Pubdate: Thu, 12 Aug 2010
Source: Martinez News-Gazette (CA)
Copyright: 2010 Gibson Publications
Contact:  http://www.martinezgazette.com/
Details: http://www.mapinc.org/media/5153
Author: Greta Mart

MEDICAL CANNABIS A BLOSSOMING BUSINESS, FOR MARTINEZ?

On Monday, the Public Safety Subcommittee finished reviewing and 
tweaking a new draft ordinance laying out operating rules for a 
Martinez medical cannabis dispensary; the draft is now under 
consideration by the city manager, city attorney and police chief.

After the discovery of gold in the American River was widely 
publicized in 1848, an estimated 300,000 prospectors flooded into the 
state over the following six years. The lure of easy money made 
simply by harvesting and hawking Mother Earth's bounty was an 
intoxicating enticement that eclipsed most physical obstacles.

Roughly 150 years later, a natural commodity once again engendered a 
'wild west' atmosphere, attracting entrepreneurs of all stripes 
jockeying to establish hegemony. This time the craze is over flowers, 
cannabis flowers. The aroma of tens of millions of dollars in annual 
profits is heady.

Between 1996, when California voters passed the Compassionate Use Act 
legalizing the sale of cannabis for medical purposes, and 2003, when 
the Legislature passed SB420 in an effort to clean up the nascent 
industry's figurative frontier, hundreds of medical cannabis 
dispensaries opened across the state. Some were backed by significant 
start-up capital but most by "well meaning activists with not a lot 
of [funding] or business experience," said Steve DeAngelo, owner of 
Harborside Health Center in Oakland.

"SB420 codified the fact that non-profit associations of patients 
would be allowed to cultivate and distribute cannabis, but it really 
set the stage for local jurisdictions to begin licensing and 
regulating sales," DeAngelo explained on Wednesday.

Despite SB420's goal to bring order to the industry, it was after 
enactment that there was an explosion of dispensary openings in Los 
Angeles and elsewhere. The legislation engendered a second wave of 
operators, coming from shadowland careers in pornography and 
gambling, said DeAngelo, who were mainly interested in making as much 
money as quickly as possible.

Soon 14 different dispensaries had opened up in a cluster in downtown 
Oakland. There were barkers on the sidewalk steering customers in, 
people shoving coupons in the hands of passerby, cars were double 
parking and many were opening smoking cannabis in public.

But as soon as local jurisdictions began heeding SB420's mandate to 
"promote uniform and consistent application of the [Compassionate Use 
Act] among the counties within the state," the tide turned on outlaw operators.

"It was the local regulations that was responsible for cleaning up 
the Wild West atmosphere," said DeAngelo.

In 2004, the Oakland City Council enacted the nation's initial local 
jurisdictional regulation, and authorized licenses to just four 
dispensaries. They also required geographical dispersion. In the 
first year, two of the four were unable to meet the permit 
requirements and lost their licenses.

In 2005, the Council revamped the permitting, making the process even 
more stringent, and reissued the available two licenses, one of which 
was granted to Harborside.

"Since then, the City has not received one single complaint [against 
the four dispensaries]. In fact, it conducted a survey of crime stats 
in those neighborhoods and found the level of crime had dropped in 
every case," DeAngelo said. "[The Oakland dispensaries] don't want to 
lose their licenses, so we are very careful. The key to [safe 
operating] is effective regulation at the local level."

In Martinez, the Council's Public Safety Subcommittee continues to 
refine a replacement ordinance that will, if approved by the entire 
Council, soon enable the issuance of one operating license the first 
year, and up to three thereafter.

Not unlike gold, dispensaries have become a million dollar industry, 
but those vying for their position in the Martinez market all claim 
altruistic motivations ranging from concern for patients to the 
potential profits to city coffers.

Of the several distinct entities hoping to be selected by the City to 
establish a Martinez dispensary, none--until now--are based here. 
Larry Flick of GreenLeaf Collective lives in Woodacre, CA. Robert 
Martin, Ph. D. of Collective Wellness is simultaneously seeking to 
open a Berkeley dispensary. Martin told the Gazette earlier in the 
year that his motivation for establishing a Martinez dispensary lies 
in his determination to bring legitimacy and quality assurance to a 
fledgling growth industry. An under-served market also factored into 
the equation when he and his partner, John Oram, Ph. D., were 
discussing possible dispensary locations in 2009, as did the City's 
management direction, said Martin.

Flick, CEO of the Bay Area retail chain The Floor Store, reiterated 
to the Gazette last week that his vision "is to provide a holistic 
medicinal center in an upscale setting ... to offer a warm, natural 
setting that anyone's mother or grandmother feels safe and secure in 
to receive medicinal cannabis products. Martinez provides an idyllic 
location in regards that it is a centrally located to areas such as 
Lafayette, Walnut Creek, Danville, Alamo and Moraga."

"There has been a great need to be able to offer services to these 
residents who are unable to travel to San Francisco, Oakland or 
having some unknown person deliver to their personal residence, or 
most importantly don't want to visit a collective that is operating 
illegally," Flick said. " I know there are many other competitors out 
there who have long, litigious histories of operating illegally and 
not working in unison, nor respect to city regulations, residents and 
officials ... We would be honored to provide Martinez with an upscale 
wellness center that would be a model of integrity and safety for the 
city and also a substantial source of tax revenue."

In the past two weeks, a new potential operator has indicated his 
interest in founding a Martinez dispensary; one who was born, raised 
and lives here.

While the Gazette agreed not to presently identify this individual, 
upon his request, his family is well known to many and is one of the 
top property owners in the immediate area. We'll refer to him under 
the pseudonym Homegrown.

During a late afternoon interview in his downtown office, Homegrown 
started the conversation by making it clear that he never considered 
a foray into the medical cannabis industry until recent months, when 
he began paying attention to the profits being reported by the 
Oakland dispensaries.

According to DeAngelo, combined the four Oakland dispensaries earned 
$28 million last year. Due to passage of Measure F in July of 2009, 
which Oakland voters approved by a landslide, a special 1.8 percent 
business tax is imposed on dispensary sales, bringing in just over 
half a million to the city's coffers.

"We would be crazy to let this opportunity pass us by," said 
Homegrown. But the difference between him and other prospective 
operators is crucial, he said, because he would reinvest a major part 
of net profits back into the City of Martinez. Homegrown envisions 
being able to serve as a one-man redevelopment agency, capitalizing 
on the exploding medical cannabis industry for the good of Martinez.
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MAP posted-by: Keith Brilhart