October 30, 2012

Arizona weGrow Franchise Accuses Rivals of Forming ‘Cartel’ to Sink Phoenix Store

Tags: arizona medical marijuana, hydroponics companies, wegrow

WeGrow Phoenix, which offers hydroponics equipment and consulting services, has filed a lawsuit claiming that a handful of rivals colluded to prevent it from gaining a foothold in the Phoenix market.

The suit names four companies that provide hydroponic lights, equipment and other supplies used by home growers and caregivers to cultivate marijuana: Sunlight Supply, Hydrofarm, BWGS and R & M Supply, according to Courthouse News Service.

WeGrow Phoenix claims that the four rivals capitalized on their positions at the top of the market to block out competition and “exclusively control the wholesale hydroponics supply market in the state of Arizona.” These actions kept prices artificially high and limited options for consumers, the suit alleges.

Local entrepreneur Sunny Singh opened weGrow Phoenix’s 21,000-square-foot “super store” in the spring of 2011. It ranked as the very first franchise operation for Oakland-based weGrow, which had big plans to expand into multiple states with MMJ laws including Michigan, Colorado and Oregon. But most of its planned franchise locations have not opened yet, and a few have even apparently closed. The company’s website now lists just two stores: the one in Phoenix and one in Oakland. WeGrow’s founder is also facing 13 felony counts in a lawsuit filed by the city of Oakland.

Very few ancillary MMJ companies (those that don’t deal directly with marijuana) have been able to expand nationally, which is extremely difficult given the volatility of the sector, differing regulations on a state and local basis and other issues unique to the industry. In weGrow’s case, resistance from entrenched competitors in a fledgling market ranks as another challenge.

6 Comments:

Marc

October 30th, 2012 at 7:06 pm

Sounds like they are sniveling because they have not been able to corner the market and become the “Costco of hydro stores” as they expected to. The pot whining about the kettle being black if you ask me.
William Wigle

October 31st, 2012 at 3:41 am

Chris Walsh. I personally want to thank you for publishing this news. With out it many of us Pro “Pot” people, would not be able to find out what is going on with the laws, pertaining to one of our favorite plant. I do wish You would keep us informed with what is happening in states, like Texas. I would like to have it legalized in the state where I live. I would like very much in helping it get done. I thank you again. sincerely.
chrisw

October 31st, 2012 at 3:44 pm

Thanks William. We appreciate the feedback. Once the elections are over, we’ll take a look at the next wave of states that could legalize MMJ. And if there are developments in Texas we will be sure to report on them. Thanks again.
growace

November 3rd, 2012 at 1:51 am

Just weeks ago undercover hydro farm and sunlight supply reps came into phoenix and closed accounts to those who talked openly about mmj in the store. They both said we don’t need mmj to be successful
John

November 3rd, 2012 at 6:07 pm

I have been to WeGrow in Phoenix twice. Both times I ended up regretting it. Their customer service is terrible, I ended up making 3 trips (30 min per trip) cause the item I bought was missing parts..

And also, they are in a very very bad part of town. No one I know wants to drive down there, when I am passing 10 hydroshops along the way.
WeGrow has nobody to blame but themselves for being failures.
Treed

November 21st, 2012 at 9:40 am

To GrowAce …those reps must not have checked the NYSE very well! I sure am! Big bucks headed down the pike IF you stay on top of which big suppliers are obviously doing just the opposite! More than one way to get in on a green gold rush.