Dispensaries compete as cannabis industry gets crowded

Along with jars of exclusively curated Vermont-grown strains and displays showcasing various paraphernalia, the shop is decked out in portraits of Craft gummies arranged in various scenes with model miniatures — another of Em’s hobbies.

The Balls sold their former home in order to renovate their retail space, purchasing a new house within walking distance of the shop with a manufacturing space where Em can produce her handmade cannabis gummies. She prides herself on crafting a higher quality product than what’s generally available, using real marijuana flower instead of trimmings and offering funky flavors like fruity pebbles, Dutch apple pancake, toasted marshmallow coconut, and lemon lavender, just to name a few.

The Balls dreamed of owning their own weed store since the first stores opened in Massachusetts, where they once lived. Along with selling their house, the couple still work their respective day jobs to finance this dream, which opened in Morrisville at the end of last year.

Craft opened just down the street from another boutique cannabis operation, Wild Legacy, operated by Kim Kaufman and Jimmy Goldsmith, Lamoille County restaurateurs who also run their 10 Railroad Street eatery out of the same building.

Craft is only about a mile away from Higher Elevation, one of the first cannabis operations, opened in Morrisville in 2021, and Lamoille County Cannabis, which was still in operation and making its own cannabis gummies at its Lindies Kitchen when Craft Cannabis opened, but recently saw its license suspended by the state.

The Balls were undaunted by the high density of pot shops in Morristown when it came time to open their doors, confident that they can offer a cannabis experience above their peers.

“We’re bringing in other things that parallel and complement cannabis. Music and art and things like that,” Courtney said. “We’re really confident that we can differentiate ourselves.”

Crowded market

In February, a group of cannabis growers went to the Statehouse with a message for lawmakers that the market was oversaturated and urged the Legislature to begin capping the number of licenses.

Lamoille County has seen its own share of new growers in the past year looking to get in on the green market boom, with 16 of the 24 total active cannabis cultivator licenses currently active in the county’s 10 towns having been issued in the last year.

Hyde Park has seven active licenses, while Morristown and Elmore have four apiece. Those numbers do not include the seven active manufacturer licenses in the county, with the majority in Morristown, or the sole wholesaler license in Hyde Park.

With hundreds of cultivator licenses in Vermont, though not all of them currently active, this leaves a crowded market with local growers battling for limited retail shelf space.

“My inbox is filled with people selling me cannabis,” said Dusty Kenney, purchasing partner at Cambridge Cannabis Company and vice chair of the Cannabis Retailers Association of Vermont.

In Cambridge, Kenney takes a relatively maximalist approach, with floating shelves offering a dizzying array of marijuana strains, but he can’t offer space to every grower looking for it, and with a still-thriving black market, Kenney said an approach similar to the culinary farm-to-table movement is what moves product in his store.

“For me, I need to know about the grower. I need to know the growing style. I need to know what area they’re in, what kind of lights they’re using, is that living soil — really in depth,” Kenney said.

Like any commodities market, Kenney said, as the cannabis market grows more competitive, he’s seen a glut of product driving prices down, with growers suddenly needing to liquidate their product and trying to cut deals.

Craft Cannabis exist on the opposite side of the spectrum, with the Balls carefully handpicking a select group of brands and purchasing small amounts to ensure they’re offering the freshest product imaginable.

“It’s three things: It’s quality, cost and the people who are growing or manufacturing it for us,” Courtney Ball said, with Em adding that they work strictly by supply and demand, continuing to buy from growers whose product moves and declining to return to those who don’t.

Customers want what they know, after all. This has been the experience of Bailey and Damien Evans at Higher Elevation, now the established veterans of the Morrisville cannabis scene.

“At this point, with most regular customers, there’s brand recognition,” Bailey said. “They’ll be like, ‘I know that this company does a really good job, and I like things from them. What do you have by them?’ We’ve started pairing everything in our case with the logo of the grower made very visible, because a lot of people come in looking for something specific.”

With such stiff competition for retail shelf space that can only be supplied by Vermont growers, Kenney predicted that there will be no need for the state to step in as market economics will take care of the issue on its own.

“I think we’ll see a drop off of about 20 to 25 percent of the growers not reopening their licenses,” he said.

Retail battles

Cambridge Cannabis benefits from occupying some prime commercial real estate, essentially the only game in town on Route 15 between Hyde Park and Essex and reasonably close to cannabis dry Stowe on Route 108 when Smugglers Notch opens in the summer.

Primarily serving a resort town, its fortunes also rise and fall with seasons and snowfall. Kenney remarked that a snowy March helped improve sales at the dispensary, even though, technically, tourists have almost no legal places to consume cannabis in the area.

New competition is coming to town by way of Johnson, where Clean Country Cannabis is currently in the pre-qualification stages of receiving a retail license, according to the Cannabis Control Board.

A previous occupant of that space, THC Sisters, never opened after being denied a license under a provision of state law that forbids operators from maintaining multiple licenses at once, according to the board.

The primary glut of retail operations can be found along the Route 100 corridor, orbiting Stowe’s tourism economy while serving the broader regional area just as the grocery stores and restaurants in Morrisville aren’t just serving Morrisville residents.

Morrisville is down to three dispensaries and Waterbury counts three as well — Zenbarn, 31 North and Goodfire — all competing for customers among those driving north after getting off I-89 at exit 10.

While the Morrisville retailers in general seem optimistic about how the particularities of their individual business models will fare and reported growing revenue — particularly in the wake of April 20, the Black Friday of weed — Kenney feels it may be overcrowded, and with stores opening in surrounding towns, competition will get even stiffer.

“I think it’s way oversaturated for the amount of people that are there, and that only the best will survive,” Kenney said. “We’ll start to see what the best business practices are, and what it comes down to — in any kind of service industry — is who’s giving the best customer service, and who’s got the best value.”