By Ryan Van Lenning 
(Editor's note: This is the final piece in a six-part series in collaboration with Oakland Local on the business of marijuana.)
Opening any enterprise in an unclear legal and business environment is a difficult proposition. Even more so for cannabis-related efforts. In California, let alone in the rest of the country, a patchwork of regulations make for an ever-shifting and sometimes thorny landscape.
One county may have no limits on dispensaries while the neighboring one prohibits them. Some districts don’t count the number of plants, but strictly regulate the square footage of the dispensary. Similarly, some allow only certain types of products, e.g. plants but not seeds, or both of those but not edibles. Some cities tax cannabis-related businesses, others don’t. Some tax based on square footage (being proposed in Berkeley), others on gross receipts; in Oakland, this went into effect Jan. 1.
Confused yet? You can be sure any budding businessperson better have solid advisors close at hand.
A recent local example illustrates the legal confusion. A father-son team in San Francisco was recently busted by police, who found 70 marijuana plants, two guns and scales in their Sunset District home. They were charged with cultivation of marijuana with intent to sell and the case went to court. However, in early March, a jury acquitted the two when it determined the plants were for personal medical use only. The men had doctor’s recommendations posted on the walls.
One major question is whether those growing and providing medical marijuana to patients in compliance with state law will continue to be prosecuted under federal law. Even in the least restrictive locales, you can’t get around federal policy. The Drug Enforcement Agency still classifies marijuana as a Class I substance, the growing, possession and selling of which carries prison time. The federal agency still conducts raids, even on medical marijuana clinics (like the one in South Lake Tahoe on Obama’s second day after taking office), despite Attorney General Eric Holder’s announcement last October that he was directing the Justice Department to stop such raids on medical marijuana dispensaries operating within state laws.
A more recent case in Colorado has many dispensaries and growers on alert. In February, a man named Chris Bartkowicz was accused of possession with intent to manufacture, distribute or dispense 224 marijuana plants. Bartkowicz could face a fine of $2 million and from five to 40 years in prison.
It’s no wonder people are hesitant to go on record to the media (which, by the way, is how the DEA found out about Bartkowicz in the first place).
“It’s frustrating politically-speaking,” said Somedude (the tech engineer turned cannabis-man from the third part of this series, who preferred to remain anonymous). “There’s a huge groundswell for legalization. But it’s still murky. It’s a strange new beast, legally-speaking,”
The same sentiment seemed to be on the mind of every person contacted for this story. Yet there is no doubt the tone of the discourse statewide and nationally has changed, even in the past couple years.
“The shift has surprised even the activists,” Somedude said.
There are a number of trends that signal the national discourse has moved toward acceptance. Ballot initiatives and legislation decriminalizing medical marijuana are in the works in several states. Recent polls indicate that a clear majority of the public supports medical marijuana. Cities all over California are discussing ordinances, and dispensaries are popping up by the dozens. Cannabis-related retailers are more open about their intended end-use. New medical studies have reported on the benefits of medical marijuana. Public officials have publicly advocated in support of medical marijuana, including legalization for personal use. Even some church officials have come out supporting it, as in a recent op-ed in the San Diego Union-Tribune.
California’s Tax and Regulate Cannabis 2010 initiative is on the November ballot and could likely pass. If it does the floodgates will swing open, and we can expect more of the economic activity discussed in previous parts of this series to proliferate.
“Provided the feds follow along,” Somedude added.
Somedude said he plans to open a cannabis business regardless of what happens in November. He admits that, because things are still in legal limbo, opening a cannabis-related business “could be a dangerous proposal.” He’d like to remain where he lives, a county that has stricter ordinances, but said, “I’ll go where the codes are better.”
Even as the cultural and legal sands shift, expect more people from all walks of life —from smaller players, like Somedude, Green Thumb Consulting and Master Bong, to major players like iGrow, Harborside and Statewide Insurance—to dive in to find their niche in the unfolding cannabis economy. With all the creative entrepreneurs, new taxes, regulations, widespread advertising and even big insurance in the game, it appears the so-called underground pot business is rapidly becoming an aboveground medical marijuana economy.
Posted by Ryan Van Lenning on 04/02/10
(Editor's note: This is the fifth piece in a six-part series in partnership with Oakland Local on the business of marijuana.)
