Co-opt or Co-exist? A study of Medical Cannabis Dispensaries' Identity-based Responses to Recreational-use Legalization

• In Event: 466 - Regular Session. Organizations and Communities

Abstract

When recreational cannabis dispensaries first entered the U.S. market in 2014, how did incumbent medical cannabis dispensaries react? Did they emphasize their distinct identity as medical providers, distancing themselves from recreational dispensaries and those consumers who consume cannabis recreationally, or did they downplay their medical orientation in order to compete directly for potential resources? In this study, we seek to develop understanding of how local resource and sociopolitical contexts shape and constrain incumbents’ strategic responses to new category emergence. We propose and find that medical dispensaries in communities with weak sociopolitical support for recreational cannabis legalization advance identity claims that sharpen their medical orientation as the recreational cannabis dispensary density increases. In contrast, medical dispensaries faced with a local population that supports recreational use move to directly compete for control of overlapping regions of resource space by de-emphasizing identity-based distinctions between medical and recreational dispensaries. We further find that the preferences of a medical dispensary’s existing customer base also influence the identity claims it advances in response to recreational dispensary competition. Our findings help to advance understanding of processes underlying the strengthening and weakening of boundaries in the organizational world.

Authors

• Greta Hsu, UC Davis

• Balazs Kovacs, Yale University

• Ozgecan Kocak, Sabanci University