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.
Opportunity knocks
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.
State-licensed
consultants
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.