You know a business is becoming an economic force when the insurance folks start knocking at your door. As with any business, cannabis companies must be insured, and Statewide Insurance is leading the way into uncharted territory.
According to its Medical Marijuana Specialty Division, Statewide provides "the only, nationally available insurance coverage designed specifically for the medical marijuana industry." In fact, the division has a staff of about 10 and a dedicated cannabis point person whose role involves talking to industry leaders nationwide. It insures businesses in the 14 states with medical marijuana laws and is poised to enter other states if they legalize medical marijuana.
Though other insurance companies have been known to cover medical marijuana thefts and seizures, these situations arise more on a case-by-case basis. Marijuana plants sometimes are covered under "trees, shrubs, plants and lawns" sections of homeowner's or renter's policies.
Statewide, on the other hand, has policies specifically designed for the plants and the infrastructure they require. This may come as a relief to residents and small business owners whose only other recourse might be to arm themselves to the teeth and pray that their special, and valuable, crop flies under the radar of would-be thieves.
Michael Aberle, national director of the Medical Marijuana Division, said Statewide provides enhanced coverage, but also demands a lot. For example, the company requires enhanced security systems, such as specialized safes and cameras on all doors indoors and out.
“If it’s cannabis-related, we cover it,” Aberle said. “We built programs for this industry. We’re getting involved, we’re out there working with industry leaders and trying to create better business practices.”
Such involvement is raising the bar in safety standards. Because of its requirements, dispensaries are safer: They have better lighting, better all-around security and are less likely to become victims of crime. Aberle said city officials are asking to see Statewide’s underwriting policies so they can draft better ordinances around cannabis businesses.
So what is covered?
Statewide insures everything from property and crop loss and spoilage to cannabis edibles and the kitchens they are baked in. Statewide will cover growers, landlords of properties with grow operations or dispensaries, contractors building hydroponic systems and grow rooms, cyber-info systems and even theft by employees. The company offers workman’s compensation insurance, auto insurance for cannabis delivery services, employment practices liability insurance (EPLI) and doctors’ malpractice insurance.
Statewide even provides event coverage, including for the upcoming International Cannabis and Hemp Expo in April at San Francisco’s Cow Palace, which will be the first event to allow people to medicate on site.
“This is monumental," said Aberle, of the freedom accorded to expo attendees, as well as the scale of the insurance venture, "not just for the cannabis industry, but in terms of insurance coverage.”
Aberle declined to discuss how much medical marijuana insurance is worth to Statewide. But, with hundreds of new dispensaries emerging and annual premiums ranging from $500 to $10,000, it's safe to say that the business of insuring medical cannabis may reach into the millions.
See the rest of Oakland Local's series on the business of medical marijuana here. And check back tomorrow for the final installation of the series on the shifting sands and legal risks of taking part in the budding business.
Posted by Ryan Van Lenning on 04/02/10
(Editor's note: This is the fourth piece in a six-part series on Oakland Local on the business of marijuana.)
Not everybody breaking into the marijuana industry wants to grow plants or run a dispensary. In fact, entrepreneurs of all stripes are launching new efforts to cash in on the budding popularity of the cannabis business.
Head shops may be the most common endeavor that comes to mind in this arena. Retailers who sell pipes, bongs and other paraphernalia have always been a mainstay of marijuana culture. Yet, as it turns out, that is much too narrow a lens through which to survey the cannabis economy.
Yes, novelty shops, such as the Oaksterdam Gift Shop in downtown Oakland, that sell bud-heavy t-shirts and cups are popping up in storefronts and on the internet. Earlier in the series, we saw how mega-stores like iGrow are capturing the Home Depot-for-cannabis growers’ market. Yet other ventures are smaller in scale, like one young Oakland resident who created a marijuana-flavored artisan ice cream. He started doing it just for fun to bring to parties. Now he sells the treat in batches. Edibles may not be big business—they tend to be one-to-three person operations—but it is solid business.
“Master Bong,” also known as the “MacGyver of Pot,” is cultivating an internet-based business model related to research and supplies. He attended Oaksterdam University in 2008 and compared the current bud business boom to the California Gold Rush.
“All the money was made by the people who provided the equipment, food and supplies,” he said, of those who kept all the starry-eyed gold diggers well stocked. A few lucky seekers did strike gold, but most didn’t, and the people who provided services made a steady income. Master Bong hosts a site he said is “all about the information.” He links to products and when customers buy them, he gets a percentage of the profits based on the number of clicks from his site. Meanwhile, viewers learn via tutorial videos on topics from cooking to smoking devices. He said he expects to scale up tremendously in 2010.
