Growth Pattern

From the start of cannabis legalization in Massachusetts, Northampton was one of the most receptive communities, streamlining the municipal regulatory process and initially setting no caps on licenses. Meanwhile, Springfield posed a more onerous process and set strict limits.

Enlite has experienced both, having opened its first dispensary in Northampton in late 2021 and is getting ready to open a second shop in Indian Orchard this year, Springfield’s fourth dispensary in all.

Matt Yee, one of Enlite’s owners, sees value for business owners in both models.

“Springfield was a longer process getting through special-use permit hearings. Northampton, in comparison, was very, very open and friendly to cannabis businesses, which created the amount of licenses we see here,” he explained. “So in some ways, [Springfield] has been difficult, but that difficulty also creates a bit of a barrier for competition to come in; there’s only a handful of active licenses in Springfield.”

The fact that Enlite is expanding at all is an accomplishment in an increasingly competitive marketplace, one that has exploded with new businesses to the point where the industry is starting to weather its first closures, including the Source in Northampton and Pleasantrees in Easthampton.

And Yee and his fellow owners — who include Matt Cutting, Peter Picknelly, and Nick Yee — aren’t done, with plans to apply for a third license, the maximum allowed by the state’s Cannabis Control Commission (CCC).

“Most customers are shopping with their phone prior to coming in with us, seeing what our menu looks like, seeing what our price points look like, and if they can’t find the specific product that they’re looking for, then they’re going to go somewhere else.”

“We’re still hunting for that third location,” Matt said. “That makes for a more profitable and healthy business model. It’s hard to exist with just one unit. And we chose Springfield because the location fills a niche of demand.”

Specifically, Indian Orchard borders two towns, Wilbraham and Ludlow, with moratoriums on dispensaries, he explained. “We’re very close to both of those. So we saw that location in Indian Orchard as a prime spot.”

When Enlite opened in Northampton a year and a half ago, Yee and his team saw potential, not only in the state’s legalization of cannabis, but Northampton’s embrace of it. It was the city’s eighth adult-use dispensary, a number which quickly bloomed to 11 and now sits at 10.

“So competition has definitely gone up. But competition is good, especially in this industry. Just like in my former industry, restaurants, competition benefits the customer at the end of the day.”

Considering the experience of the Yee family and Picknelly in that other challenging industry, and Cutting’s business background, the Enlite leadership team felt it had a good chance of success in cannabis, and so far they’ve been proven right. That’s not to say there haven’t been obstacles to overcome, but so far, Enlite is not only staying the course, but setting their sights … well, higher.

 

Rolling Along

Soon after Enlite opened, Yee told BusinessWest that the sheer number of cannabis businesses in Massachusetts — which now tops 265 retailers, in addition to cultivation, manufacturing, and wholesaling businesses — actually makes it easier for the best-equipped players to succeed, because of the cross-pollination. It’s why Enlite has adopted the model of many area dispensaries of partnering with boutique makers of cannabis products.

“We work with about 65 wholesalers right now,” he explained during BusinessWest’s recent visit. “We try to give priority to those who are producing local here in the Pioneer Valley, and also give priority to minority-owned, woman-owned, and veteran-owned companies, and participants in the social-equity program or the economic-empowerment program of the CCC. Anybody who checks those boxes and has a quality product, we definitely give priority to.”

A wide variety of products is key, he added. “We have about 450 to 500 items on the menu at any given time, which is a burden to control inventory-wise, but we have systems in place and experience with that well enough to handle all those SKUs and provide a wide selection to our customers.

“Most customers are shopping with their phone prior to coming in with us, seeing what our menu looks like, seeing what our price points look like, and if they can’t find the specific product that they’re looking for, then they’re going to go somewhere else,” Yee went on. “Our mentality is, if they can find the item here and maybe try some new items too, then they’ll become a repeat customer with us.”

“To kind of wade through the chaff and find the quality product at the right price point that the customer will enjoy can be a little overwhelming.”

He said many customers settle into buying favorite brands, but still appreciate variety.

“Five years ago, there weren’t very many brands, and quality wasn’t the highest, but now, with the level of competition we’re seeing in the wholesale market, there are brands that are definitely excelling. We have a couple of brands in-house that are excellent performers, and people come back for more.”

