• What assumptions do you hold about the case study?
• How would you assess the case study?
• Identify a list of hospitality and tourism methods that the company used?
• Think about your own experience as a consumer are you a supporter?
• List the hospitality &tourism methods you would avoid in the future?

Struggling to Serve the cannabis Tour Niche - Lorraine L. Taylor and Deborah L. Walker Introduction "What a great entrepreneurial opportunity," John Mace thought. Now that recreational marijuana was legal in Colorado, and several local distributors had opened for business. John thought that he could take advantage of this new market by offering tours to bring visitors to a local growing facility and a retail shop. His \"cannabis tour' would be a great addition to the local tourism industry and he could be a "cannabis concierge" who provided infcrrnation and education to tourists in addition to transportation to the locations. Alter all, John lived in an area where tourists loved to visit: the city of Durango in the mountains of southwest Colorado. Durango was a small resort city of nearly 18.000 residents. As the county seat and home to a small liberal arts college, it was the governmental. retail, and cultural "hub city' of southwestem Colorado. People visited the city for a variety of reasons and it seemed that it was always bustling with activity. Through careful preservation of its historic western architecture, the city boasted a vibrant downtown lled with the arts. shopping, and nightlife. The area provided abundant opportunities for biking, skiing, hiking. white water rafting, kayaking, hunting, and shing. In addition, the city was home to the historic Durango and Silverton Narrow Gauge Railroad and was situated within easy driving distance of Mesa Verde National Park and the historic mining towns of Silverton and Ouray, Colorado. The city's outdoor recreation opportunities and the surrounding mountain scenery were wonderful attributes. However. in addition to all of these attractions, many residents considered the city's best attribute to be its family oriented atmosphere. To many, this formed the bedrock of the residents' quality of life. It also was seen as one of the reasons that the area attracted tourists. Company Information The operation for High Up Tours and Transportation began very simply. The business was completely mobile and John was the only employee who drove a single luxury van. John would pick up tourists from the airport or their hotel and transport them to a retail marijuana shop and growing facility while providing commentary about the industry and the laws and regulations that govern the purchasing and consumption of cannabis for non-residents. What made John's business different from other transportation and tour companies was his love of the mountains and his personal touches. As he explained on his website, \"With us, you're notjust getting a driver and a ride. but a guide who was completely invested in providing you with a remarkable experience.\" As a one-man show, John gave every customer his own personal service. John received his bachelor's degree in Communications and began a career in marketing and brand management. He gained experience in the alcohol and tobacco industries and was a territory manager in Durango. Colorado. when Amendment 64 was passed initiating the legalization of recreational marijuana. John had an entrepreneurial spirit and realized the potential for marijuana tourism as a new niche segment. John began building relationships with local growing facilities and recreational shops and started High Up Tours to be designed around his new \"cannabis tour.\" In anticipation of the potential for a new market of marijuana tourists, John leveraged his relationships in the community to partner with retail stores that sold recreational marijuana as well as a location where the plants were grown locally. He designed the cannabis tourto include transportation to the store and the grow site and also his guidance as a cannabis concierge to not only make recommendations for local marijuana businesses but also to act as an educational guide and inform tourists of regulations and laws to keep them safe while purchasing and consuming marijuana in Colorado. As start-up with a limited marketing budget, John's marketing strategy was exclusive to promotions on his website as well as identifying potential partners within the local tourism industry who could build packages for tourists that included cannabis tours. Despite the potential for marijuana tourism to make a positive impact on the economy in Durango, John was surprised how hesitant tourism businesses were to partner with High Up Tours. Purgatory. the local ski resort, and the historic Durango and Silverton Narrow Gauge Railroad were two of the ap aractions in the area and both declined an invitation to partner with High Up Tours because of its association with marijuana. John had perhaps been blinded by the potential of legal marijuana as a motivator for tourism and had not considered the potential conicts within the existing tourism community when he started his cannabis tour business. But he soon discovered that being associated with a product that, although legal in the state of Colorado, was still considered illegal by Federal standards, posed its own business problems. Furthermore, marijuana use was still seen as anti-family, dangerous and