In an economic environment in which one third of building trade workers are unemployed, the market signal that legalization is on the horizon might be welcome. Many, if not most, grow operators install their own lights, fans and other systems, and do the wiring themselves. However, as more people get into the business, and want a jumpstart on growing, professional services are increasingly in demand to build safe and to code.
Some contractors already specialize in lighting, ventilation and electrical systems for cannabis growing, such as Oakland-based Green Thumb Consulting. The business helps clients design, troubleshoot, or install a range of systems, from low-tech, low-budget operations to high-tech, high-security.
Co-owner Evan Rotman, who is a chef by training, said he has been a medical cannabis enthusiast for many years and saw the need for professional consulting services. His business partner KC Clausen has a background in boat building and general construction.
"We're pretty out front about it. We specialize in cannabis gardening consulting, both indoor and outdoor," Rotman said.
Starting in October of last year, Rotman said work has been steady.
"So far, most of our work so far has been trouble-shooting systems people have put in themselves. We go and check out and make recommendations," Rotman said. "But as medical cannabis becomes much more main-streamed, it's going to be important to make sure grow room and gardens are up to code."
He expects a massive increase in demand if the Tax and Regulate cannabis initiative passes in November, after which he expects his business will expand throughout California.
"The market will open wide up and we're poised for success," Rotman said.
Others companies, such as Walnut Creek-based Good Green Building, are general contractors. Good Green Building bills itself as a “first of its kind general contracting company that specializes in the construction of indoor hydroponic grow rooms” for fruits and vegetables. It also counts as a percentage of its clients those who intend to grow cannabis.
The use of such professional services might cut down on the number of fires that result from faulty wiring. Such stories make the news periodically, such as the last December’s fire in a closed Chinese cookie bakery in Oakland’s Chinatown.
There are also the harder-to-measure indirect economic impacts, such as increased spending in nearby restaurants, cafes and retail stores. The blocks around Oaksterdam in downtown Oakland have seen increased foot traffic. Next door to the program, owners at Jimmy’s Deli said they have been able to open for an extra day on the weekends because of the demand for a quick, inexpensive meal.
The final ripple effect of the “canna-biz boom” might be good news for the city of Oakland and other cities considering similar measures at the very least in terms of revenue. Measure F, Oakland’s Cannabis Business Tax law, was approved overwhelmingly by voters last summer. It created a specific category and levies $18 per $1,000 in gross receipts for all cannabis businesses in the city. Both Harborside and Oaksterdam were advocates for Measure F and testified on its value as a revenue generator to other city’s officials who are considering similar measures.
“We expect to pay around $350,000 in 2010, and in all likelihood the city will see a total of at least twice that amount, maybe up to $1 million,” said Steve DeAngelo, founder of Harborside Health Center.
That’s no chump change coming from a handful of businesses in a city facing a multi-million dollar budget shortfall this year.
Posted by Ryan Van Lenning on 03/31/10
(Editor's note: This is the third piece in a six-part series on Oakland Local on the business of marijuana. This series was funded by the Spot.Us community.)
In the current economy, financial incentives alone are sufficiently enticing to make many people consider a career change. Though the initial cost of indoor lamps, wiring, fertilizer, soil and fans can add up, start-up costs pale in comparison with most small businesses. Depending on the size of the operation, growers can spend several hundred to several thousand dollars to create suitable conditions for healthy plants. Once operational, however, it costs as little as a couple hundred dollars per pound of premium product.
Do the math, and you'll see how fast the investment can pay for itself. Imagine that a single plant yields one to two pounds of dry buds, and each pound can be split into 16 ounces or 128 eighths. A pound sells for $1,500 to $3,500, and an eighth goes for $20 to $50, depending on the area, origin and quality. (Sellers net more money for "kind bud" or "chronic," slang for higher quality marijuana.) A single plant can be worth thousands of dollars.
There are few enterprises that promise such a high profit margin for so little work. That’s not to say there isn’t an art and science to growing high quality, healthy plants. But, all things considered, entry points into the field may be easier than into many others. For the unemployed or underemployed, one can send out only so many unanswered resumes before the notion of becoming a “potrepreneur” begins to look attractive. Even to the highly employable and skilled, getting in on the new boom is an alluring prospect.
