The Green Solution Gains Leading Role In Colorado’s Cannabis Retail MarketFebruary 26, 2019
After five years of legalized recreational marijuana use in Colorado, dispensary operators have come and gone, but The Green Solution (TGS) has emerged as a leader by using traditional business strategies—including strong branding, customer loyalty programs, and effective product management.
TGS dispensaries have elements similar to those in Apple Stores—sleek, open layouts, attention to product display (iPads are used to promote the products), and knowledgeable staff. When TGS first launched in 2010, it had two locations in the Denver market. Today it has 17 locations throughout Colorado and two in Illinois. There are plans for further expansion this year.
TGS is owned by four brothers. Kyle and Eric Speidell are the co-founders and co-CEOs, Nick Speidell is the chief information officer, and Brad Speidell is chief dispensing officer in charge of retail operations. Prior to founding TGS, Kyle and Eric owned a real estate company. After the financial crash of 2008, they were seeking other opportunities. At that time, medical marijuana was legal in Colorado. The brothers purchased their first dispensary in 2010, and when voters legalized recreational marijuana sales in November 2012, they prepared for legalization’s starting date of January 1, 2014.
The store opened to an eager customer base. “We had a line at the door every day for the first 30 days, and it never stopped until the end of the day,” says Brad Speidell. “The first year was difficult—the company quadrupled overnight and our staffing had to get more robust quickly.”
After that first year, TGS decided to invest in full vertical integration. “We grow the product, we manufacture it, we distribute it, and we retail it,” says Speidell. “We’re one of the few vertically integrated companies in the state from seed to sale.” In terms of cultivation, TGS has 300,000 square feet of indoor operations and approximately one million square feet in outdoor operations.
TGS venues average 4,000-4,500 square feet and fall into one of three categories: express, standard, and superstore. The express model uses smaller locations that are primarily designed as pick-up stores for online orders, while the other two categories are based on size and product assortment. Medical represents approximately 10% of business, while recreational is 90%.
“You’d be surprised at who our customers are. They span all ages and demographics,” says Speidell. “Our strongest following is males age 21-34. Middle-aged women are our fastest-growing demographic based on buying patterns.” He also noted that seniors are another key segment, recalling a recent dispensary visit where he noticed that all eight checkouts had a customer over 60.
Approximately 70% of customers are enrolled in the TGS loyalty program, which allows the company to collect detailed data on buying habits. Examples of program benefits include “birthday points,” $5 back for every $100 spent, and text messages promoting weekly deals.
By product breakdown, cannabis flower accounts for 55% of sales, concentrates (which includes vape pens) 25%, edibles around 10%, topicals 5%, and accessories the remaining 5%. TGS carries a mix of established, premium marijuana brands along with an assortment of their own branded products. Customers are gravitating toward products like Willie’s Reserve, a marijuana business started by Willie Nelson.
In the flower category, TGS’s own products have two tiers: potent (strains with less than 23% THC) and highly potent (strains above 23% THC). The company has also taken an idea from the liquor industry by producing special, small batches of a certain strain of flower and selling it for a limited time. TGS also has a marijuana-infused product company called NectarBee. NectarBee produces an assortment of products that include raspberry cheesecake truffles, strawberry shortcake bars, passion fruit gummies, and grape icicles.
TGS doesn’t provide revenue figures, but Speidell says the company pays about $18 million each year in sales tax (city and state combined). Based on that, Impact Databank estimates TGS’s revenues at approximately $100 million. Looking ahead, the company will continue to reinvest earnings in the business and focus on acquisitions and its marketing development and retention plan. There’s also a possibility of taking outside investor money as industry regulations change.—Ryan PeacockSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.