EASTHAMPTON — In what may be another indication that the region is approaching the “green ceiling” of retail marijuana sales, Pleasantrees closed its Easthampton dispensary at the end of January and is trying sell its Amherst store near the UMass campus.

The Michigan company opened the Easthampton dispensary at 195 Northampton St. (Route 10) in the summer of 2021 and closed it on Jan. 31, according to its website. The company did not respond to a request for comment.

The closing comes a few weeks after another dispensary, The Source on Pleasant Street in Northampton, was shuttered in December after 10 months in business. Additionally, cannabis tax revenue collected by Northampton continues to decline.

“In my mind, it was always clear that so long as people felt they could open another retail store and have it be viable, they would try,” said Thomas Peake, a senior research analyst in economic and public policy at the Donahue Institute at UMass Amherst. “At some point, the market would become saturated and places would close. I think the only way you can figure out the ceiling in an industry like this is to exceed it … and we might be at that place right now.”

Mayor Nicole LaChapelle, who was present for Pleasantrees’ ribbon-cutting ceremony on July 28, 2021, called the closing of the business “unfortunate” for everyone involved.

“The reality is most new businesses fail,” she said. “With the steep learning curve of a newly regulated market and high costs, the barriers to success are even steeper for companies. Overall, Easthampton’s cannabis culture is steady, in large part because of our Planning Department and City Council’s due diligence early on.”

Pleasantrees also had plans to set up a dispensary in Greenfield, but decided against it in January of 2022.

The company’s other retail cannabis establishment in Massachusetts, located at the former site of Rafter’s Sports Bar and Restaurant on Amity Street in Amherst, which opened in March of last year, is still in operation.

However, the company may be looking to sell that location, according to a post from the Green Market Report, an online site that tracks the industry’s financial, business and economic news.

Pleasantrees, which operates five cannabis dispensaries in Michigan, reportedly sent out an email blast offering a “lease takeover with no down payment,” for two “turnkey, operational dispensaries licensed for both adult-use and medical.” The excerpt of the flyer is featured on an opinion piece at Cannabis.net.

The email also stated that the company was looking to focus its operational efforts on its locations in Michigan and was offering a “no-cost acquisition of its assets.”

How much is ‘too much’?

Although the cannabis industry is one of the fastest growing in the country, it is still a budding sector. And as an emerging industry, trying to define demand or the behavior of consumers can be challenging, Peake said.

Prior to the state’s legalization of marijuana, consumers were either purchasing the product in other states or through the black market. When marijuana was legalized in 2018, there was also a section of the population who previously did not partake in recreational smoking because it was illegal. With those combined factors, retail businesses had a chance to step into an untapped industry — once they were able to leap over state and municipal applications.

“Initially, there were huge lines around businesses like NETA and INSA,” Peake said. “I remember when marijuana was first legalized, people were coming as far away as Kentucky to purchase it.”

Retail cannabis companies began popping up and competing for customers throughout the Valley. At that point, a pretty significant portion of the customer base was also coming to the Valley from New York and Connecticut. With both states legalizing recreational marijuana use and opening up dispensaries of their own in recent months, Peake said it’s likely the industry will see demand somewhat level off and perhaps even decrease.

“I think we all had a sense from the beginning that demand for this product was not unlimited, but it is tough to really know how much is ‘too much,’” he said.

While Peake feels bad for the company’s employees and those who start a business and it doesn’t work out, he said that people shouldn’t interpret the Easthampton closure as a sign of a “major crisis” brewing within the industry.

In fact, the Cannabis Control Commission reported that adult-use marijuana establishments surpassed $4 billion in gross sales from 2018 to the end of January, according to the state’s mandatory seed-to-sale tracking system.

With the closing of Pleasantrees, there are currently 27 dispensaries in Hampshire County and Holyoke, including 11 in Northampton and four each in Holyoke and Easthampton.

Emily Thurlow can be reached at ethurlow@gazettenet.com.]]>