Canada’s Golden Leaf seeks to carpet U.S. with pot retail stores

Golden Leaf Holdings is taking the first step to becoming the Starbucks or McDonald’s of weed, even though marijuana remains illegal across much of the U.S.

The Toronto-based cannabis company has opened a chain of marijuana stores in Oregon called Chalice Farms. And now venture firm BlackShire Capital has signed a letter of intent to franchise the model, setting the stage for stores across North America.

Startups in the fledgling — but fast-growing — industry are vying to create the first household name associated with marijuana.

“Like Starbucks is to coffee, we believe Chalice will be to cannabis,” said William Simpson, Golden Leaf’s chief executive officer.

While analysts agree the industry is full of untapped potential, the patchwork of state laws has prevented companies from expanding aggressively: Nine states and Washington, D.C., allow recreational use, and 20 states allow medical use.

The Chalice Farms dispensaries in Oregon were designed to create a warm, welcoming environment that would introduce new consumers to cannabis and dispel preconceived notions, Simpson said.

The public’s response has been favourable, Simpson said, with the most successful store averaging $400,000 a month in gross sales through the third quarter of 2017. The slowest location averaged about $100,000.

The franchise model, meanwhile, follows the same playbook as restaurant chains and coffee shops. But with marijuana prohibited from crossing state lines, every Chalice Farms won’t be able to offer the exact same products.

Golden Leaf will attempt to work around this issue by manufacturing its own products locally, or developing a list of approved manufacturers and products in each state or region as necessary, Simpson said.