Cannabis store Kaya Herb House says plans are in place to open in St James, in late 2021 while the groundwork is also being laid for further Caribbean expansion.
Kaya Herb House was the first medicinal ganja retail operation in the Caribbean. Its retail centres, which can house 1000 patrons each, are now located in Drax Hall, St Ann; Lady Musgrave in Kingston and in Falmouth, Trelawny. Plans for a store in Rose Hall, St James, have been delayed, but are expected to mature in the fourth quarter 2021.
Group Chairman and CEO Balram "Bali" Vaswani told the Jamaica Observer, "We have had to evaluate the timing of our current expansion on the island. We need to embrace the changes as before most new patrons were coming from hotels in big buses, while in recent times, they have come from high-end luxury villas and Airbnb.
Formerly, visitors to the island accounted for 30 per cent of Kaya Herb House sales with the other 70 per cent due to locals. However, that has changed. Now it is 85 per cent locals and 15 per cent visitors, with buyers also moving to more frequent buying and less spending, Vaswani said.
Company revenue fell by 80 per cent in April 2020 compared to April 2019. It has, however, started to grow again, but at the end of June 2021, it was still down 35 per cent of what it was in the similar period in 2019, Vaswani said.
Meanwhile, the company is closely watching Montego Bay. The CEO said, "Although we are optimistic with the increase in tourists, the guests are not leaving the hotel unless they are going directly to an excursion based on the safety and quarantine rules in place at each location."
Kaya is continuing to buildout across Jamaica while working with partners in the Caribbean to lay the groundwork for Barbados , Trinidad, St Vincent, Bermuda, and The Bahamas, which Vaswani describes as countries "where the regulatory framework is more aligned to support our growth strategy."
He said that based on the existing pandemic, "it is very important for us to remain well-positioned for improving top and bottom-line performance in 2021, driven by our current growth initiatives locally as well as strategic partners and franchise operators in Uruguay and Cayman as they continue to further their expansion.
The company exports to partners in Cayman and has partnered with Quantum Ventures Holdings Limited in Uruguay, under a licensing agreement to open two locations.
Kaya operates as a group of companies with subsidiary herb houses encountering some challenges since COVID-19.
Vaswani said, "although we were profitable in 2019, in 2020 our board made a very difficult decision to stay open at all locations seven days a week. "
The company's Retail Herb Houses continue to be its greatest revenue centres, and, he stated, "we expect that with the prevailing circumstances surrounding travel and entertainment, this trend will continue. In each of our operating years, we have been able to increase our revenue, while seeing a decline on our expenses side especially during the pandemic."
He observed, "We have seen the tourist corridor recovering slowly compared to Kingston. Our Kingston location has seen a higher frequency of visits, but with a smaller spend per customer while both Ochi and Falmouth have been trending upwards in amount of patronage per day from Villas and Airbnb rentals.
Vaswani projected, "We can forecast when Sandals Dunns River, RIU , Bahia Principe and Moon Palace move to pre-pandemic bookings, we can expect to see an overall positive impact on the group in both medicinal and non-medicinal sales."
Vaswani said that the company's best product line is ganja or flower as it is referred to in the industry, at 61 per cent of sales, followed by oil and other by-products made from the plant at 39 per cent.
Other merchandise including souvenirs and other accessories are usually purchased by locals "in terms of necessity" compared to impulse buys by tourists, so that has been the greatest lag in terms of revenue streams, the CEO outlined.