With competition forcing retail cannabis prices down to five-year lows in Massachusetts, Yee said his time in the restaurant world, where stiff competition also challenges profit margins, has taught him the value of customer service, as well as product knowledge and customer engagement — all factors that make the experience easier and more enjoyable, especially newcomers to the cannabis world. “That’s something we really pride ourselves on and strive for.”

The other differentiating factor is location — not just the strategic second location in Indian Orchard, where competition in the immediate environs is low, but in Northampton, where the flagship store sits right off the Coolidge Bridge rotary.

“Everybody’s kind of congested in the downtown area, which makes it far more difficult because somebody could just walk next door and find a cheaper price and buy there,” he said. “Here, with our location, situated right by the bridge and off the highway, we provide a convenience for people. It’s easy in, easy out, with plenty of parking that’s tough to find downtown. Our consumers want convenience, so that’s the other aspect we try to excel at.”

 

Highs and Lows

That said, Yee was quick to stress that captivating an audience and generating repeat customers is a constant focus, not something Enlite takes for granted.

“I think the other challenging aspect is the amount of wholesale product that’s becoming available on the market,” he explained. “Something I buy this month may be far less expensive two months from now, which would mean another retailer might pick it up for that price point and sell it for that price. So we’re seeing constant fluctuations in the price points of the wholesale product.

“That, along with the sheer amount of wholesalers that are knocking on our door and calling our phone, is pretty overwhelming,” he went on. “To kind of wade through the chaff and find the quality product at the right price point that the customer will enjoy can be a little overwhelming.”

Some cannabis-industry observers have commented on the experience of other states that followed a similar pattern to what’s happening in Massachusetts — exploding competition sends prices plummeting, and many operators focus on competing on price above all else, including quality and customer experience.

“We’ve always been conscious about that. We’re not trying to race to the bottom,” Yee said. “There are some operators here in Northampton who are dropping their prices, and all the other operators are forced to match those prices, which is difficult. But maintaining a healthy economy here in the Western Mass. market is something that we think about a lot. We’re not trying to drive the prices down too low and hurt everybody’s margin. There are definitely some players in town who are playing that game.”

Enlite will be the second minority-owned dispensary in Springfield, after Six Brick’s, which opened in September 2022. Enlite’s Northampton site was also the state’s first Minority Business Enterprise (MBE) applicant to open its doors, and Yee said the process of getting into the industry is still laden with minefields, especially for smaller entities.

“It’s definitely difficult. The requirements to get through the licensing procedure and then the buildout, inspections, and final licenses … it’s strenuous, and a lot of that knowledge is unknown to those smaller operators,” he explained. “So a lot of money can be burned just going through that painful process and experiencing that learning curve. And for those smaller operators who don’t have the capital of the big, multi-state operators or well-capitalized groups, that can be very difficult and sometimes detrimental to the business.”

As Enlite grows and expands, Yee said he’s still learning new things all the time, whether it’s a new product — from fast-acting edibles to new beverage lines — or a new market opportunity. “There’s something new coming out every month, it seems, and the customers are being introduced to those products with us.”

 

Business in Bloom

Yee has said Enlite’s biggest competitor is the black market, but analysts have pointed out that the leveling out of prices in the legal cannabis market may mitigate the illicit market’s advantage somewhat — while bringing on a whole new set of headaches in an industry where profits are already very tight due to onerous taxes.

He hopes, as consumers find more options in their price range, that stores that focus on quality, education, and customer experience will maintain an edge. And he said dealing with those customers, and hearing their stories, is his favorite part of the job.

“On a daily basis, we have first-time consumers come in, curious about cannabis and wanting to learn more. I have so many stories of first-time consumers coming back in and saying, ‘wow, that really helped me. That got me to go to bed more regularly. I got more sleep. I’m less stressed out. I have more fun with my kids — thousands of stories like that.

“Every day, somebody comes in, and we have a great conversation, and we can introduce them to a new product that they didn’t know existed, and we’ll see them back here a couple of days later. And there are still a lot of people who are just wading into this industry and finding these products.”

And finding them at a shop that continues to navigate an ever-changing, always-challenging landscape for business owners, with not just survival in mind, but continued growth.