CHAIN REACTION: Marijuana industry looks into franchising

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AURORA | If you’re looking to get into the restaurant game, chances are you aren’t looking to go it alone.

With hundreds of well-established and popular franchise options — think Domino’s or McDonald’s — many opt not to launch their own business and instead buy their way into a franchise, leaning on a big corporation not just for branding help, but for the sorts of supplier connections that every new business needs.

What about in Colorado’s booming but complicated legal marijuana business? If you want to get started, you haven’t really had those options.

One Cannabis, which operates two retail locations in Denver under the Green Man dispensary label, as well as a booming grow operation in northeast Aurora, is looking to change that by capitalizing on the franchise philosophy.

One Cannabis CEO Christian Hageseth said that before he got into the legal pot business almost a decade ago, he had worked in other sectors where franchising was practical option.

“You really appreciate what it means to have some direction, have some help, have a plan that is already out there that you can follow,” he said. “There is nothing harder than trying to make something up yourself.”

In the marijuana business, that could be doubly true, he said, because business owners face a variety of challenges that other parts of the economy don’t face — including a federal government that still says weed is illegal, a lack of banking options and a tangle of local regulations that make finding real estate especially tough.

Hageseth said One Cannabis already has agreements with three franchisees in Ohio, one in Michigan, one in California and five in Colorado.

The goal, Hageseth said, is to have about 100 franchisees up and running in those states and maybe a couple others by the end of 2019.

That’s a lofty goal, but Hageseth said that considering the hurdles One Cannabis can help those new business owners clear, it’s a doable one.

New shops looking to determine just how much product they need to have when they open, and what the ideal product mix should be, will be able to turn to One Cannabis staff who have already been through those struggles, he said.

“We are going to have those answers,” he said

Marijuana businesses also often have trouble finding the ideal site for their stores because many landlords are leery of a product that the federal government still says is illegal.

One Cannabis Vice President John Darwin said in a statement announcing the company’s plans that those challenges steer some people from working in the marijuana industry, something he thinks the franchising idea can stop.

“As a One Cannabis franchisee, you don’t need to figure out how to talk to a landlord or secure a bank account because we know the best partners to work with. We have hundreds of vetted business relationships, so you only need one — us,” he said in the statement.

According to the International Franchise Association, there are more than 730,000 franchise businesses around the country and accounted for almost $270 billion in 2016.

Hageseth said that as marijuana has grown in Colorado, it only makes sense that the business goes down the franchise route the same way fast food restaurants and other retailers once did.

And while other dispensaries have talked about launching franchises in recent years, he said he is confident One Cannabis is further along in the process than anyone else and poised to launch the first marijuana franchises.