Kennewick marijuana retailer wants to professionalize the CBD industry
Steve Lee is probably the only small business owner in the Tri-Cities who isn’t complaining about government regulation.
Well, he’s not complaining about the rules governing his newest venture, Green2Go Wellness, the CBD retail and delivery business he opened in the former Franz Bakery Outlet, 419 W. Columbia Drive, in December.
That’s because Lee and his wife, Jessie, also operate Green2Go Recreational, a legal cannabis retailer with stores in Finley and Tokio. The cannabis business operates under Washington’s exacting rules for marijuana sales.
Green2Go Wellness sells products derived from cannabidiol. CBD is derived from hemp, a member of the cannabis family that is low in THC, the primary psychoactive element of marijuana. It isn’t regulated under Initiative 502, the voter-approved initiative that legalized recreational marijuana in 2012
And since marijuana remains illegal under federal law, owners of “I-502” shops like the Lees face a host of regulatory burdens that non-502 businesses do not.
Their product is tracked from seed to store. Business expenses aren’t deductible on federal tax returns. Advertising is a challenge, as is banking. Most nonprofits shy away from marijuana-related donations.
Green2Go Wellness doesn’t fall under I-502, so it enjoys the same benefits as any other business. Rent and other expenses are tax deductible. Nonprofits welcome its donations.
It can buy ads and sponsor a Little League team. The store hasn’t yet sponsored a team, but only because no one has asked.
Lee relishes the difference.
“Owning a business outside of cannabis is mind-blowing,” he said. “This is the first time we’ve had a regular business where we can just be a regular business.”
The love child of glass and pot
Lee called Green2Go Wellness the love child of the cannabis retail shops and his related venture, Prohibition Glass, which sells cannabis-related art glass in downtown.
The former began as a medical marijuana business and evolved into Green2Go Recreational when voters legalized pot.
The latter is the glass shop the Lees opened next to their Finley store to sell bongs and related paraphernalia.
Lee and his wife, Jessie, are longtime collectors of marijuana-related glass. Lee said buying glass is how he’s celebrated milestones. The business sells art glass, as well as glass produced by local glass blowers.
Prohibition Glass takes its name from marijuana’s legal history. Collectors were reluctant to buy marijuana-related glass because it was treated as illegal drug paraphernalia. Lee anticipates a day when marijuana is legal at the federal level and glass produced before then is classified as “prohibition era” glass.
The glass business eventually moved into a food truck the Lees inherited from Gourmet Grub Bus, a business they’d invested in that shut down.
The Gourmet Grub Bus truck was rebranded with a Prohibition Glass wrap and parked outside Green2Go. The couple added CBD products to the lineup.
Washington law generally prohibits CBD products in actual cannabis stores, but Lee viewed the parking lot as fair game. CBD sales took off and accounted for 80 percent of the truck’s revenue.
That prompted Lee to consider the potential of a retail business focused on CBD, customer service and education.
There’s demand for CBD products in the Tri-Cities, but supply can be spotty.
There are one-brand shops and the occasional shelf at a bodega or grocery, but few if any places that offer customers either choices or education, Lee said.
When Franz Bakery vacated its 9,000-square-foot facility on Columbia Drive in downtown Kennewick, Lee jumped at the opportunity.
The space includes a small retail store, a massive warehouse and room for other businesses.
Green2Go Wellness sells five lines of CBD products and has room for a classroom to legally demonstrate uses for both CBD products and marijuana, with legal hemp flowers standing in for marijuana.
Prohibition Glass moved into a neighboring space and is being outfitted as an arts-oriented speak-easy. Lee hopes to host events in the space, which he said honors the area’s new designation as an arts district.
Lee, who is Kennewick’s mayor pro tem, notes the council just established the arts district in the downtown area.
His goal with Green2Go Wellness is similar to his goal in Finley: Establish a clean, well-lit business that appeals to ordinary people.
“Your grandmother’s CBD shop” is the tagline.
If you drew a Venn diagram of bake shop customers and CBD customers, the circles would overlap, Lee joked.
“They’re identical,” he said.
While CBD products are largely unregulated, it is against federal law to tout medical benefits, a rule that’s widely ignored.
“Imagine being a car dealer and you can’t talk about how the car works,” he said.
Green2Go Wellness found a workaround in Washington laws governing marijuana sales.
The state allows marijuana retail employees to become licensed medical consultants if they pass a test.
Once licensed, they’re free to discuss the products and how they work.
The four-plus employees at Green2Go Wellness are state-licensed consultants.
Lee believes it’s the first time the license program created under the I-502 rules has been used to support a CBD business.
The Washington CannaBusiness Association, which advocates for the legal marijuana industry, said it is pushing legislation to allow CBD products in regulated marijuana stores in the 2020 session.
Lee borrowed another concept from the regulated marijuana side.
Businesses that fall under I-502 track cannabis from seed to sale.
CBD isn’t subject to that level of scrutiny, but Lee is applying the same wholistic view to the products he sells at Green2Go Wellness.
It sources products from five vetted providers that submit samples for independent testing for heavy metals and other contaminants. Eventually, he’d like to offer about 250 individual products.
He said he would discard brands if he believed they’re contaminated for some reason.
“We are fanatical about how our product is made and that it’s safe for the public,” he said.
The one challenge is money, literally.
Credit card processors consider CBD too close to marijuana to handle. Green2Go Wellness, like its marijuana counterpart, is an all cash business. The Lees created an ATM business so customers can get the cash they need to make purchases.
The modest store on Columbia Drive is the first of what Lee hopes will become a regionwide network of Green2Go Wellness branded CBD kiosks in compatible businesses, such as licensed massage partners. The Lees hold federal trademarks for both “Green2Go” and “Prohibition Glass.”
Green2Go Wellness also offers home delivery – harkening back to the early days of Green2Go, when Lee sold medical marijuana and delivered products to patients.
Lee said he’s excited to return to his roots, focusing on distribution and logistics.
The former Franz bakery warehouse will serve as a distribution hub. Zoning could allow for light hemp processing as well, he said.
Follow Green2Go Wellness on Facebook @g2gwellness.