not something that a whole-some vacation would include. He tried to break into the local tourist market by teaming up with the destination management organization that promoted tourism in the area but he was soon met with resistance Should John continue to pursue the potential target markets for his cannabis tour? How might he navigate the conicts from within the existing tourism community? The lndustryCannabls Tourism Although cannabis tourism was growing, city and state tourism boards still shied away from promoting marijuana as an attraction Marijuana lounges were against the law. and hotels were quick to provide their nosmoking policies when someone asks about using a marijuana vaporizer in their room or smoking ajoint on a hotel balcony (PotGuideoom). According to the Colorado Pot Guide: \"Marijuana tourism is a huge industry in Colorado While more and more hotels and lodging providers are starting to accommodate the cannabis tourism market segment, it is still early enough in the game that many commercial lodging providers are still dening their policies or are hesitant to publicly market themselves as marijuana friendly' (ColoradoPotGuidecom). As lodging properties struggled with howto accommodate 420 guests, private accommodations were lling the gap. Although Durango had not seen dramatic growth in cannabis tours, other areas in Colorado had. Cannabis tours were seen as a popular option to gain insight into the industry and get a behind the scenes look into specics into industry operations. Many tourists who came to Colorado had no information about buying marijuana, or even about consuming it. These tours could be a way to educate the new consumer. Tour companies across the state offered visits to commercial marijuana grow operations, glassblowing demonstrations, recreational dispensary visits and more. The tour companies all offered unique tours with their own perspective on the cannabis industry in Colorado. Some tour companies primarily focused on group tours in a large limo bus, while others, such as High Up Tours and Transportation, focused on smaller groups or private concierge style services. Tourism In Durango. Colorado In 2014, Durango received recognition for several awards. These awards included Top Value Ski Spot in North America by Tripadvisor, Top Ten Western Town by True West Magazine, and were included on the lists for Best Motorcycle Trip and Best U.S. Cycling Town by USA Today's Reader's Choice. There were two visitors' centers in the area and nearly 150,000 visits from tourists were recorded in 2014 in addition to over 450,000 visits to the tourism website and over 40,000 requests for hard copies of the travel planner. Geographically, Durango had identied that most visitors drive in from the key target markets from other areas of Colorado (Denver, Grand Junction, Colorado Springs). New Mexico (Albuquerque. Farmington, Santa Fe), Texas (Dallas, Houston, Austin, Amarillo, Lubbock), and Arizona (Phoenix, Flagstaff, Sedona). The only origin cities with direct flights to Durango were Denver, Dallas, and Phoenix (Durango Area Tourism Ofce Community Brieng 2015). Local tourism data showed that Durango was continuing to be a popular attraction. The number of enplanements had increased 0.81% from 191,980 passengers in 2013 to 193.537 passengers in 2014 (La Plala County Airport). Another important tourist attraction in Durango was the Durango and Silverton Narrow Gauge Railroad. Ridership on the train increased by 9.8% from 2014 to 2015 (Durango and Silverton Narrow Gauge Railroad). Mesa Verde National Park. a little over an hour from Durango. had 501,563 visitors in 2014, up 8.9% from 2013 (U.S. National Park Service). Furthermore, Durango's lodgers tax revenue increased by 11.6% from 2013 to 2014 (City of Durango, Colorado). The Consumer and Market Demand As of January 1, 2014, recreational marijuana possession and sale were legal in Colorado, within certa l'mits. All buyers must be 21, and the Department of Revenue regulated all licensing. While Colorado residents may have medical marijuana cards allowing them to purchase at a lower tax rate and at a greater number of locations. out-of-state visitors must purchase from retail marijuana vendors exclusively. There were different limits for sales to residents of the state of Colorado than to tourists from other states or countries. In a single transaction from a recreational marijuana store, residents may purchase 28 grams (or one ounce) while tourists may only purchase 7 ounces. However, the possession of marijuana was the same for both residents and tourists. No one may have more than 23 grams (or one ounce) in possession. This meant that it is legal for tourists to visit more than one shop and make multiple purchases of 7 grams to add up to their 28 grams (or one ounce) of possession. However, tourists must consume their purchases while they were in the state of Colorado was illegal to cross state borders into a state that had not legalized recreational marijuana. For both residents and tourists, it was illegal to consume marijuana on public property. According to Carrie Roberts, founder of 420 Intel Agency, a Colorado-based marijuana mystery shopping company. the fastest-growing demographic shopping at marijuana dispensaries was 35-to 50-year-old women as well as people born from 1946 to 1964the boomer generation Roberts also reported that older adults had the disposable