Somedude (who preferred to remain anonymous) is one such businessman who saw the writing on the market wall. Somedude is a tech engineer and consultant, massage therapy student, husband and father. He is also a student who is about half-way through the 13-week horticulture course at Oaksterdam University.
“Until last August it [cannabis] really wasn’t a big part of my life,” Somedude said. He began to trade massages for marijuana, then started to see the changing landscape of the cannabis industry. “It’s cool to understand how to do this legally."
His last assignment at Oaksterdam? Design a cannabis grow room. The knowledge and skills he gained in Oakland have given him, and many others, hands-on experience. Somedude is already exploring his business options. Immediately after the horticulture course, he said he intends to enroll in the follow-up course, which focuses on the business-side of the cannabis industry.
“The economy is not turning around fast enough, so I'm looking at a path to a state-legit medical canna-biz opportunity," he said. "I'm complying with the state attorney general's--soon to be governor's--guidelines.”
In addition to economics, more personal factors motivated Somedude to enroll at Oaksterdam. A close family member who has multiple sclerosis uses a combination of massage, creams and medical cannabis to treat symptoms. (Recent medical research has confirmed the medical value of cannabis for multiple sclerosis patients, finding it likely to help protect from further nerve damage.)
Somedude also referenced a neighbor--“a soccer mom with two kids”--who has struggled with two bouts of cancer, and only recently came to see medical marijuana as possible therapy.
“There’s a certain amount of trust-building needed in order to see cannabis as a different way of therapy,” Somedude said, adding that he believes many others could benefit in the same way. “I was seeing how much cannabis helps relieve pain when coupled with massage and other healing modalities. I’m wishing to learn new, healthy ways to help others in pain.”
Somedude is already setting things up for his business, cultivating plants, drawing up business plans, talking with lawyers and learning as much as he can about the changing landscape. He has considered running his business as a “scheduled delivery system,” where he would drop off medical cannabis weekly at his clients' homes.
He has also considered the possibility of a dispensary collective. But costs would be much higher than for an independent entrepreneur. In addition to the above costs, business owners must add on employee insurance and payroll taxes, property insurance (more below), security, retail space and advertising, among other expenses.
For Somedude, location may decide what type of business model he adopts. He said that where he lives, in Silicon Valley, is one of the more restrictive regions.
“For example, you can’t have edibles," he said. "Everyone’s in jail or been chased out.”
Somedude spoke glowingly of Oaksterdam University and the people he has met in the program. He said he has seen underground gangs trying to go legit, grandfathers and grandmas going into business, and many others with smaller ambitions who want to find new skills to pay rent.
“The networking there has been worth it by itself,” said Somedude. “Everybody is dedicated and passionate, not just a bunch of college stoner flakes. Oaksterdam is a whole industry unto itself.”
Miss parts one and two? Check out the story updates on the pitch.
Posted by Ryan Van Lenning on 03/30/10
(Editor's note: This is the second piece in a six-part series in partnership with Oakland Local on the business of marijuana. Miss part one? Check the main pitch page for story updates )
After just two years, Oaksterdam University is an institutional heavy-weight, drawing hundreds of students from all over the United States to learn to cultivate marijuana and legally sell the plants. Forty-seven-year-old entrepreneur and Oaksterdam founder Richard Lee started the school after seeing the need for a disciplined, academic approach to cannabis cultivation, and also cannabis law and business. And in the process he wanted to legitimize the marijuana industry.
"This isn't your older brother growing a plant in the garage," said Oaksterdam spokesperson Greg Grimala. "This is a legitimate industry like any other. Everyone here is an entrepreneur."
Oaksterdam's main campus—which keeps expanding--is in downtown Oakland, but it also has campuses in Los Angeles, Sebastopol, and Flint, MI. Hundreds of students take the semester-long course, and many more have taken Oaksterdam's one-day or weekend classes. With an ad like this, announcing $50,000 to $100,000 careers for being a freedom fighter in the cannabis industry, it's no wonder the trade school is at capacity and often has wait-lists to matriculate.
Partly because of the overwhelming demand for education about marijuana, Oaksterdam outgrew its former location just down the street. Its new location, at 1600 Broadway, was once a middle school. It now houses large classrooms, a grow lab, an auditorium, a student union and, of course, a crop of clones and starter plants, which are used as part of the curriculum.
