Pubdate: Thu, 03 Mar 2016
Source: SF Weekly (CA)
Column: Chem Tales
Copyright: 2016 Village Voice Media
Author: Chris Roberts


Buying cannabis in San Francisco has been supremely easy for a long 
time. If walking out the door to one of the city's 28 licensed 
dispensaries was too onerous - or if "your guy" was out of town, or 
if you were tired of dealing with the dealers on the street - you 
could pick up the phone and call one of more than 40 weed delivery services.

The problem was that, with a few notable exceptions, these deliveries 
were all of varying degrees of illegitimacy. Next to none of them had 
city permits; a few even didn't care if you were a legitimate medical 
cannabis patient with a recommendation from your doctor.

This mattered beyond a mere obsession with the rules. For the 
consumer, there was no quality guarantee. (Problems with lab test 
results aside, a fly-by-night operation is not going to spend time 
and money testing its stock for mold, pesticides, or other common 
contaminants.) For the government, this meant lost revenue from 
dodged sales taxes and permit fees. And for the cannabis "movement" 
trying to sell itself as a legitimate industry, this meant trying to 
explain away one more activity too close to drug dealing.

An unlikely character has come to the rescue in the form of Donald 
Carmignani. Carmignani - a bull of a man with slicked-back hair, 
meaty fists, and a penchant for gold chains, bowling shirts that Guy 
Fieri might envy, and Irish whiskey - is the owner of 214 California 
Street, a small commercial building a few blocks from Market Street 
in the Financial District.

Last fall, largely based on the premise of legitimizing delivery, 
city planners gave the OK for 16 coveted medical cannabis dispensary 
permits at 214 California, the most weed licenses ever awarded in one 
fell swoop in San Francisco. (Typically, cannabis sales permits are 
awarded one at a time.)

This means that Carmignani, a multi-generation San Franciscan from 
the Marina District, has the distinction of being the city's biggest 
medical marijuana landlord.

As someone who has lived here all his life and had success in 
business - he sold off a "information management" company before 
delving into real estate - Carmignani is also tied to the city's 
power structure. His father, also a property owner, was for years the 
landlord of Balboa Cafe in the Marina District, an eatery owned for 
years by Lt. Gov. Gavin Newsom's PlumpJack Group. (Conveniently, 
Newsom happens to be a vocal supporter of marijuana legalization - 
and also happens to be tight with billionaire Sean Parker, who is 
bankrolling the adult use legalization initiative vying for the 
November ballot.)

Mayor Ed Lee appointed Carmignani to a seat on the city's Fire 
Commission - where current Board of Supervisors President London 
Breed served before she was elected to office. He held the post for 
only four months, until an arrest for felony domestic violence 
precipitated his resignation. (He pleaded guilty to a misdemeanor 
charge in the fall, and was sentenced to a fine, probation, 
counseling, and the surrender of several firearms.)

He was not present when 214 California Street was approved by the 
Planning Commission, largely on the grounds that licensed delivery 
services would do away with the unpermitted ones and thus be a civic benefit.

But if it will be good for the city, it will be very good for 
Carmignani - who has managed to secure a commodity, the license to 
sell weed in San Francisco, at a time of peak demand. And he doesn't 
have just one, either. Carmignani is the landlord for 16 medical 
cannabis dispensary permits, which he can rent out at market rate.

And market rate for a license to sell marijuana via delivery? 
According to people who have had dealings with Carmignani: up to $1 
million just to get in the door, and from $7,000 to $10,000 a month 
in rent. And that's just for a single permit.

Neither Carmignani nor his attorney, Brendan Hallinan, would comment 
on the financials. But the opportunity they're offering seems to be 
in demand: Records show that of the 16 permits available, seven 
delivery services operating out of 214 California received 
provisional dispensary permits from the Department of Public Health 
in December. They can begin delivering marijuana when the final 
buildout on the property is completed, which will be sometime in the 
next few months, Hallinan told SF Weekly.

For his client, this was a bit of a gamble. Carmignani bought the 
building in 2011, at the depths of the recession, and managed to hang 
onto the property despite it falling into default twice, records show.

"He had the building vacant for four years - that's how long it took 
to get this thing done," Hallinan said. As for the sky-high rental 
prices, "he's letting the market dictate."

And the market has never been higher. Legalization might be around 
the corner, but moreover, under the recently passed state regulations 
governing cannabis - the Medical Marijuana Regulation and Safety Act 
- - any business in operation now will have priority for a state 
license, which will be required starting in 2018.

And getting a license in San Francisco is notoriously hard. If you're 
a delivery service, you may have no other option than to go through 
Carmignani, San Francisco's new medical marijuana don.
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MAP posted-by: Jay Bergstrom