income needed to purchase marijuana. \"T he average dispensary customer spends $156 a month," she said (Louisville BizBlog). A study prepared for the Colorado Department of Revenue by The Marijuana Policy Group found that purchases by out-of-state visitors represented about 44% of metro area retail sales and about 90% of retail sales in heavily visited mountain communities (such as Durango). Visitor demand was most prevalent in the state's mountain counties. where combined medical and retail marijuana sales more than doubled after retail sales were legalized in January, 2014 (Market Size and Demand for Marijuana in Colorado), Tourist destinations had a high ratio of visitors to residents, so the inception of the retail market services a large amount of marijuana demand by tourists. In a 2015 study, on average tourists spent more money per transaction when purchasing recreational marijuana ($104) compared to local residents ($65). While local residents had smaller transactions and were mostly purchasing bud, tourists were more likely to purchase a variety of products in addition to bud (hash, edibles, topicals, concentrates). Tourists relied on the intemet for information about where to purchase marijuana and chose the store based primarily on location while residents relied on word-of-mouth for information and were more concemed with service and product quality when deciding on the store where they would make their purchases (Proling Marijuana Tourists). Retail prices in mountain communities were 50%100% higher than prices for similar marijuana strains in metropolitan areas such as Denver. The price difference was most pronounced for small purchases For example. a single gram serving near Keystone, Colorado (a resort mountain area) cost $14.00, whereas the same gram for an identical strain cost $7.00 in Denver (Market Size and Demand for Marijuana in Colorado). The Marijuana Policy Group study also estimated that annualized marijuana demand for tourists was between 2.15 and 2.54 tons of marijuana (2014). However, this gure was expected to increase as more counties and Ex districts began permitting retail store fronts. The study estimated that tourist demand for marijuana in the mountain areas would double within the next couple of years (Market Size and Demand for Marijuana in Colorado). According to Harvard University economist, Jeffrey Miron, in 2016, another 5 to 10 smtes will likely consider legalization of recreational marijuanapossibly Arizona. California, Delaware. Hawaii, Maine, Maryland, Massachusetts, Montana, Nevada, New York, Rhode Island, and Vermont. Opinion polls showed that marijuana legalization now commanded majority support across the country (Why Congress should legalize pot). It and when this happens, visitor demand in Colorado should begin to decline as people are able to buy marijuana in other destinations or at home. But all of this is uncertain and for the immediate future, demand should remain strong. The Competition There were plenty of companies in the area offering tours: Durango Artisanal Tours, Durango Rivertrippers & Adventure Tours, Mild to Wild Rafting & Jeep Trail Tours, Southwest Raft and Jeep, 4 Corners Whitewater, Durango Raing Company, Outlaw River and Jeep Tours, Flexible Flyers Rafting, Hermosa Day Tours, Mountain Waters Rafting 8. Adventure Co Day Tours. Redmond Classic Tours, Wilderness Journey. However, only one other had taken the step to offer wnnabis tours (Durango Artisanal Tours). John thought that with just one competitor, he could still prot from having a \"rst mover advantage." Durango Artisanal driving tours. which was similar to John's scenic tours, was priced from $140 to $160 per person (six person maximum, four person minimum). John's comparable tours were priced to give larger groups a large discount. The price for one to two people was $349. Three to six people could do the tour for $399. While John initially started High Up Tours to operate cannabis tours exclusively, he soon realized that cannabis tours were only slowly growing in popularity and he was missing opportunities to provide basic transpormtion services or include other tour segments such as brewery tours and scenic tours. His competition in the basic transportation business included Animas Transportation, BuckHom Limousine, Oortez Cab, Durango Cab, Mountain Limo, Purgatory Resort, Redmond Classic Tours. Silverton Shuttle, Telluride Express, Tellurides. and Vllderness Journeys. His target market was difcult to dene and he saw a wide range of demographics but regardless of their age and income, cannabis was only an "appetizer\" to these tourists and they wanted to experience more of what Colorado had to offer during their visit. Based on this observation, John made changes to his business model to offer a wider variety of tours and transportation senrices. John saw an immediate nancial return when he began to promote brewery tours, scenic tours, and airport transfers. Within a few months, he estimated that only 20% of his business was coming from cannabis tours. The Controversy As a Destination Management Organization, The Colorado Tourism Ofce (CTO) had been closely monitoring how the legalization of marijuana impacted tourism in the state. The CTO acknowledged that marijuana tourists were a new market that encouraged the growth of marijuana tourism related businesses and opportunities for entrepreneurs such as