January's grand opening and ribbon-cutting was well attended by students, entrepreneurs and city officials alike, including Councilmember-at-large Rebecca Kaplan, who has been an outspoken supporter of Oaksterdam and an advocate for cannabis industry regulation, better zoning and legalization.
I also sat in on a class led by none other than Ed Rosenthal, the author of numerous cannabis books such as The Big Book of Buds and The Marijuana Grower’s Handbook. Rosenthal has been called the “Ganja Guru” because of his vast experience and knowledge of all things cannabis. At one time he faced 100 years in prison and $4.5 million in fines as a result of his research.
Rosenthal's course was on marijuana growing conditions. It was just one part of a 13-week horticulture class where students learn about everything from nutrients and soil quality to types of lighting and ventilation systems. After giving a broad view of the art and science of cultivation, Rosenthal demonstrated cutting branches from a mother plant, which is used to start baby cannabis clones.
Looking around the classroom I noticed a diverse set of students. Grimala confirmed this when he said Oaksterdam appeals to everybody from from out-of-work 30-year olds, soccer moms, blue collar workers and professional business people. And some 6,000 students have gone through Oaksterdam's programs.
Students who complete the 13-week semester program receive certification. While not a city- or state-recognized certificate, it carries weight among those entering cannabis-related industries such as dispensaries.
Topics taught at Oaksterdam include state and federal law, extracts, cooking, legal rights, politics and history, cannabis economics, dispensary operations, cannabis science and patient relations. Some students opt to attend a handful of stand-alone seminars rather than the semester program. For $650 for the semester course or $250 per weekend seminar, students gain hands-on skills and knowledge in classes taught by some of the top figures in the industry.
Some students will go on to open their own medical marijuana dispensaries in jurisdictions that allow it. Others are looking for different business models and want to learn more about the trade.
Schools are popping up around the nation that seem to take inspiration from Oaksterdam's success. For example, the Cannabis Career Institute offers a curriculum that covers medical cannabis business, law, cultivation, edibles, and holds seminars in Los Angeles, Fresno, Sacramento and Denver, CO.
Spokesman Grimala also acknowledged that there are a lot of copy-cats, but that the proliferation utlimately will be good for legitimizing the industry and having more qualified people in cultivation and business.
And big business it is. Apart from being an educational heavy-weight that's used as a model for other programs, Oaksterdam holds financial and political clout. The Better Business Bureau gives Oaksterdam its highest rating of "A+." It's a big employer too, with over 50 people on staff. That also means payroll taxes, on the order of over half a million a year.
Oaksterdam University is also the headquarters for the Tax & Regulate Cannabis 2010 campaign, on which it has spent $1 million and which just recently qualified for the November ballot. Campaigners collected more than 700,000 signatures in a matter of months. If approved by California voters, the act would regulate cannabis like alcohol by allowing adults 21 and older to possess up to one ounce of cannabis and give local governments the ability to tax and regulate its sale.
Posted by Ryan Van Lenning on 03/29/10
This will be the first in a six part series on the business of pot that is being produced by Oakland Local and funded by Spot.Us.
You can see the piece at Oakland Local here.
Monday: Find out about Oaksterdam University and why it is setting the standard for training programs round the state.
Want some weed? Mapping the Business of Pot in Oakland
Now that the tax and regulate cannabis initiative is officially on the November ballot, California may become the first state in the nation to legalize the recreational use of marijuana by adults. In Oakland and other parts of Northern California, pot is already widely accessible, fueled by an explosion of medical marijuana dispensaries and a grey-market growing system that means medical marijuana and related businesses are booming. Marijuana medical dispensaries such as Harborside Health Center and schools such as Oaksterdam University are not only bringing in a wide base of customers, they’re creating the models for others to follow in the growing cannabis economy.
Oakland is considered the epicenter of the regulated cannabis industry movement. A well-regulated but permissive climate has allowed the emergence of several major cannabis institutions in the city—Harborside Health Clinic, Oaksterdam University, and the new iGrow superstore. The 4 medical marijuana dispensaries and the city ordinances regulating them have been held up by advocates as models of how to do it right (as opposed to Richmond or San Jose, CA, where some fear a lack of regulation is leading to too many dispensaries opening at once).
