October 21, 2018

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Head shops wary of cannabis competitors

As legalization nears, the evolution of the marijuana market remains a mystery

ERIK PINDERA / WINNIPEG FREE PRESS</p><p>A sampling of The Joint's pricy, artisan-made glass cannabis accessories. </p>

ERIK PINDERA / WINNIPEG FREE PRESS

A sampling of The Joint's pricy, artisan-made glass cannabis accessories.

Owners of Winnipeg head shops are nervous cannabis stores will encroach on their business once marijuana is legal Oct. 17.

In addition to pot, the stores will be able to sell pipes, bongs and vaporizers, which head shops have sold for years.

“(Cannabis has) been corporatized… Every big dollar imaginable will enter the game. Everyone and their cousin will want to enter the game. We don’t know what’s going to happen,” said Roman Panchyshyn, owner of Wild Planet music and head shop.

“The players will change — you can imagine a store like ‘Bongs R Us’ just around the corner.”

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Owners of Winnipeg head shops are nervous cannabis stores will encroach on their business once marijuana is legal Oct. 17.

In addition to pot, the stores will be able to sell pipes, bongs and vaporizers, which head shops have sold for years.

"(Cannabis has) been corporatized… Every big dollar imaginable will enter the game. Everyone and their cousin will want to enter the game. We don’t know what’s going to happen," said Roman Panchyshyn, owner of Wild Planet music and head shop.

"The players will change — you can imagine a store like ‘Bongs R Us’ just around the corner."

Though he has reservations about how legalization is rolling out, he thinks it a positive move.

"In one way, it’s like OK, great, my neighbours can buy a bong or a vape pen and not feel weirded out — like a devious criminal," Panchyshyn said. "In the transition years, that’s positive. But in the long run — I need a crystal ball for that."

'It's an exciting time — if anything, no one's going to the gulag for weed anymore'— Wild Planet owner Roman Panchyshyn

Ariel Glinter, the director of business development and regulatory compliance for The Joint Gallery, Tobbaconist and Vape Shop, said the business and its owners are excited about legalization.

"It’s something we’ve been hoping for for a long time," Glinter said, adding he thinks prohibition hasn’t worked well. "We see it as good for society and good for our business; it’s a win-win."

However, as the market opens up, new players will move in.

"It’s a two-way street — we anticipate the market will change," Glinter said, adding convenience stores and gas stations will start selling a wider variety of pipes, bongs and rolling papers. "We expect that the markup for those items might get spread around a bit."

Plus, The Joint is banking on recreational cannabis stores being focused on cannabis itself, rather than accessories.

"(Recreational cannabis shops) will have the basics, what they need to carry, but their business will be selling cannabis, whereas cannabis accessories will not be their priority."

He predicts legal stores will have inexpensive accessories at the point of sale, similar to how liquor marts sometimes sell glassware and corkscrews near the cash register.

Meanwhile, The Joint sells more expensive and specialized paraphernalia, from intricate, artisan-made bongs to equipment meant to make edible cannabis extracts. Glinter predicts that as the market develops, cannabis accessory stores will become even more specialized.

ERIK PINDERA / WINNIPEG FREE PRESS</p><p>Ariel Glinter of The Joint Gallery, Tobbaconist and Vape Shop, which has six stores in Winnipeg and one in Dauphin, said its owners are excited about legalization, but anticipate changes to the business.</p>

ERIK PINDERA / WINNIPEG FREE PRESS

Ariel Glinter of The Joint Gallery, Tobbaconist and Vape Shop, which has six stores in Winnipeg and one in Dauphin, said its owners are excited about legalization, but anticipate changes to the business.

The Joint is a relatively big player in the cannabis accessory market with more purchasing power than small shops; it has six stores in Winnipeg, one in Dauphin and two in both Saskatchewan and Alberta. Glinter thinks that will help the business adapt to changes in the market.

"I would be much more concerned if we had a one-off store," he said. "If we were one store with one store’s purchasing power, having to compete with all these different, new stores would be a different story. That’s one of the challenges, making sure we stay big enough that we don’t get swallowed up by the behemoth of a new industry that’s coming up — we’re running as fast as we can."

Getting swallowed up by big players is part of the concern for Panchyshyn, who has owned Wild Planet for nearly 40 years.

The focus of the business isn’t the bongs and pipes behind the posters, T-shirts and records — Panchyshyn calls Wild Planet a "rock shop" — however, because the profit margins are small on T-shirts and records, cannabis accessories are an important part of his business.

"If we lost the market share — the store’s too big. It would affect us. If we lose too much, we may not survive," he said. "You’ve got to sell product to survive."

But the well-known local store isn’t calling it quits just yet.

"I’m glad I’m not just starting — I’m firmly established, the store is iconic here in town. But already, when other stores opened we lost dollars," Panchyshyn said.

Although he has concerns about what legalization will mean for his business, Panchyshyn is glad cannabis will no longer be illegal.

"It’s an exciting time — if anything, no one’s going to the gulag for weed anymore," he said.

An aspect of The Joint’s business Glinter thinks will help it grow in a rapidly changing market is how it trains its employees — it teaches each of its 100 employees how all of the cannabis accessories work, and how to explain that in a way cannabis novices can understand.

Glinter pointed to medical cannabis users as an example.

"Let’s say they went to their doctor and got a prescription — they get the cannabis in the mail, it’s plant matter… they have no idea what to do with it. A lot of the time, they’ll come down to a store like ours and ask," Glinter said. "Our employees can show them the wide array of options, figure out how they want to consume it and dial it into the specific item they’re looking for, and then show them how to use the product."

The Joint also anticipates more people will start using cannabis overall.

"We will have a lot of new cannabis users — mainstream users who’ve never used it before, or haven’t used it in decades — and people who do use it currently who aren’t comfortable shopping at our stores because of stigma."

Predicting how the cannabis accessory business will evolve is still partially guesswork.

"That’s the million-dollar question: how is the business evolving? We’ve seen more change in the past 12 months then we’ve seen in the past 10 years combined, and we anticipate next year there will be even more change," Glinter said, referring mostly to regulatory changes.

epindera@gmail.com

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