John, Tours of growing facilities and stores were increasing around the state, as well as companies that partnered with hotels to provide Vaporizers to hotel guests wishing to consume marijuana while staying at the hotel. Marijuana resorts were developing into retreats where tourists could participate in marijuana related activities during their vacation aer making their purchases at licensed retail stores. Despite the potential for growth. there were marketing regulations in place that restricted the inclusion of marijuana promotion in any marketing material that specically targeted tourists from out of state. In 2014, there were over 71 million visitors to Colorado bringing in $18 billion into the economy and supporting more than 150,000 jobs (Colorado Budget Committee). A conoem of the CTO was that preliminary research showed that ma tourists were a very small segment compared to other target markets. such as the family segment Colorado offered opportunities to participate in outdoor recreation activities year round and a shift toward the perception of Colorado as a marijuana tourism destination had the potential to turn away their very protable family target market. After all, family oriented tourists could choose other states where recreational marijuana was still illegal as destinations for skiing in the winter and rafting and hiking in the summer. Based on the desire to protect the future of the family friendly market, the CTO took the stance that they would not actively promote recreational marijuana in any of their initiatives to improve and increase tourism in the area. Many towns and regions of Colorado had smaller Destination Management Organizations that followed the lead of the CTO. Andrea Seid, the Sales & Marketing Manager for the Durango Area Tourism Office (DATO). had the responsibility to identify target markets and reach them with marketing messages about why they should visit the Durango area. Andrea was a respected professional who had worked in the tourism industry in Durango for over a decade. She had been closely following what was happening with marijuana tourism and had been careful to follow the direction of the CTO and exclude any promotion of marijuana in her marketing material. Her marketing budget came directly from the allocation of Lodger's Tax and she was commit-ted to aligning with the CTO's position to be responsible about spending public dollars. Andrea was also the gatekeeper for all businesses requesting a listing on the DATO website. Many tourists searched online for information about the Durango area and are at some point directed to the DATO website, as it contains a variety of useful information to travelers. Having a listing on the DATO website was free to local businesses in the tourism industry. A relatively new and unique challenge that Andrea was encountering was thejob of evaluating whether businesses were related to marijuana before approving their listing that could link tourists to a website with content promoting marijuana. John initially reached out to DATO to request that his business be listed and linked on the website when he was primarily focused on cannabis tours. His request at that time was denied because the DATO board was rm on their stance that they did not actively promote marijuana tourism After being in operation for a few months, John started to realize that cannabis tours were a very small niche compared to other tourist activities offered in the Durango area. He realized that recreational marijuana was only \"an appetizer\" for most tourists; it was not the primary reason why they were visiting. He decided to expand his business to also indude scenic tours, brewery tours, and airport transportation. He found that these senrioes, despite facing area competition, brought in more revenue than the cannabis tours had brought in. John figured this expansion and rebranding would make him eligible for a listing on the DATO website. But when he reached out to Andrea Seid, his request was denied again. John's Decision After a series of heated email exchanges John and Andrea eventually came to an agreement that his business would be listed on the DATO website after all of the marijuana related content was removed. John realized that this decision was bigger than just the website listing. If the scenic tours, brewery tours, and airport transportation sewioes were more profitable, should John consider abandoning cannabis tours altogether and put all of his resources into his other senrices? If it was worth it for him to remove the marijuana content from his website in order to get a listing through DATO. was he even in the cannabis tour business anymore? It seemed like an easy decision but on second thought, he had been the first cannabis tour business to operate in Durango. He also thought that as more and more people got used to the idea of legal marijuana, the stigma of it being dangerous and anti-family might fade. Furthermore, more states were considering legalizing recreational marijuana. This trend could eventually lead to federal legalization, which could also change how people viewed marijuana use. He was not sure he wanted to give up his "first in the market\" position just yet. Clearly, the next step for John was an important one. Should he continue to operate the cannabis side of his business or simply stick to brewery tours, regional scenic tours, and airport pickup services