Oakland Local’s six-part series will take a look at some of the businesses and entrepreneurs fueling the pot economy in Oakland. We’ll start with the a look at the dispensaries in Oakland that are the core of this new form of green business. On Monday, we'll examine Oaksterdam University, where students enroll to become certified to become growers and dispensary managers. Next, we’ll share an interview with a Bay area tech guy who’s gone back to school with the dream of scrapping the programming biz and opening a medical marijuana dispensary instead. Finally, we’ll explore the ripple effects making their way across the landscape of the cannabis economy.
(Click for Slideshow)
1. Pot for Sale: Medical Cannabis Dispensaries Flourish in Oakland
Harborside Health Center, a non-profit medical marijuana collective and health services provider, is the largest dispensary in Oakland, both in terms of revenue and physical space.
Harborside has become a major institutional force in the medical marijuana scene. One of four licensed dispensaries in Oakland, the center brought in over $20 million in past years and employs 75 full-time people (with benefits). In addition to its full-time employees, Harborside also hires a handful of part-time health providers as contractors.
Regardless of one’s views on medical marijuana, a visit to the Harborside clinic demonstrates that the facility is bright, clean, safe and well-run. And it’s really busy. I arrived early on a Friday morning and discovered a line of eager people already waiting to enter to purchase their medical marijuana.
Inside the spacious dispensary, a few “budtenders” stood behind lighted cases that featured several strains of cannabis, hash, and extracts, including some with exotic-sounding names such as White Kush, Shiva, Blueberry Soda, Lavendar ATF, Purple Urkel, and perhaps the most peculiar-sounding, Schnozberry. Vials of each blend were labeled with their percentage levels of THC, the main chemical compound in cannabis.
I took a tour of the facility, which included a showroom for vendors to sell their product and an entry room where new members receive introductory walk-through of policies and services. Across from the cannabis counter was an area dedicated to cannabis clones (plant cuttings) that were for sale.
In the lobby, several receptionists were busy answering phones and helping customers. A stack of binders lay neatly to one side on a counter next to forms where members can sign up for any of the several services, including massage therapy, acupuncture, reiki, hypnotherapy, and aromatherapy that are available on site--all free of charge for members. I was shown a therapy room complete with massage table and candles that was no different than what you’d see at any nice spa.
In the corner of the lobby was an area deemed the Patient Activist Resources Center, where members can volunteer for a couple hours of work on various social and cannabis movement issues and receive a weekly gift in return. Low-income clients can receive a “care package” if they show proof of financial hardship.
It was hard to reconcile the busy scene and the fact that over 500 people a day visit with the reality that Harborside has seen a drop in sales the last two quarters.
“Our sales have dropped 15% since August,” said Steve DeAngelo, one of the managers. Is this due to the recession? According to DeAngela, the issue is increased competition and more supply, not lack of money due to an economic downturn.
Dozens of dispensaries have opened in the wider Bay Area since last summer. Six have opened in Richmond (for a total of 8), one in south Berkeley (for a total of three), one in Walnut Creek (closed by court order last week, based on zoning issues), one in Alameda, two in Hayward (though the city council has voted no to any more), one in Martinez, several in Marin County. San Jose has over 30 medical marijuana dispensaries.
This expansion is what has cut into Harborside’s sales. “As patients have options closer to home, less make the trek to Oakland. One would expect that our sales would drop further as more dispensaries open close to us. After all, there is a finite amount of cannabis being purchased by patients. You can cut that pie into ten, or twenty, or two hundred slices—but that will not increase the size of the pie. Each piece will just be smaller,” says DeAngelo. “In our case, we will have to continue to cover our fixed costs--rent, insurance, utilities. So if our sales continue to drop, I will have no choice but to cut patient services—our testing program, or our holistic care clinic, or our care package program.”
Despite this recent slight dip in sales, DeAngelo estimates the collective will bring in about $18.5 million in gross receipts in 2010. Harborside has also been identified as model of how to do it right--provide good customer service and high quality product in a safe and friendly environment, and management is proud that other cities look to dispensaries like Harborside for models of how to do it right.
