Local Cannabis Market: 'Hot Mess' Or 'Tremendous Opportunity'?

Pasadena will have ‘huge impact’ on the industry, says cannabis panelist

Published : Friday, May 31, 2019 | 4:39 AM

The Pasadena and Foothill chapter of the American Institute of Architects convened a panel comprised of consultant Christian Nitu, Realtor Chris Bonbright, Electrical Engineer Celestin Hariton, and Moderator Mark Gangi.

[Updated] Depending on your perspective, California’s retail cannabis scene is either a “hot mess” or a tremendous opportunity, according to a panel of local experts Thursday.

And, said one expert, “Pasadena will have a huge impact on the industry.”

As the City recently completed its final round of interviews of 128 applications were submitted of which 122 applications were submitted for retail licenses, three for testing laboratories licenses and three for the cultivator licenses — with results to be announced in June — a panel of experts and consultants described the multi-faceted challenges and opportunities that cannabis retailers and city leaders will face this year.

The panel — consultant Christian Nitu, Realtor Chris Bonbright, Electrical Engineer Celestin Hariton, and Moderator Mark Gangi — was assembled by the Pasadena and Foothill chapter of the American Institute of Architects, for a forum called, “Cannabis Dispensaries and the Community.”

Nitu, who represents Coastal, a Santa Barbara-based dispensary, said that while California has legalized recreational and medicinal cannabis, “Cities have the last say.” Thus, like Pasadena, cities are creating their own local ordinances to regulate the legal but troublesome industry.

“California has 656 legal shops, where there used to be 6,000 shops, both legal and illegal,” said Nitu, who labeled the situation “a hot mess.”

‘We’re still in the crawling phase,” Nitu added.

But Pasadena could also be in for a revenue surge, said Nitu, as so far, the state of Washington has pulled in $313 million in new revenue, California has earned $300 million, and Colorado has earned $266 million, for a total of $500 million.

In fact, the city of Aurora, Colorado has begun to build new affordable housing units from its “weed tax” revenues.

But in California cities, the picture is not so cut and dried.

According to realtor Bonbright, there are 168 legal shops in Los Angeles, for example. But the increasing number of illegal shops are, in many cases, being left alone.

“The police have bigger fish to fry,” said Bonbright, who has worked with cannabis dealers to acquire store locations in West Hollywood.

The situation has become so complicated for legal dealers that, according to Bonbright, many are wondering “why they voted for Prop 64,” the measure that legalized cannabis sales.

On a different front, engineer Hariton noted the lengths to which some remaining illegal dealers go to in order to remain in business while confronting the ramp-up of legalized dealers: some are tying into power circuits that don’t have enough power to support the shops, resulting in blown transformers. Others, who find their utilities shut off, simply buy generators to get around the problem, while a small number finding themselves going back “underground.”

According to Bonbright, licensed dealers face a maze of obstacles in every city as they try to establish their businesses.

Real estate is one of the most challenging and difficult aspects of the industry, he said. “There is a stigma to leasing to cannabis dealers,” he added.

Bonbright also noted that in many cases, federally-insured banks who hold mortgages on the leased cannabis properties will immediately call in their loans, once they find it is being leased to a cannabis dealer. Additionally, any debts on the property need to be paid off immediately.

Bonbright—who said that in his nearly 30 years of real estate work, nothing has been as challenging as working with cannabis dispensaries—also admitted, “I would not lease to a cannabis dispensary.”

As Nitu told the audience, “Control your destiny. Own your own property.”

But Nitu also said that well-run cannabis stores would improve the retail picture for many communities.

“New players are bringing in high-quality people, stores and money,” he said. “Their goal is to keep the quality,” Nitu added.

Bonbright also pointed out that the increasing popularity of CBD oil has created a new market for cannabis and attracted a whole new customer.

“The fastest growing new markets for cannabis are women and Baby Boomers,” he said.

Nitu also noted that Pasadena “has done a great job of establishing a framework for the new stores.” But both Nitu and Bonbright both railed against illegal shops.

“Cannabis shops can deliver fruitful retail, but it is absolutely unfair to continue to allow illegal shops to operate” said Nitu.

“It’s so unfair to the market,” added Bonbright.

 

 

blog comments powered by Disqus