A handful of lawmakers and Atlantic City’s mayor are headed to Nevada for a brief “fact-finding” trip next week to learn from another casino-operating state’s experience of launching a marijuana economy seven months ago.
As hopeful entrepreneurs wait for the state Legislature and Gov. Phil Murphy to make good on a promise to legalize cannabis for adults, the New Jersey Cannabis Industry Association and Nevada lawmakers coordinated the 2-1/2-day trip to educate eager and curious government officials and business leaders.
Atlantic City Mayor Frank Gilliam said he is paying out of his own pocket for the trip because he believes legal weed could “jump-start” the city’s volatile economy.
“The key for me is to get more knowledge on how they rolled out the process and understand the pros and cons,” Gilliam said. “They have gaming like we do, so I want to figure out how those things coexist, and figure out to make it work for Atlantic City.”
Gilliam said he said he’s informally spoken to the governor about allowing the seaside resort community to permit sales and consumption under a temporary or pilot program.
“He was very open to it, although he did not give any commitment,” Gilliam said.
In a Jan. 17 letter, Nevada Senate Majority Leader Aaron Ford and Assembly Speaker Jason Frierson outlined an itinerary would include a visit to a cannabis production facility, a retail shop, and meetings with state and Las Vegas officials to discuss “developing regulations and a taxation scheme, business investment, licensing, public safety considerations and marijuana-related criminal justice reforms.
The trip would run from Wednesday night to Friday late afternoon, the letter said.
Sen. Nicholas Scutari, D-Union, the prime sponsor of the marijuana legalization bill who organized two trips to witness Colorado’s legal program, said he expects to attend the trip. He wishes more of his colleagues were going.
“It’s a fact-finding mission from my perspective and another opportunity for legislators to learn,” Scutari said.
A significant number of lawmakers from both parties have expressed discomfort or disapproval for legalizing marijuana.
Garden State lawmakers expected to take the trip include Scutari; Assemblyman Benjie Wimberly D-Passaic; Assemblywoman Annette Quijano D-Union; and Sen. Declan Scanlon R-Monmouth or his representative, organizers said.
Business attendees include Andrew Zaleski, CEO of Breakwater Treatment and Wellness medical marijuana dispensary in Cranbury; Paul Josephson, attorney for Cannabis Industry Association; Princeton psychiatrist and founder of Doctors for Cannabis David Nathan; and Hugh O’Beirne and Dara Servis, the association’s president and executive director, according to the trip’s itinerary.
Editors, USA TODAY
Published 4:58 a.m. ET Feb. 3, 2018
Patriots, Eagles feeling the pressure for Super Bowl LII
While the Eagles are vying for their first Super Bowl title in franchise history, the Patriots are going for a sixth Super Bowl win. The actual game itself, however, qualifies as a small portion of the overall television time dedicated to what most likely will be the most-watched telecast of the year. Beyond what happens on the field, there’s the halftime show (Justin Timberlake, whose last Super Bowl appearance was, you know, Nipplegate), the Puppy Bowl, and lest we not forget the ads. The game at Minneapolis’ U.S. Bank Stadium kicks off at 6:30 p.m. ET Sunday.
A year after a Penn State fraternity death and what’s happened since
It’s been one year since Tim Piazza died after an alcohol-fueled initiation at a Penn State University fraternity. Piazza’s death, which led to charges against 26 people, plus his fraternity Beta Theta Pi, commenced a year of sweeping change at American fraternities. Throughout 2017, several big universities suspended parts of Greek life in light of the deaths of Piazza and three other pledges. Penn State President Eric Barron announced a summit of university officials to address fraternities Thursday. All the while, the family still copes with the loss of their son. “It doesn’t get better,” Evelyn Piazza said.
Don’t worry about that ‘Potentially Hazardous Asteroid’ on Super Bowl Sunday
An asteroid spanning one-third of a mile may help put the big game in perspective when it hurtles past Earth at some 76,000 mph on Super Bowl Sunday. While NASA calls the rocky mass known as 2002 AJ129 a “Potentially Hazardous Asteroid,” fear not: It’s not slated to crash into our planet. So relax Pats and Eagles fans, no matter the outcome, it’s not the end of the world.
NASA’s OSIRIS-REx spacecraft is on a mission to an asteroid, but on its way it gave us a snapshot of two things we Earthlings are very familiar with. Veuer’s Josh King has the story (@abridgetoland). Buzz60
Marijuana shops prep for Super Bowl sales blitz
Marijuana stores across the country are bracing for one of their biggest sales weekends yet as football fans stock up for Super Bowl Sunday. Last year, sales leaped 40% on the Saturday before the big game, according to Green Bits, which runs sales systems for marijuana dispensaries. Nine states — Colorado, Alaska, California, Nevada, Vermont, Oregon, Washington, Massachusetts and Maine, plus the District of Columbia — permit recreational marijuana use, although not all of them allow sales in stores.