Two smaller scale dispensaries, or cannabis clubs, with different vibes in Oakland are Blue Sky Café and the Oakland Patient Center, both near downtown Oakland. Blue Sky, owned by Oaksterdam University founder Richard Lee, offers 3-4 varieties of cannabis presented in binders rather than cases. Prices are slightly less than Harborside. They also sell popular cannabis edibles including pies, brownies, and salad dressing, and of course, coffee. Another popular local medical marijuana club in Oakland is Purple Heart Patient Center near Jack London Square, which carries between ten and twenty strains and also sells clones.
iGrow Hydroponics Superstore
If you are looking not to buy medical cannabis, but want to grow your own bud for personal use or for selling it to a collective, iGrow superstore in East Oakland is the place to shop. Billing itself as a one-stop-shop for cannabis growing needs, iGrow is housed in a 10,000 square-foot warehouse on Hegenberger Loop near the airport.
iGrow sells everything from fans and grow lights to nutrients and whole hydroponic grow systems. Even a giant bud-trimmer was displayed prominently toward the entrance. Just a couple years ago such a business wasn’t possible. Major suppliers wouldn’t put their product in a place so open about being specifically for cannabis cultivation. General Manager Justin Jurgensen said that vendors have been arriving nearly every other day to get their products on iGrow’s shelves. Some vendors are setting up whole displays on the warehouse floor.
“We don’t so much want to be the Wal-mart of cannabis growing,” Jurgensen said, referring to the SF Chronicle’s headline referring to iGrow as the ‘Wal-mart of Weed’, “but we do want to become the Home Depot.”
“That is, we want to be the place where people can get what they’re looking for, a competent staff, good customer service, a return policy, and so on.”
To accomplish that mission, iGrow has a 'Grow Squad', staff who are knowledeable about cultivation techniques and grow room operations that provide consultation to customers.
While it is too early to tell how the business is doing, the fact that vendors are calling and customers are buying products and services is a signal that it might do well its first year.
And having the official support of many in city government doesn't hurt. Several elected officials showed up to the Grand Opening at the end of January. City council members Ignacio de La Fuentes, Desley Brookes, Pat Kernighan, and Rebecca Kaplan all offered their congratulations to iGrow and founder Dhar Mann.
Customers are also signing up for iGrow’s classes in cultivating marijuana on everything from the History of Hemp to cultivation techniques. iGrow conducted its first introductory classes the Friday of their second week in business. Seventy students came. These classes are free and answer basic questions such as “What is hydroponics?” and “What are the basic lighting and venting systems?”
Higher-level courses in what is called the University of Cannabis costing around $50 will soon be added on topics ranging from how to make edibles to the business and legal aspects of the cannabis industry.
When asked about the need for education, Jergensen said, “Oaksterdam set the stage.” Whereas Oaksterdam has classroom course only, IGrow’s University of Cannabis plans to offer several online courses.
It seems that the medicinal marijuana landscape is constantly shifting in California as it is everywhere else. As one advocate and soon-to-be pot biz entrepreneur told me, "every region and county has a different way of looking at it." One of the many issues facing city and county officials is how many dispensaries should be allowed, where they should be located, and how they should be taxed or regulated.
Hayward this week answered the first question with a loud "none," after voting against allowing any dispensaries in the city. Los Angeles is cracking down and looking to close hundreds of dispensaries. And Walnut Creek's C3 Collective, the city's first non-profit storefront dispensary, has been ordered by a judge to close by March 23, citing city zoning violations. Moritoriums for opening new dispensaries are in effect in several cities with more in the works. Expect legal battles to follow.
Closer to home, Berkeley is weighing in on how to tax dispensaries within city limits, in order to help cover a $12 million budget gap. However, Berkeley would tax dispendaries based on physical size, unlike Oakland, where the tax is based on sales and was approved by proposition last year. This has caused resistance from dispensary owners, which is also unlike Oakland, where dispensaries largely supported and pushed for the cannabis biz tax. As a result, an amendment is being considered that would tax initially based on revenue, then on size ($10/sq. foot) down the road should the dispensary become a non-profit.
And in other news, Avery Badenhop of Petaluma, a supplier of dispensaries in Oakland, Berkeley, and San Francisco, has a federal forfeiture complaint against him, after police found some $800,000 after pulling him over for speeding in Marin. According to his wife, Badenhop was raking in over $15,000 a month in his role as grower and delivery man.
And the Sacramento Bee launched its "Weed Wars" blog by Peter Hecht on March 1.
Posted by Ryan Van Lenning on 03/12/10
If you don't have anything better to do this Friday night or you get home early you might want to catch the Bay Area Premiere of Cannabis Planet TV. Based out of L.A., the show features cultivation tips, cooking demos, and cannabis news and information. It is entering its second season and will be expanding to other regions as well.
