Source: Green Thumb Industries
Is Circle K about to change the legal weed game in a big way?
Circle K has reached agreement to lease space within its convenience stores in Florida for the purpose of dispensing medical marijuana to patients in the state.
The lease deal is with Green Thumb Industries, a cannabis consumer packaged goods company and owner of 68 RISE Dispensaries operating in 12 states. The Circle K lease will enable Green Thumb to open 10 “test and learn” RISE Express dispensaries next year at stores with gas pumps.
Circle K operates about 600 stores in Florida, providing opportunities for Green Thumb to scale the Express concept. The addition of the Express locations will build on Green Thumb’s existing presence in Florida where it operates seven medical cannabis dispensaries.
“The opening of RISE Express stores at Circle K locations is a game-changer. Convenience is a strong channel in retail, and people want more access to cannabis,” Ben Kovler, founder, chairman and CEO of Green Thumb, said in a statement. “The new RISE Express model is a huge step forward in making it easier and more efficient for patients to purchase high-quality cannabis as part of their everyday routine when stopping by their local convenience store.”
Florida’s Office of Medical Marijuana put the number of registered patients in the state at 758,526 as of October 14.
Circle K’s deal with Green Thumb is not the first time that the convenience store chain has sought to capitalize on legal weed. Its parent, Alimentation Couche-Tard, signed a deal last year with the Canadian cannabis retailer Fire & Flower to open co-located cannabis stores adjacent to Circle Ks, including one last month in Brampton, Ontario.
“This convenience-based shopping model is a major step change in the industry and provides a competitive advantage for both Fire & Flower and Circle K in the transformation of the cannabis consumer shopping experience,” said Stéphane Trudel, Fire & Flower CEO. “Fire & Flower anticipates reaching a total of 10 Circle K co-located stores operating using its technology and brands within the next twelve months.”
Couche-Tard took a 9.9 percent stake in Fire & Flower Holdings in 2019 before boosting its stake to 35.32 percent in April.
Fire & Flower is looking to expand into the U.S. with deals to license its Hifyre technology to other cannabis operations and to open its own stores. The company currently operates a location in Palm Springs, CA, and has submitted applications to open five stores in New Mexico.
- Green Thumb to Launch “RISE Express” Dispensaries in Florida – Green Thumb Industries, Inc.
- OMMU Weekly Updates – Office of Medical Marijuana
- Spark Perks Launches in Circle K Co-Located Store in Greater Toronto Area – Fire & Flower Holdings Corp.
- Fire & Flower Announces Exercise of Series B Warrants By Circle K Owner Alimentation Couche-Tard – Fire & Flower Holdings Corp.
- Fire & Flower Announces U.S.Market Update and Hifyre technology To Be Launched in Colorado – Fire & Flower Holdings Corp.
Discussion Questions
DISCUSSION QUESTIONS: Is Circle K’s move a game changer for the legal cannabis business? Do you expect other retailers in and outside of the convenience vertical to quickly move into the medical and recreational marijuana markets?
Poll
Loading …BrainTrust
Gwen Morrison
Partner, Candezent & Retail Cities Consultant
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Circle K’s move gets a jump on the industry, but broadening distribution alone isn’t a game-changer. The Canadian experience with cannabis is instructive. Cannabis stores got over-built and, just like the corner liquor store, have become ubiquitous. Any retailer considering adding cannabis to their product mix needs to think through the pros and cons of offering this product.
It may be. The reason for the caveat is that cannabis is proving more problematic as a legal product than it ever was when it was being sold by your next-door neighbor. Issues of regulation, the absence of federal regulation, branding, product consistency, and cost have slowed cannabis sales even in states where sales are fully legal. And yes, I do expect other retailers will start looking at the cannabis market, especially the recreational market. It gives new meaning to the phrase one-stop shopping — this way you can buy your weed and your munchies at the same place.
Game changer — no. *Kind of* a first mover advantage, I will go with that. The cannabis market is going to continue to loosen legislatively, state by state — there is too much demand and too many potential tax dollars to chase to leave that money on the table for states stall on legalization. Circle K is trying to serve a new(ish) market. “Reefer Madness” here we come…
Circle K’s move is a game-changer, increasing access to and awareness of, and changing attitudes toward, cannabis products. C-stores are making essentials more convenient, including grocery, pharmacy and healthcare items.
In states where cannabis is legal, expect more c-stores to add this growing category to their assortments.
I do think others will jump in quickly and we’ll see many new permutations of C-store cannabis offerings. However the landscape could dramatically change depending on federal government actions, which could either open the floodgates or apply more restrictive policies.
Cannabis at gas stations? It just doesn’t seem to be a great idea, but it will happen at c-stores across the country eventually, so we better get ready for it.
Circle K may be the first mover, but the rest of the industry will go to school on what happens there.
Cannabis is going to be ubiquitous. You have to think that first-mover advantage would be significant for Circle K.
My first reaction is that the convenience format has had to overcome decades of negative “vice store” imagery. But the fact that this is medical marijuana makes for an interesting offer. Dispensaries have strict procedures for qualifying doctor authorizations, etc.
In a test like this, they’ll need to be consider how core customers perceive the introduction of cannabis to their local c-store. For example, would some be fearful to get their gas at a co-located dispensary?
Many companies are sitting on the sidelines waiting to cash in on the emerging cannabis market. The big deterrent, in my opinion, is the patchwork of state regulations and the inconsistency of federal laws. This is an interesting test, but it’s only a small one. It can only be done in a few states where cannabis can be sourced in the same state where it’s sold, and it only applies to people with medical cards. It’s not opening up the market to everyone. And, until companies can safely use federally insured banks and ship their products across state lines without worry of prosecution, the expansion of this test outside of a few states will be unfeasible.
As a Floridian, I can tell you there are dispensaries on every corner so I’m not sure what makes this any kind of differentiator for Circle K. It smells like a robbery magnet (no pun intended at all).
I think once marijuana becomes legal federally, there are all kinds of better choices than c-stores — really, liquor stores or dedicated dispensaries make more sense.
I wish Circle-K luck. I can see a lot of challenges.
Despite Florida being a state of contradictions I agree, this is a game changer. And why hasn’t this been tried before, say in Whole Foods or I don’t know, Taco Bell? In any case, I’m for it. Getting pot off the ground in the land of the free has been a daunting task, it reminds me of what I read about the post prohibition period to a T.
The game on cannabis changed with state legalization. Circle K’s play is just part of the evolution. Once, alcohol was illegal. Then in 1933, that changed. Watch pot take a similar trajectory.
I don’t think this will be a driver to get your coffee and cannabis in the same place. There are lots of pros and cons. Let’s hope it doesn’t go up in smoke (no pun intended, of course).
This is a slippery slope. If you don’t know what I mean, you are probably already a user. Good luck.
This seems the reasonable next step with legalized weed. It would be good for society as it can continue to reduce crime around weed sales as well — especially if it becomes legalized nationally….
Anytime a retailer wants to introduce or place a product, service or issue at center stage where there isn’t perceived immediate natural alignment or agreement by most customers, it’s important to first test, listen and get it right. Sometimes the best decision is not merchandise and promote it in the middle of everyone’s shopping journey. Other times, the customer base already agrees with the decision and embraces it.
No doubt other retailers will be watching Circle K and learning.
Seems like a smart move to make the dispensaries readily available and in convenient locations where customers are already shopping. For some, there’s a stigma about going to a dispensary and I think putting them in a neutral, comfortable environment makes people more open to it.