The Plug wants to be a co-op for small businesses in the cannabis industry

By Drew Goretzka – Economic Development Reporter, Albuquerque Business First

Nov 1, 2023

The company plans to offer educational resources surrounding compliance, licensing and general business skills, alongside a pooled health insurance plan.

A new industry group launched Wednesday is hoping to represent small cannabis businesses in the New Mexico market.

The Plug is pitching itself as a co-op for those starting out in the New Mexico cannabis industry. The company plans to offer educational resources surrounding compliance, licensing and general business skills, alongside a pooled health insurance plan.

Matt Kennicott, CEO of The Plug, was previously a partner at Weeds. Cannabis Co., where he helped cannabis businesses gain licenses and operate compliantly. He was involved in cannabis policy during former Gov. Susana Martinez’s administration and was a policy analyst on the Cannabis Legalization Working Group under Gov. Michelle Lujan Grisham in 2019.

He said a recurring theme he’s seen during his time in the cannabis sector is a lack of resources that are accessible to small businesses. 

There’s a lot of folks out there that are mom-and-pop operators and they don’t have the access to capital as other larger businesses do, Kennicott said. We wanted to be able to step in and offer some of the resources that we know are needed out there.”

Those resources, according to Kennicott, include things like access to basic business education and learning how to track and project market trends.

Small cannabis businesses in New Mexico have struggled in 2023, with some blaming market saturation for weak profits. There has been consolidation within the state, with large dispensary chains like Albuquerque-based Dreamz and Denver-based Schwazze acquiring smaller competitors.

The Plug hopes to address small business owners’ concerns by offering seminars, workshops and other educational initiatives. Members will receive valuable market insights that will help them make informed decisions, according to a release.

There will also be a health insurance plan for higher-tier members of the co-op which Kennicott said can often be difficult to acquire for those starting out in the business. The plan will be a pooled model, with member businesses and their employees paying premiums directly to The Plug.

In addition, The Plug is meant to be an advocacy group that aims to be a collective voice for small cannabis businesses, Kennicott said.

One of the big things we’ve heard is that the small businesses don't get enough representation or don’t really get their voices heard, Kennicott said. This is a chance for everyone to come together, and have their voices heard and make positive policy changes for the industry.

Future services being considered include bulk purchases, in which supplies can be bought in bulk by The Plug for a better rate and then divided among member businesses. Affordability liability insurance, a mentorship program and job fairs are also in the cards.

Membership to The Plug is only available to businesses with 50 employees or fewer, and will start at $500 a year or $50 a month. A higher tier, which includes the health insurance plan, will cost $1,000 a year or $100 a month. Members can choose whether to pay monthly or yearly, with the yearly rate being slightly lower.

The organization currently has eight member companies and online application is available through its website. Kennicott said businesses who can’t afford membership fees may apply for a reduced bill, with The Plug’s board reviewing those applications.

Kennicott said he fully expects members to grow out of The Plug as they succeed in New Mexico’ cannabis industry. 

We want people to come into the organization and get the help they need, Kennicott said. “When they’re big enough to kind of not need that assistance anymore, they kind of go off on their own.”