First-time nominees up for Directors Guild of America’s top film award
Greta Gerwig and Jordan Peele are among the five directors up for Saturday’s Directors Guild of America’s award for outstanding directorial achievement. The Guild announced its feature film nominees last month, including Gerwig for the coming-of-age film Lady Bird and Peele for his horror sensation Get Out. With nearly 16,000 members, including television and commercial directors, the guild often selects a more populist lineup when compared with the selections of the nearly 400 members of the directors’ branch of the film academy. Guillermo del Toro (The Shape of Water), Martin McDonagh (Three Billboards Outside EbbingMissouri) and Christopher Nolan (Dunkirk) round out the rest of the nominees.
AutoNation does not weed out job candidates who test positive for marijuana.
The Fort Lauderdale-based auto retailer, which employs 26,000 people nationwide, is among the companies that have changed their hiring policies, overturning long-held corporate mandates.
That’s happening particularly in states where medical or recreational marijuana have become legal in recent years, surveys show. Some employers are ignoring a positive result. Others are not drug-testing a job applicant at all.
Medical marijuana is legal in 29 states and Washington, D.C., and recreational marijuana is legal in nine states and Washington, D.C., with California being the most recent addition, according to national publications that have tracked legalization.
But the lack of concern about marijuana also is related to the tight labor market. Companies are seeking the best talent they can find in today’s robust economy, so they are catering to the needs of these in-demand workers, especially those in technology.
“We are looking to attract talent to our company, and putting this barrier in place, that’s not where society is at today,” said AutoNation CEO Mike Jackson, in an interview Thursday, after the company posted record earnings per share in its fourth quarter.
AutoNation has more than 300 dealerships, and many are in the states that have legalized medical or recreational marijuana: Florida, Texas, California, Nevada, Arizona, Colorado, Washington, Illinois, Minnesota, Maryland and New York.
“Look at our footprint and you can see it was the right decision,” said AutoNation spokesman Marc Cannon.
AutoNation discreetly made the decision about its hiring policy in 2016, as Florida and other states were legalizing medical marijuana. The nation’s largest auto retailer believes in staying on the cutting edge of employment practices, said Cannon, pointing to AutoNation’s addition of domestic benefits for employees in 2014 as another example.
“We’re still a drug-free work environment,” Cannon added, meaning there is no marijuana, or any drug or alcohol use, allowed at a work site. An employee who gets in an accident while driving for an AutoNation dealership, for example, would still be tested for controlled substances and could be fired.
Fort Lauderdale-based Citrix Systems, which has major operations both in Florida and California, said it does not require mandatory drug testing.
Even so, the global software company “promotes a drug- and alcohol-free workplace in order to provide a safe, healthy and secure work environment for all Citrix employees,” said Stacy St. Louis, a company spokeswoman.
South Florida tech recruiter Alex Funkhouser said the lack of drug testing is not unusual in tech industry, especially when companies are competing for software developers. For some, marijuana is part of a cerebral culture that demands constant creativity, he said.
When recruiting for a client, he asks whether the applicant will be taking a drug test. “Some are very corporate — everybody gets a drug test. But more than half — when talking with a chief technology officer or someone in the tech department — say, ‘No, we don’t,’ ” said Funkhouser, of SherlockTalent in Miami Beach.
With medical marijuana being legal in Florida, the issue is more “openly discussed now,” Funkhouser said. “In the past, it was winks and nods.”
Some South Florida employers that operate in states where marijuana has been legalized in some form were reticent to discuss hiring policies. That may have to do with their particular industries, which may have greater worker-safety concerns or must comply with government regulations, experts say.
Also, marijuana remains remains illegal under federal law. U.S. Attorney General Jeff Sessions last month rescinded the passive Obama-era policy on enforcement of federal cannabis laws.
Connecticut-based United Technologies Corp. operates military jet-engine maker Pratt & Whitney near Jupiter and the new UTC Center for Intelligent Buildings in Palm Beach Gardens. It also has operations in Arizona and Illinois (where medical marijuana is legal) and in Massachusetts and California (where both medical and recreational marijuana use is legal).
But when asked about UTC’s pre-employment drug testing policies, and whether these had changed in light of state laws, UTC had “no comment,” according to spokesman Bradford Dazen.
