6 ways Philadelphia's Medical Marijuana industry has changed since city's first dispensary opened
Flash forward five years and the city is now home to 16 medical marijuana dispensaries, with 59 across Southeastern Pennsylvania. Following several years of industry consolidation, Restore is the only independently owned dispensary operator left in the state.
The 240-employee company operates six Pennsylvania dispensaries in Doylestown, Elkins Park, Yeadon, Pottstown, Lancaster and Philadelphia. Workers at its Elkins Park site voted to unionize earlier this month. The company also opened its first South Jersey medical marijuana dispensary in Glassboro in April.
Rob Stanley, Restore's chief operating officer since its inception, sat down with the Business Journal inside the Fishtown dispensary to talk about the business. Here are six ways he says the local medical marijuana industry has changed over the past five years:
1. The dispensary market is now dominated by national players.
"When we originally started in 2018, the program was supposed to be set up so the businesses that obtained their licenses would keep them," Stanley said. "Then we saw the emergence of all the MSOs (multi-state operators) that have come into Pennsylvania and have gobbled up the other dispensary groups. We're the last remaining private group in Pennsylvania."
Restore now competes with national competitors such as Cresco Yeltrah of Chicago, Curaleaf of Massachusetts, Florida-based Trulieve, and TerrAscend, which has offices in Toronto and New York.
"We have great relationships with the independent growers that we've forged over the past five years, so we're able to still get product," Stanley said, "but we noticed that there is becoming a little bit more of a squeeze from some of the larger MSOs. We have a varied menu, as opposed to when you go to some of the MSO dispensaries. A lot of times they feature just their own products."
Stanley said Pennsylvania's medical marijuana program was set up to create a "level playing field" for all of its participants, but now Restore finds itself competing against much larger dispensary operators. "Thankfully we have a great patient base," he said. "I don't know other dispensaries numbers, but we believe we are one of the more successful dispensary groups in the state."
Restore does not disclose the volume of medical marijuana it dispenses. Stanley said the company's dispensaries typically serve 150 to 300 customers a day but have seen as many as 500 in a single day.
2. More medical conditions becoming eligible for medical marijuana treatment has meant more diversity among its customers.
"They added a few more of the conditions to the program since the beginning of it," Stanley said. "Anxiety was one of them. We're seeing a somewhat different patient base coming in to all of our dispensaries. We still see a lot of folks that come in for relief from cancer treatments and epilepsy and other conditions."
Other conditions on the state's approved list include autism, glaucoma, multiple sclerosis, opioid use disorder, post traumatic stress disorder and severe chronic pain.
3. The variety and type of products has exploded.
"When we started five years ago we had cartridges, we had some capsules, we had tinctures (concentrated liquid herbal extracts) and concentrates," Stanley said. "Then the state rolled out [vaporizable] flower into the program. There were only a few grower-processors, so there was a limited supply — maybe 15 different products from each grower. Now there's all these different growers out with different products. There's a lot of different strains available, different potencies. People can kind of hone in on what works for them."
Fishtown Restore had about 100 different product options across the different forms when it opened five years. Their dispensaries now have more than 600 options, Stanley said.
4. Recreational marijuana is becoming more commonplace, but not yet in Pennsylvania.
To date, 23 states have approved recreational marijuana including the neighboring states of New Jersey and Delaware. The first legal sales of recreational marijuana began in New Jersey in April 2022. Delaware approved recreational marijuana two months ago, and sales are expected to begin in late 2024 or early 2025.
Pennsylvania, at least for now, is not on that list.
Stanley believes Restore is well-positioned to handle any onslaught if recreational marijuana use is approved in Pennsylvania.
"We have a great patient following. We started the discounts from day one in Pennsylvania for people on SSI (supplemental security income), for veterans, senior discounts — and then a lot of folks started to mirror that. I think a lot of people come back to us for that plus the selection that we have because, like I said, we have a very varied selection."
5. Product education has improved greatly.
"When we first opened up, we were doing a lot of our own education," Stanley said. "The people we brought on are very knowledgeable in the medical marijuana field. So we were able to start our own education program."
What has changed, he said, is the expansion in the number of grower-processors that have developed their own educational training for dispensaries.
"We have set up a lot of training sessions with them for our staffs," Stanley said. "There are more resources. We can educate our staff better, so they can help educate the patients better and work in coordination with our pharmacist on staff to help patients find the medicine that's best for them. Before it was everybody was stretched thin trying to open and get product in the stores."
6. The Covid-19 epidemic has had a lasting impact on the business.
"When we would have a first-time patient, we'd always recommend having a consultation with our pharmacist," Stanley sad. "One of the things that kind of changed with Covid is that you don't have as many walk-in patients as before. A lot of people are placing online reservations for when they come in to get the product. We still recommend that everyone who comes in talks to the pharmacist and then the dispensary agents. We talk to the patients and ask what effect they're looking for, what form of consumption that they're looking for, and their price range. We work with them. This is a medical program. We're not in the business of trying to upsell anybody."
Before the pandemic, he said, the state did not allow online ordering.
"When Covid hit, it was insane," Stanley said. "We went from having the one-on-one, face-to-face interactions in the dispensary to then, overnight, we started doing pretty much all call-ahead orders. We were able to get integration with an online ordering system that we set up pretty much within a couple of days. We had customers lined up outside and we were doing all of our sales through the security vestibule. We had all the orders set up in the lobby. It was a lot for not just the patients, but for our staff because there were so many unknowns.
"It was a learning experience, to say the least, for everyone," he said. "We didn't close for one day because of Covid, and online ordering is here to stay."
Restore's Yeadon and Pottstown dispensaries have drive-thru windows.
Stanley said they still get some customers who don't use the online ordering system. Those include customers who may drive by a dispensary and decide at that moment to make a purchase and customers who aren't computer-savvy.
The company at one point was getting a call every other week from a larger firm interested in buying Restore, Stanley said. While those calls have slowed, they still get offers.
"I think a lot of folks know [selling the business] is not what we're looking to do," he said. "Our ownership group told me when I was hired that this is a marathon, not a sprint."
Restore's ownership group is led by Vipul Patel and Dimle Thakrar. Steven O, the owner of the Reboot Integrative Wellness Center who was part of the original ownership group, stepped aside when the state health department vetoed the company's plan to incorporate one of his wellness centers inside the Fishtown dispensary.
"We want to stay in Pennsylvania and open more dispensaries in Pennsylvania," Stanley said. "We also want to eventually get our own grow. We've been working toward that, but we want to do it the right way. In the five years that we've been open, even with six locations, we haven't had one infraction with the Pennsylvania Department of Health. It's the right way to be in this business, and we want to continue to do it that way. We feel that if we stick to what we've done we will be able to attain our goals."