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. - --- MAP posted-by: Keith Brilhart