said for marijuana dispensaries across the US. In a number of states, these dispensaries outnumber Starbucks outlets by 2:1, even 3:1 in some states. While dispensaries are an easy way to legally get what you need and be on your way, being able to buy a variety of cannabis-infused drinks at Starbucks would not only be extremely convenient, but more importantly have a profound impact on the way that cannabis use is perceived.
Keeping in mind the speculative nature of this article, if Starbucks does end up serving cannabis-infused beverages, it’s entirely up to consumers whether they want to go down their local Starbucks hotspot to enjoy a CBD-infused beverage or buy their herb at one of the many dispensaries.