Affinity's Rino Ferrarese at WNHH FM; some of his company's strains (top).
Rino Ferrarese noticed that the people who help him grow cannabis to sell in Connecticut end up buying their own stash elsewhere.
Therein lies a challenge for Connecticut’s fledgling industry.
Ferrarese — the 54-year-old president of the Affinity Grow indoor cannabis production facility in Portland and co-owner of New Haven’s Affinity Health & Wellness dispensary at 1351 Whalley Ave. — discussed that challenge Tuesday on WNHH FM’s “Dateline New Haven.” The discussion occurred as Connecticut marked the second anniversary of legalizing the recreational use of cannabis.
“We have 40 employees. I don’t think any shop in Connecticut,” Ferrarese said. “They all go to Massachusetts, or they go to what the kids call their ‘plugs,’” i.e. black-market dealers.
State-licensed businesses like Ferrarese’s are still making money: to the tune of an estimated $300 million a year so far. But original estimates envisioned the market as much as three times that size by now.
The reasons are multiple, including the fact that so many people buy their weed barely under the table at the estimated seven quadrillion smoke shops operating in New Haven and statewide. Another reason: people buy cheaper cannabis over state borders
Ferrarese offered some suggestions for how to help legal operators grab more of the business:
• Taxing legal weed as a percentage of the sale price rather than weight. As prices have fallen, so have taxes customers pay in Massachusetts, which levies a 20 percent sales tax, while Connecticut customers still pay per milligram of THC, which remain constant as prices change. An eighth of an ounce of weed ends up costing over $40 in Connecticut but more like $36 in Massachusetts, he said. He suggested a one-year 10 percent sales tax in Connecticut to entice people to buy in state, advancing to 20 percent the second year.
• Allowing customers to browse, as in a package store. Cannabis dispensary customers here have to make an appointment and order in advance. Then they walk in, pick up the package, and leave. In New York, by contrast, “you can walk around,” check out promotions and different products, ask questions about different products.
• Requiring smoke shops to post signs that inform customers that no cannabis sales are permitted on premises. Ferrarese said he believes that that would cut down on the number of people buying unregulated weed in those stories.
Despite the challenges, Ferrarese said both his businesses are meeting their bills two years in to legalization: They’re making payroll as well as steep debt payments. They’re not yet returning profits to shareholders or “social equity” funds, but he said he’s confident they’re on the path as the industry matures.
Click on the video below to watch the interview with the canna-preneur Rino Ferrarese on WNHH FM’s “Dateline New Haven,” including discussion of indoor versus outdoor growing and the merits of indica versus sativa strains. Click here to subscribe or here to listen to other episodes of “Dateline New Haven.”