Cannabis Outlet Store Doesn’t Think It Will Spark a Price War

Outlet stores are a staple of the retail industry and give many companies a much-needed revenue boost. Customers like them because they get brands names they love at a deep discount. A win-win. Dispensaries have been copying many methods of traditional retail and so it wasn’t going to be long before a cannabis outlet store popped up.

TGS Outlet Store opened in July in Silver Plume, Colorado less than an hour from Denver. The owners like the location because it’s right off the highway and convenient for tourists heading to the mountains, but is still accessible for Denver residents. It isn’t too far from a traditional outlet shopping center and so it fits in with the retail theme. Yet, it isn’t operated like a typical outlet store, which normally sells a lower quality product from a designer label and then claims to be discounted from a fake original price. That product is created specifically for the outlet chain.

The Green Solution has several physical stores in Colorado and the owners say that it is the same quality of products offered in their regular stores. “The variety of product offered like “mountain favorites” versus “metro favorites” and items for which we have a surplus of supply,” said Kyle Speidell, Co-CEO and Co-Founder of The Green Solution. “With cannabis, you do your best to project your product six months down the line, but since this is an agricultural product, we may have surplus of one strain versus another and that will take priority in our outlet store.” Since TGS is a seed-to-sale company, it isn’t selling other brands at a deep discount like a warehouse type of outlet store. Discounts will range up to 75%.

“The concept of an outlet store in the cannabis industry is an interesting concept,” said Ken Nisch, chairman of Detroit-area retail design & branded environments firm JGA and a partner in the dispensary company The Clinic. “Outlets existed originally to clear past season’s product, but more recently outlet retailing has become just another channel of distribution sometimes for lesser quality products that were manufactured for outlet sale only, or in some cases manufacturing “mistakes.” Nisch went on to say that designers like Coach and Ralph Lauren have begun to rethink their outlet business because it was cannibalizing their main business and hurting pricing.

Speidell doesn’t believe it will start a cannabis price war. “TGS Outlet store is not simply a price changer, it’s a concept change. TGS is dedicated to continuously offering the highest quality product at an affordable price.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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