The fact that there is a show dedicated to cannabis with paid advertisers indicates just how far the topic has moved away from the fringes. Well, a midnight booking isn't necessarily center stage, but it does demonstrate it is on its way towards the cultural mainstream.
Check it out at midnight on KOFY TV 20-Cable Channel 13. Here's the SF Chronicle article.
Posted by Ryan Van Lenning on 02/18/10High Times 1st Annual Medical Cannabis Cup is coming to San Francisco June 19-20.
Prizes will be given for the best and most medicinal cannabis, hashish and edibles from California's legal medical marijuana dispensaries. It will be part of a two-day medical marijuana and hemp expo that will include cultivation seminars, activism sessions, and how-to seminars on opening and operating legal cannabis businesses.
Posted by Ryan Van Lenning on 02/13/10
There has been a lot of medical marijuana news lately, both at the state and local levels. One of the more interesting developments in Oakland is the opening of a 1-stop-shop for cannabis grow systems in East Oakland, near the airport. Like most things American, the cannabis biz is super-sizing, and owner Dahr Mann wants his store iGrow to be the one of the leading mega-stores. It bills itself as "the Bay Area’s largest full service hydroponic superstore" and has already been dubbed the "Wal-mart of Weed" by some.
The 15,000 sq. foot warehouse will sell everything for cannabis production and harvesting except the seeds or plants themselves--lighting systems, heating & cooling systems, containers, soil, nutrients, and fans. In addition to grow products for sale, iGrow will provide services such as full-service installation and even online classes. If you've ever read those periodic reports about house or building fires (like the one in Oakland's Chinatown recently), you will know that faulty wiring or unsafe installation of lamps can get out of control. A qualified staff (called the "GrowSquad") will help with professional installation of grow systems and offer cultivation advice. Qualified customers can even get a recommendation for a medical cannabis card with an on-site doctor.
Even Larry Reid, Oakland Councilmember representing that area, was supportive of the new store in his district. "It's going to create new job opportunities for residents,"While I wasn't able to attend the grand opening of iGrow, I will be meeting with Mr. Mann soon to discuss the economic and job side of the business and to take a tour the store.
Posted by Ryan Van Lenning on 02/10/10Oaksterdam University held its Grand Opening in their new space in downtown Oakland. I went to the ribbon-cutting ceremony out front where founder Richard Lee, "ganja guru" Ed Rosenthal, and even city councilmember Rebecca Kaplan were there to celebrate and praise the economic virtues of the enterprise.
In addition to raising money for the city from taxes on cannabis businesses, local dowtown shops have seen an increase in sales because of the increase in foot-traffic these cannabis-related businesses have spurred. At least that is the claim, one that I'm going to look into.
Enrollment in OU classes is way up and tons of people see the writing on the (economic and legal) wall. But people are attending classes for a wide range of reasons and even they no doubt make up a small percentage of folks who will be getting in on the new sector.
More to come with the full report.
More on the Oaksterdam University opening from the SF Chronicle and Sphere.
Posted by Ryan Van Lenning on 01/13/10Oakland police are looking for the growers of at least 1,000 marijuana plants found after a small fire at a one-time Oakland fortune cookie factory.
Sgt. Rich Vierra says the pot plants, valued at about $500,000, were not burned during Monday's fire in the former Kar Mee Fortune Cookie Factory in Oakland's Chinatown district.
Police say the plants ranged in size from seedlings to 4 feet tall and were being grown in about 1,750 square feet of space.
Advocates of theTax & Regulate Cannabis 2010 Campaign have announced that they have gathered enough signatures to place it on the November ballot. They will be submitting the more than 650,000 to the Secretary of State next month. I spoke with Greg Grimala, a spokesperson at Oaksterdam/OD Media, who said they had reached their goal of the necessary 434,000 by Thanksgiving but wanted to collect more than enough signatures to ensure it was placed on the ballot.
If passed next year, it would local governments to tax and regulate, allow people 21 and older to grow marijuana for personal use and to possess up to an ounce. And since it would also allow licensed suppliers to grow and sell marijuana (up to an ounce at a time) to adults, this means that more people will be sharpening their cannabis entrepreneurial skills.
It highlights the importance of a local story like this.
Posted by Ryan Van Lenning on 12/16/09
