Pubdate: Sat, 04 Feb 2017
Source: National Post (Canada)
Copyright: 2017 Canwest Publishing Inc.
Contact: http://drugsense.org/url/wEtbT4yU
Website: http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Sunny Freeman
Page: FP4

PRINCE & PRINCESS OF POT

Prince and princess of pot are expanding their dispensary empire,
whether it's legal or not

Jodie Emery struts through the hazy hallway of Cannabis Culture's
flagship Toronto store, through a 15-person deep checkout line, and
then past the extracts, pre-rolled joints and display jars of bud into
the lounge area where a group of pot enthusiasts is sparking up.

It is just after noon on a Wednesday.

The 32-year-old Cannabis Culture owner makes several attempts to call
her husband Marc, a famous marijuana legalization advocate, to wake
him up. The Prince of Pot likes to sleep in, she explains, because he
works past midnight, which is closing time at his shop in Toronto's
gay village downtown.

Marc emerges half an hour later. He joins employees behind the counter
to recommend strains and weigh portions f or t he rapidly growing
lunchtime rush. Marc is focused on the Toronto flagship locale he
owns, while Jodie oversees the franchising and most other aspects of
the business.

"This is what legalization looks like," Marc said. "That's exactly
what we want to present to the government: you can go and do your
rules and your thing and we're going to do our thing."

Many in the scene consider the Emerys weed royalty and the couple's
hard-fought decades-long dream of legalization may be on the cusp of
fruition. But even as the government pursues legislation to set up a
legal recreational market, the question of whether dispensaries such
as theirs will be allowed to operate above ground hangs in the air.

Depending on the specific wording of the legislation, Canada's prince
and princess of pot could very well be excluded from the opportunity
to earn a legal living in a recreational marijuana market that is
expected to be worth as much as $ 22.6 billion annually. In the
meantime, a plethora of ganjapreneurs are looking to gain a foothold
in the coming pot economy through the only current legal path, by
becoming a Health Canada licensed medical marijuana producer. Many
more are simply opening dispensaries on the sly, hoping to fly under
the radar as they count down to legalization.

The Emerys worry licensed producers will monopolize the commercial
system, but even if they are shut out, it will not deter the defiant
outsiders from their aggressive expansion plans.

The couple is relatively new to the dispensary business, jumping in
less than two years ago with their first store in Vancouver and
deciding to expand last year at the request of interested investors.

"When the opportunity came up to start dispensing cannabis I thought
why not? If everybody else is doing it why shouldn't we after all
we've done?" Jodie said.

It's a decision that has paid off so far. The crowd at Cannabis
Culture's flagship dispensary was just an average weekday, and sales
spike on weekends. This location, one of 18 franchises, can pull in
between $30,000 and $40,000 a day.

One man calls out to Jodie to say he's one of her 38,000 Twitter
followers. Another guy thanks Marc for his years of sacrifice to the
cause, which include a five-year sentence in a U. S. federal prison.

For a guy who sometimes gives pot away for free, Marc keeps a keen eye
on performance metrics and knows last Friday's customer head count:
1,783. "You don't have to be a genius to figure out that's a good
cash-flow business," he said.

It could be even better if dispensaries like his become legal. A task
force report on legalization has recommended the government allow
storefront locations in addition to the current mail-order system and
acknowledged a majority of people who participated in the consultation
process prefer a distribution system that includes
dispensaries.

Yet it remains unclear whether new government legislation will allow a
place for the 400 or so dispensaries already operating.

The shops, most of which maintain at least an ostensible medical
purpose, argue that they fill a gap for consumers by offering
in-person advice, fostering competition and keeping prices low.

Marc has set an ambitious goal of opening 200 locations by the end of
2017, whether they are legal or not.

"Those questions to me are irrelevant, we just do what we do. We're
going to keep doing it. As long as the law is wrong we will disobey,"
Marc said. "After prison, I didn't want to be relegated to irrelevancy
so I had to take the lead in provoking the authorities by opening up
retail shops."

And provoke he does.

Marc was most recently arrested just before Christmas, when cops
raided six Cannabis Culture locations in Montreal, the day after he
made a splashy debut in the city by bestowing free "nugs," or
marijuana buds, on throngs of admirers. Similarly, the flagship
Toronto location opened a day after raids shuttered dispensaries
across the city last May.

How police handle dispensaries varies widely across the country, no
more so than in the country's two biggest markets. Vancouver has opted
for a licensing system while Toronto police continue to crack down and
raid dispensaries, citing public safety concerns.

Emery wears his 289 arrests, eight raids and five years in prison as a
badge of honour. After all, the raids attract media attention and that
attracts even more customers.

"Raids are just part of doing business. They're annoying and they
certainly set you back, but ultimately the police are wrong and we're
right," he said.

Raid-related expenses, including covering the costs of lawyers for any
employees who get arrested, have been built into the cost of doing
business. But the Emerys also have to think about the more mundane
aspects of growing a franchise business, such as how much of a cut
they should take. Jodie has been studying the Subway sandwich model
and working with a franchise lawyer to help figure it out.

Cannabis Culture's model asks for a $ 10,000 investment up front, plus
a royalty of six per cent for the first six months, rising to seven
per cent afterward. But she thinks they might be lowballing it.
Subway, by contrast, asks for $ 15,000 upfront and a 12.5- per-cent
royalty each month.

Cannabis Culture franchises can take in anywhere from $ 2,000 to $
40,000 a day depending on their location, but about 60 per cent of
that goes back into the stores, mostly toward buying new product, Jodie 
said.

Like all dispensaries, Cannabis Culture operates outside the law, so
the Emerys have established their own guidelines: they don't record
customer information, do not require a doctor's note and ask customers
to show ID to prove they are over 19. HST is tacked on to all prices
and payroll taxes are collected. Marc estimates they have turned over
about half a million in taxes to the government.

The details of their supply chain are sketchy. Jodie said much of the
product comes from brokers who get it from those with medical growing
licences. Many of the connections have stood for decades. She equates
the growers to farmers at a local market. They are proud of their
product and would like to come forward, but prohibition forces them to
stay in the dark.

Product quality is mostly assessed by a sight and smell test by store
employees. But bigger    locations such as the flagship store owned by
Marc work with a lab to test strains for pesticides, mould and
tetrahydrocannabinol ( THC), the psychoactive ingredient in pot, and
cannabidiol     ( CBD), the ingredient said to have therapeutic
effects. The tests can cost about $150 each, prohibitively expensive
for most small-time operators.

Despite some unusual costs factored into t he underground business,
interest in Cannabis Culture and the Emerys runs high among investors
- - a diverse group that includes fellow activists as well as
deep-pocketed business-types - who don't seem to be deterred by
dispensaries' questionable legal status.

"' I've got hundreds of franchise request emails coming in from all
across Canada and even the U. S.," Jodie said. "People are begging and
I can't even get back to them."

Cannabis Culture's brash business style irks some other dispensary
owners worried that the Emerys' in-your-face promotion style could
turn off Canadians who are on the fence about legalization and the
role of dispensaries within the system.

But Jodie is dismissive of their critics: "They're looking at Cannabis
Culture with a bit of green in their eyes saying you guy are big
corporate cannabis now."

Meanwhile, the Emerys are also feeling squeezed from the publicly
traded licensed producers that they believe are trying to monopolize
marijuana and shut them out of a free market. The Emerys say the
market is big enough for all types of players - especially theirs.

"We've paid our dues. My feeling is if I am not allowed to sell
marijuana after all the work I've done this far, then who does have
that right?" Marc said. "And I don't believe anybody else has that
right over me."
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MAP posted-by: Matt