Slide down to any liquor store on a questionable side of town, and it is not hard to find some beaten down casualties of life hanging around nearby, asking anyone and everyone for some spare change so they can get a bottle. If you’ve ever been accosted by one of these desperate booze-seeking social outcasts, you may have found yourself thinking at one time or another, “How in the heck will 50 cents help this person buy liquor. They’ll be out there all night before they gather enough cash to get drunk.” Well, while that might be true for beggars with a palate for the good stuff, this is not the case for those with an affinity for libations straight off the bottom shelf. Like, way at the bottom.
For years, broke boozehounds across the United States have been getting the job done with cheap liquor. All they have to do is come up with a few bucks, and they can afford a wild and wicked buzz that most of us will (and should) go our entire lives without experiencing. Let’s just say you’re not missing an opportunity for enlightenment or anything by pounding down a $5 bottle of Mad Dog 20/20.
But the cheap stuff is something that is missing from legal weed.
The cannabis industry has done everything in its power to avoid catering to the average, working-class stoner. It launches expensive brands almost every week, designed exclusively for the hoity toity. Because, well, people with beaucoup bucks are the only ones out there buying marijuana amidst the newly legal climate, right? Come on, that seems a little far-fetched.
As I pointed out in a previous column for Forbes, the “high timers are all high rollers” mentality is not very realistic. Or at least it’s not as prevalent as the weed industry wants the world to believe.
It’s really just the reverberation of a sales pitch concocted years ago by cannabis advocates as a way to show politicians and voters that the potheads of the flower power generation finally grew up and got a job. And not just slinging burgers down at McDonald’s either. We’re talking real careers where they are earning around $75,000-$100,000 per year.
A recent market analysis from the Brightfield Group shows that almost half of the 35 million cannabis users in the United States are making less than $30,000 a year. That’s a little more than what the average McDonald’s employee takes home, but not by much. The report goes on to say, “emerging leaders in the branded cannabis space are largely seeking to differentiate themselves on their premium inputs and (e.g. Kiva, Bhang, Caviar Gold)” but “few are seizing the opportunity to capture low-income customers in the Economy brand space.” Translation: A cannabis company would be smart to drop the high-class illusion and start stocking the shelves with weed people can afford.
Well, it seems that one cannabis producer listened.
Hexo Corporation announced last week that it has created a new budget strain specifically for destitute stoners. This weed is so cheap, in fact, that they couldn’t even give it a cool name. This one is simply called “Original Stash.” Fancy, right? I might have gone with Mad Dog 420, but hey, that’s just me. The brand, which is a Sativa dominant hybrid, sells for right around $4.49 per gram. The only snag is that customers must buy it an ounce at a time. That is going to set them back to the tune of around $125.70 before tax.
Still, considering that an ounce of popular strains like Blue Dream costs approximately $265 an ounce, it’s not a bad deal. Sure, the weed is not overly strong, but at 12-18% THC, it will definitely get the job done.
Original Stash is Hexo’s answer to the black market. We’ve learned throughout the years, as legalization has taken hold in more parts of the world, that taxed and regulated markets are not necessarily crippling the underground. In states like California, which was the great green hope for creating a template for legalizing marijuana at the federal level, illegal cannabis operations continue to dominate – and big time. Some say that this is because most pot consumers are searching for any possible way to buy the herb cheaper than what they can get it in a dispensary. So they are calling up their street dealers and getting it from them because they don’t have to pay tax.
This black market domination is also happening in Canada, which legalized the leaf nationwide last year for recreational use. According to the latest report from Statistics Canada, somewhere around 80 percent of the cannabis purchased in the northern nation is still being done through the underground.
Hexo believes that offering a cannabis strain for less than $5 a gram will make them competitive with outlaw sources and drive people to the dispensary instead of to the doors of drug dealers.
Industry experts like where Hexo is going with this concept.
“If it can gain a meaningful share of the low-cost market and even take some market share from illicit providers, it has the basis of a very nice business,” wrote Greg Miller, Executive Director at the National Institute of Cannabis Investors. “After all, McDonald’s makes more money than probably every high-end steakhouse in the world combined, and it does that through low prices.”
The overall message is clear. It’s time for the cannabis industry to start slumming it a bit to stay competitive with the black market. Let’s take a lesson from the alcohol industry. While there is undoubtedly a booming market for expensive craft beer, the top-selling brew in the United States is still Bud Light. This is something pot producers will need to keep in mind when the time comes for the U.S. government to finally bring down prohibition. Otherwise, they might go broke. And then who’s going to need the cheap weed?