Brian Yauger (left) meeting with Dustin Barrington, manager of a new pot shop in Fremont called Hashtag.
Brian Yauger (left) meeting with Dustin Barrington, manager of a new pot shop in Fremont called Hashtag. Kelly O

Washington State’s newly legal cannabis capitalists don’t tend to agree on much. Ask any one of them about any current pot-business topic—the regulation of medical marijuana, indoor versus outdoor grows, whether labs fudge pesticide and potency test results for favored clients—and you’ll find yourself in the middle of a passionate harangue. But the more you talk to them, the more they seem to agree on one refrain: However volatile our market might seem, and however much investment capital is sloshing around trying to turn itself into profit, the big bucks haven’t even shown up yet.

As Gordon Fagras of the lab Trace Analytics put it: “The big players are just standing back. They’ll be coming in slowly, picking up the pieces as other businesses fail.” Because marijuana is still federally criminalized and the market is so young, the heavyweight financiers—in big agriculture, big tobacco, big pharmaceuticals, and big alcohol—are biding their time. But when they arrive, cannabis data analysts like Brian Yauger (of the local company Tetratrak) and Jonathan Rubin (of New York–based New Leaf Data Services) will be rolling out the welcome wagon and trying to turn them into clients.

Yauger and Rubin are in the same business, but the contrasts between them are a case study in the different personalities—newcomers and longtime pros—trying to make their way in the new cannabis marketplace.

Yauger is a Texan who coached college football for decades before starting a “green” construction business in Austin that helped commercial properties meet environmental standards by filling their roofs with insulation and coating them with epoxy to reflect solar heat. Then he met, in his words, a “multi-, multi-, multi-millionaire” from the Seattle tech world who convinced him to move up here and get to work analyzing the local pot market.

His business, Tetratrak, analyzes public data and sells information to subscribers. Yauger can tell you the most popular day to buy weed in Washington (Saturday), the number of customers at recreational pot stores on July 12, 2014 (2,188), the average wholesale and retail prices of a gram that month ($15.88, $27.95), the number of customers on June 27, 2015 (21,385), the wholesale and retail prices that month ($3.74, $12.91), the most popular strains in Seattle right now (Blue Dream, Cinex, Dutch Treat), and where the highest-revenue pot shops are these days (in order: New Vansterdam and Main Street Marijuana in Vancouver, Uncle Ike’s in Seattle, Herbal Nation in Bothell).

“Every time someone scans a bar code, weighs a plant, or rings a cash register, it goes into a data-tracking system, and I put it into a usable form,” Yauger says. “Most companies out there right now doing data analytics—their target customer is the investor, and I get that.” Those companies, he says, can make more money off a single report that synthesizes information for big-money observers than he can from granular, week-to-week analytics for small businesses. “But we are heavily invested in the actual [cannabis] company.” Yauger is the Wild-West, locally oriented type who wants to sell retailers and growers the information they need to figure out how to run their businesses.

Jonathan Rubin, on the other hand, grew up in Connecticut and New York and spent 15 years working commodities data for McGraw Hill Financial, Inc., the parent company of Standard & Poor’s and the majority owner of the S&P Dow Jones Indices. He was working on petrochemicals price analytics when the legalization trend began. “Cannabis is a once-in-75-year, maybe once-in-a-100-year event,” he said. “I thought, ‘I cannot be on the sidelines. I must be part of this. What skill set can I bring to the industry that others can’t?’”

He founded New Leaf Data Services, which not only looks at publicly available data but hires on-the-ground price reporters to track wholesale valuations—legal ones in post-prohibition states like Washington ($1,733 per pound last week) and Colorado ($2,085 per pound), and black-market trends in states like Arizona ($2,219 per pound) and Nebraska ($3,400 per pound). Rubin has a bigger-picture view of cannabis price trends—and, he says, as long as the majority of Americans are buying their pot from black-market sources, the black market will drive legal-market prices. “The tail is the legal market and the dog is the black market,” Rubin says. “The dog is wagging the tail. Black-market cannabis makes its way into legal channels and vice versa. It happens every day, all over the country. People shouldn’t be naive about that.”

Rubin hopes New Leaf will be indispensable for the cannabis futures market when it emerges. And he is confident that it will—just like the futures markets for corn, butter, and oil—once the federal government finally acknowledges that the legalization of marijuana is a fait accompli. When will that happen? “Well, 2019 seems reasonable,” Rubin says. Then, he predicts, cannabis capitalism will hit the big time.

Until then, the mom-and-pop entrepreneurs will have to try to grab as much market share as they can—and see if they can hold on to it when the turbulence comes.