Oregon Distributor Ready for Export
Odyssey Cannabis considers itself a service provider for the farms and brands it represents in Oregon. This is one of the main differences between this distributor and other cannabis wholesalers that aim to buy products at the lowest possible price and sell them for the highest price. By partnering with the farms it represents and marketing on a commission-based model, Odyssey rises and falls based on whether or not its growers’ operations are thriving.
“Instead of a traditional business model where we buy from vendors and sell to customers, we like to think of ourselves as a multi-sided platform; we’re providing a service to our vendors and selling to the retail customers,” says Gabe Cross, Chief Executive Officer of Odyssey Cannabis.
All of the vendors with which Odyssey partners are Oregon-based, locally-owned companies with an emphasis on craft cannabis. Its many connections across the state allow the company to offer a variety of products ranging from dried flower, vape cartridges, and dab-able concentrates.
For the first two years, after it was founded in 2016, Odyssey was exclusively a distributor that carried the products of other growing companies. However, it recently launched its first two in-house brands. The first brand, called Day Trip, was a collaboration with the Ladies of Paradise, a woman-owned marketing firm focused on making the cannabis industry more female-friendly.
“When you walk into most dispensaries right now, there are very masculine color palettes and font styles and oftentimes a really ‘bro-ey’ attitude, but marketing research shows us that women consume cannabis at roughly the same rate that men do, so we felt like it was a very underserved population,” explains Cross. Day Trip, the first vape cartridge on the market targeted towards women, is a distillate cartridge flavored with fresh, frozen, cannabis terpenes.
The second in-house product is a distillate vape pen called Jam that is flavored with botanically derived terpenes extracted from a variety of plants outside of the cannabis family. This creates a variety of natural flavor profiles at a much lower cost. “It’s the same chemical compounds that are in cannabis, but the limonene instead of coming from a citrusy cannabis strain, literally comes from citrus peels. And the linalool comes from lavender, things like that,” says Cross.
Many other flavored distillate pens on the market have one-note flavors and tend to taste like candy. For example, the strawberry flavor may taste like a starburst and the lemon flavor may taste like a jolly rancher. These flavors are good on the first draw, but the taste loses its appeal after using the pen all evening. The new Jam product Odyssey is launching will be as close to real fruit flavors as possible. Rather than tasting like a starburst, it will taste like biting into a real strawberry.
When the recreational cannabis industry in Oregon began in 2014, there were very few limitations on licensing in an effort to bring the black market players into the legal system. This led to a flood of excitement and a three-year oversupply of cannabis products, which, in turn, resulted in an extreme drop in prices. Due to its sales commission business model, both the growers and Odyssey lost revenue.
In the span of four months, Odyssey was forced to lower its prices by sixty percent; it went from selling outdoor cannabis for one thousand dollars per pound to four hundred dollars per pound. “In that period, we were selling more cannabis every month, building market share, but our revenue was totally flat because prices kept dropping, so it’s just been an extremely volatile marketplace,” explains Cross.
The decline in price and the oversupply of cannabis led to multiple business closures in recent years. Odyssey is concerned about the lack of revenue, but considering that it is still here while competitors have gone out of business, it is clearly running a successful operation.
The cannabis industry in Oregon is continually changing and has already experienced its first major round of consolidation of the market. This time last year, there were roughly six hundred companies with licenses in the retail cannabis business, and today, those six hundred licenses are owned by approximately two hundred companies that have acquired smaller businesses. With such a rapidly changing marketplace, any business that grows too quickly will struggle to maintain its adaptability and flexibility throughout the transitions.
“In the Oregon cannabis industry, it’s the survival of the scrappiest. Whoever is the leanest and responds to the market most quickly is who sticks around,” says Cross.
In the last few months, the oversupply issue has steadily decreased, and the prices are returning to normal in Oregon. Many believed the oversupply issue would see no end, but numerous farmers have prudently decided to turn their dried cannabis into a shelf-stable product such as oil that can be stockpiled and sold at a later date. It can also be assumed that a significant amount of product has somehow been removed from the legal system and taken out of state. This is an important reason to legalize interstate trade between the states that have lawful recreational cannabis.
Oregon is one of the best places in the world to grow cannabis outdoors. Southern Oregon has a particularly ideal climate as it is located at the northern tip of the Emerald Triangle, a region known for producing the largest quantities of cannabis in the United States. Although Oregon cannabis users consume a high volume of cannabis per capita compared to other states, they cannot keep up with the amount produced within the state.
A few decades ago, the vast majority of cannabis in the country came from Oregon and Northern California, and once export between states becomes legal, Oregon will be able to fully take advantage of its ideal growing climate once again.
“We’ve been huge supporters for creating a legal framework for export because we really want to be able to bring the amazing craft cannabis products that Oregon produces to every state in the U.S. that will accept it,” says Cross. Odyssey’s long term vision is to export Oregon cannabis brands internationally as well.
When the export of cannabis begins, there will be room for every cannabis producer in Oregon to grow without having to compete against each other. The state can then work to promote its quality, craft cannabis brands to the rest of the world.
“I saw a statistic that opioid use has dropped significantly in every state that has legalized cannabis. And at a time when there’s literally people dying of overdoses every day in this country from opioids, it just makes sense to have as many alternatives as possible and to have such a safe and non-addictive option available.”
Cross believes that the U.S. will decriminalize cannabis at the federal level within two years and completely remove it from the DEA’s list of Schedule 1 drugs within five to ten years. A state-by-state patchwork will likely be put into place, and some states will remain dry, but hopefully, the federal government will soon be out of the cannabis prohibition business.
This values-driven company is working to lift the entire cannabis community in Oregon and is a member of several trade organizations. It is a founding member of the Craft Cannabis Alliance in Oregon and is an active member of the Oregon Retailers of Cannabis Association and the National Cannabis Industry Association.
Odyssey hosted a fundraiser and raised 4,000 dollars for the Craft Cannabis Alliance’s ONE Fix campaign on December 5, the anniversary of the end of alcohol prohibition in the U.S. ONE Fix intends to support interstate commerce of cannabis and full legalization at the federal level. Its roadmap consists of a state-by-state approach to legalize the import and export of cannabis before working with federal regulators to change the commerce laws.
A recent victory for the group came when the Oregon legislature passed a bill that makes Oregon export-ready. It gives the Oregon Liquor Control Commission (OLCC) and the Oregon governor the authority to create interstate compacts to move cannabis between states, but the bill also includes a federal trigger that prevents any action until there is a rule change in Congress that allows for interstate trade. The next step is to work on the State of California because it is most likely to be the second state that passes a law allowing for the import and export of cannabis.
As the industry develops, Cross is most excited about new product innovation and the medical research surrounding cannabis. “The vast majority of the information we have about the healing powers of cannabis is all anecdotal, and now that regulations are starting to be relaxed, we are going to see the first true clinical trials of cannabis use to treat ailments.” The medical benefits of cannabis are a critical component of the federal legalization process as the number of opioid prescriptions and opioid deaths where cannabis laws have become less strict has plummeted.
Oregon has a dynamic culture of craft production in several product categories. It is home to the Dundee Hills wine region that produces some of the best pinot noir wine in the world; it has a deep history of craft beer breweries and distilleries, and Portland has a large number of quality coffee roasters. “It’s a culture of really paying attention to detail and producing the highest quality products possible in all of these different fields, and cannabis is no different.”