Pubdate: Tue, 23 Jan 2018
Source: San Francisco Chronicle (CA)
Copyright: 2018 Hearst Communications Inc.
Author: Otis R. Taylor Jr.


As a teen in the '70s, Alexis Bronson sold joints to his Berkeley High
School classmates in front of the school cafeteria.

Bronson lived in hotels with his father and two brothers and made
enough money selling weed to eat and to buy clothes. He figured he
could probably make enough to keep a roof over his head, too.

In 1980, two years after he graduated from high school, Bronson began
cultivating cannabis, planting the seeds for his future business.
After California voters passed Proposition 215 to legalize marijuana
for medicinal use in 1996, Bronson began selling his cannabis flowers
to a dispensary in San Francisco.

He also sold to street dealers.

"I wasn't out on the streets selling," Bronson said. "I knew the
streets, but I wasn't hard like that. I was poor, but I wasn't
street-hardened. It just wasn't my thing."

For almost four decades, Bronson, 57, ran very successful businesses,
eventually settling on selling clones and seeds through his company,
Medicinal Organic.

At the height of his business, he was selling about 4,500 clones per
month out of an East Oakland warehouse, earning more than $30,000 a

But now that the state has imposed strict marijuana regulations on
everything from growing to packaging to selling, Bronson finds himself
in the cold. And his business has shriveled.

He is waiting to move his business into proper, city-approved spaces
for cannabis cultivation. He already has received four local permits -
for delivery, indoor cultivation, outdoor cultivation and distribution
- - and a state license for cultivation. He also has a state license for
a microbusiness, a category that allows small businesses to apply for
more than one license with a single application.

He's hoping, also, to get a dispensary permit from Oakland so he can
open a retail store to sell his products.

Without his own retail store, he's unsure his business can survive -
even with the extra help he got from Oakland's equity program, which
waived $12,500 worth of application fees.

Oakland's attempt at equity has been commendable, but it's not enough.
The little guy is still getting squeezed out of business.

Because even if they get their local permits, they have to pay $1,000
for each application they submit to the state. And then they'll have
to pay to receive the annual state license.

That's a $5,000 licensing fee for each license.


Bronson, for example, needs five state licenses to build the business
he wants to run: a full seed-to-shelf operation that grows the
products he sells to customers who walk in or order a delivery.

Sure, the cannabis industry is expanding, but if small businesses
can't get off the ground, they'll be swallowed by large companies with
the money to pay state fees.

"There's no other industry that charges the kind of money that they
do," Bronson said. "There's just outrageous fees. The bootstrapping
days are over. You have to pay."

Right now, Bronson is only generating income from his seed sales, he
told me.

That's because his top clone buyer, Harborside, a cannabis dispensary,
discontinued its relationship with him in December. Because of new
state regulations, dispensaries can sell only six clones per person
per day. Before Jan. 1, the limit was 99.

According to Andrew DeAngelo, Harborside's director of operations, the
dispensary has a contract "to take a certain amount of clones from
Dark Heart," a cannabis nursery. That contract expires at the end of
next month, he said.

"With the new regulations, my volume of clone sales has been reduced
by about 80 percent," DeAngelo told me. "My average clone sale before
(Jan. 1) was well over 50 clones per sale. Regulations change business
models. Regulations change my ability to buy from a wide variety of
people if the regulations constrain my sales.

"I should still be selling all these clones. I should be able to buy
from a multitude of vendors, but I can't. Because I can't sell them."

DeAngelo expects to eventually have more clone vendors on Harborside's
shelves in the spring, but Bronson, who has primarily sold his clones
at the dispensary since it opened in 2006, might not be ready to
reclaim his spot.

He can no longer run his clone business out of his garage in East
Oakland where he's been cultivating for the past two years after a new
warehouse owner evicted him.

Because of the equity program, he's secured two spaces to operate
legally - one for seeds and one for clones. Now he's waiting for the
spaces to open so he can move in and get to work. At one, he's
awaiting the city building department's approval of a greenhouse. At
the other, the construction of the space probably won't be completed
for another three months.

"I've got to get a place soon," Bronson said. "To grow the business,
I've got to start producing product. My seeds are helping out
tremendously. Basically, if it wasn't for my seeds, I wouldn't be in

The hard truth of the new cannabis environment is that there's only so
much room for small, boutique businesses.

"All the dispensaries are trying to do their own farms and grow their
own medicine, because that's the only way they're going to be able to
wring out profit," Bronson said.
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