Pot in California

Dispensary seeks to enter recreational pot market, but county says no

CannaCanHelp, medical marijuana business, provides cannabis products in Tulare County

CannaCanHelp, a medical marijuana business in Goshen, California is seeking to expand into recreational marijuana. Wes Hardin, CannaCanHelp operations manager, talks about providing those who qualify with quality cannabis products.
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CannaCanHelp, a medical marijuana business in Goshen, California is seeking to expand into recreational marijuana. Wes Hardin, CannaCanHelp operations manager, talks about providing those who qualify with quality cannabis products.

Last year, the CannaCanHelp medical marijuana dispensary, located in an industrial building off the beaten track, booked $5.5 million in sales.

That’s $15,000 a day.

Now the company wants to branch into recreational marijuana in the wake of last year’s passage of Proposition 64, which legalized recreational use of marijuana by adults in California.

But taking advantage of the business opportunity in conservative Tulare County is proving difficult for the company.

Citing local control, Tulare County quickly banned commercial growing of nonmedical marijuana for two years. County supervisors said they will watch how others handle the recreational marijuana issue before deciding what to do.

For Wes Hardin, operations manager at CannaCanHelp, the county’s stance is frustrating.

“We want to compete in the industry any way we can,” he said. “We see a bright future.”

Besides, the county potentially would miss out on millions of dollars in tax revenues, he said.

We want to compete in the industry any way we can. We see a bright future.

Wes Hardin, CannaCanHelp

Hardin has become the face of the marijuana industry in Tulare County. When pot is on an agenda, he routinely speaks out at supervisors’ and city council meetings.

Marijuana businesses like his are fighting “a lot of ideology” and “the old-school mindset,” he said.

“We always climb steep hills,” Hardin said. “They look at us as the fringe of farming. I see us as the future of farming.”

But Tulare County Supervisor Mike Ennis notes a majority of the county’s voters said no to Proposition 64.

“I think they spoke when 55 percent of them said we don’t want it legalized in Tulare County,” he said.

Tulare, Fresno, Kings and Madera counties all have bans on marijuana businesses, but county jurisdictions only apply in unincorporated areas. Cities can set their own policies under Proposition 64.

In the four-county region, only Coalinga has expressed an interest in allowing a medical and recreational marijuana dispensary and marijuana-related enterprises.

Hanford, with an eye on tax revenues, has expressed interest in welcoming a business that would grow marijuana in the former Pirelli Tire plant, but the council has been firmly against allowing a dispensary in the city.

Last week, the Visalia City Council voted to wait six months before making a decision about recreational marijuana businesses.

The police department warned the council that homelessness increased in Pueblo, Colo., when that state legalized marijuana.

Visalia Mayor Warren Gubler said he is reluctant to say yes to recreational marijuana businesses.

“I think it’s a public safety issue,” he said. “Marijuana is still a drug. It’s a gateway drug.”

The various bans by counties and cities in the region apply to businesses such as dispensaries and growing marijuana. It’s perfectly legal under Proposition 64 to grow six plants at a home as long as it’s indoors or in a backyard greenhouse.

Still, marijuana remains illegal under federal law.

The federal government has largely taken a hands-off approach to medical marijuana, and White House spokesman Sean Spicer said Thursday that the president is sympathetic to those who use it for pain relief in cases of terminal disease.

But Spicer also said he expects the Department of Justice will take a look at recreational use in states that allow it, which include California, Oregon, Washington and Colorado.

Although Tulare County prohibits medical marijuana businesses, CannaCanHelp was grandfathered in when the county ordinance was adopted in 2010. It’s one of two such business operating legally in the county.

After serving in the Air Force, Hardin returned home to Visalia, took classes at College of the Sequoias – and grew pot on the side to make extra money. CannaCanHelp bought his crop, and before long he was hired and is now the operations manager.

Marijuana is still a drug. It’s a gateway drug.

Warren Gubler, Visalia mayor

CananCanHelp Inc. is set up as a nonprofit mutual benefit corporation. It employs 16 people and is open seven days a week. The busiest day is Friday.

“We exist for the benefit of the members and staff,” Hardin said. There are 15,000 members, and while not everyone is a regular customer, at least 10,000 people buy something more than once a year.

To buy marijuana, the member must have a valid medical marijuana authorization from a physician.

The average purchase is $65, he said.

The passage of Proposition 64, along with laws governing adult use of marijuana in Colorado and Washington, show that the long-term trend favors growth of the recreational marijuana market, he said.

If CannaCanHelp succeeds in opening a recreational marijuana store, he estimates that 25 percent of its medical marijuana customers will stop renewing their medical marijuana letters – they are not free and must be updated annually – and will just buy it as a recreational product for adult use.

But it’s hard to tell for sure because the price will be higher for recreational pot.

Under Proposition 64, there will be significant taxes on recreational marijuana – a cultivation tax of $9.25 per ounce for marijuana flowers and $2.75 per ounce for leaves, a 15 percent state excise tax, and state and local sales taxes, plus whatever local tax is approved. (Proposition 218 requires that voters approve new taxes by a two-thirds margin).

By contrast, there will be no taxes on medical marijuana under Proposition 64.

The state has until Jan. 1 to make regulations and start issuing licenses. No licenses will be issued in areas where the proposed business is banned by local ordinance.

If the county does someday allow recreational marijuana businesses, CannaCanHelp will be ready.

The front door of CannaCanHelp opens into a retail area of smoking pipes, papers and bongs, T-shirts and accessories.

Marijuana is sold in a separate room – the dispensary – which customers can enter only after a clerk reviews a database to see if they have an up-to-date medical marijuana authorization.

The most popular products are dried marijuana buds for smoking and vials of liquid that are inhaled using an e-cigarette.

“The vaporizers have begun to take over the market,” Hardin said. “It’s economical, discreet and easy.”

Other popular products include a topical cream reportedly good for sciatica and liquids that lack a psychoactive effect but are said to be effective as medicine in some cases.

Unlike dispensaries in the Bay Area and Los Angeles, there are no marijuana brownies for sale because the county ordinance bans cookies and candies. It’s an annoyance not to sell edibles because the public wants them, the corporation says, but it believes it’s in its long-term interests to obey the local rules, Hardin said.

Marijuana businesses are not allowed to use banks, so paying bills requires money orders.

“It’s a huge issue for us,” Hardin said. “It’s dangerous. It makes us feel delegitimate. It’s a cat-and-mouse game.”

The business pays sales taxes and passed a Board of Equalization audit with flying colors, he said. In fact, the board owed the business money, he said.

“We’re very proud of that,” he added.

Lewis Griswold: 559-441-6104, @fb_LewGriswold