Boca Raton-based Office Depot, which is headquartered in Florida and has stores and warehouses across the country, declined to participate in this story; and Weston-based Ultimate Software, which also has employees in several states, didn’t answer requests for comment.
But surveys show that employers in states that have legalized marijuana are gradually removing the substance from pre-employment drug testing panels, according to a report by the Society for Human Resource Management in Alexandria, Va.
Angelo Filippi, head of the employment law practice at Plantation-based Kelley Kronenberg, which specializes in marijuana-related law, said Florida employers are under no legal obligation to accommodate workers who legally use marijuana for medical reasons.
But that could change: a Massachusetts court found in July 2017 that the language in its medical marijuana statute “implicitly recognizes that off-site use might be a reasonable accommodation.”
The case is focused on a Massachusetts-based worker who suffers from digestive issues due to Crohn’s disease. She maintains in the lawsuit that her employer had told her medicinal use of marijuana would not be a problem in hiring her. But after she tested positive, she was fired, according to court documents.
As a result of such court cases, Filippi said some employers are altering the language in their policies to give themselves “leeway to assess situations,” such as an employee who uses marijuana legally for medical purposes while off-duty.
More employers are more likely to change their hiring or workplace policies as the population of medical marijuana users grows in the state, said Seth Hyman, special projects director for Kelley Kronenberg who has been at the forefront of the issue in Florida. Recently, he was named to the Broward County Medical Marijuana Advisory Board, which makes recommendations to commissioners on providing medical marijuana services to qualified patients.
Hyman has a personal interest in the matter as well: his 12-year-old daughter, Rebecca, suffers from daily seizures due to a rare genetic disorder. A low-potency strain that is now available to her under Florida’s medical marijuana law has helped reduce those seizures, he said.
US prosecutor: Oregon has big pot overproduction problem
PORTLAND, Ore. (AP) – Oregon’s top federal prosecutor said Friday the state has a “formidable” problem with marijuana overproduction that winds up on the black market and that he wants to work with state and local leaders and the pot industry to do something about it.
U.S. Attorney Billy Williams convened the unprecedented summit of influential federal law enforcement representatives, state officials and marijuana industry scions after Attorney General Jeff Sessions withdrew an Obama administration memo that had guided states with legalized weed on how to avoid federal scrutiny.
The meeting included representatives from 14 other U.S. attorney’s offices, the FBI, the U.S. Postal Inspection Service, the U.S. Forest Service and U.S. Customs and Border Protection. Nine U.S. attorneys attended in person, including those from California, Washington, Colorado, Idaho and Nevada.
Gov. Kate Brown, a Democrat, told guests that Williams has assured members of her administration that “lawful Oregon businesses remain stakeholders in this conversation and not targets of law enforcement.”
Williams also sought to calm fears among pot growers, but said the market has a problem that must be addressed. Everyone needs a “bottom-line answer” on how much excess marijuana is being produced and how much is being smuggled out to other states where it remains illegal, he said.
The surplus attracts criminal networks and generates money laundering, drug violence and environmental contamination from pesticides and draws down water supplies in rural communities, he said.
“Here’s what I know in terms of the landscape here in Oregon, and that is, we have an identifiable and formidable marijuana overproduction and diversion problem,” he said.
Williams added: “And make no mistake about it, we’re going to do something about it.”
There is general agreement that marijuana from Oregon does wind up in other states where it isn’t legal. Still, it’s hard to say if pot smuggling has gotten worse in Oregon – where illicit pot farmers were thriving long before recreational legalization – or how much of the marijuana leaving the state filters out from the legal side.
Williams has previously said law enforcement in 16 other states have reported seizing marijuana from Oregon and postal agents have intercepted more than 2,600 pounds of pot in outbound packages and over $1.2 million in associated cash.
Advocates dismiss the idea that legalization has caused a spike in black markets sales. It’s just that now, because it’s legal, it’s much easier to track it back, they said.
“When I moved to Oregon in 1979, cannabis was a billion-dollar crop then, so the notion that this is somehow caused by legalization or by the medical program is something that’s misplaced,” said Leland Berger, an attorney who specializes in marijuana cases.
Oregon voters approved the sale of recreational marijuana in 2014, and it became legal the following year. The state has allowed medical marijuana since 1998.
It now has about 900 licensed recreational growers, with more than 1,100 licenses awaiting approval. Another roughly 25,600 growers in the state produce cannabis for medical marijuana patients. More than 500 retailers are licensed to sell recreational weed, with nearly 250 applications pending.
Oregon did not cap the number of recreational pot producers, virtually guaranteeing an overproduction problem, said Seth Crawford, a former Oregon State University professor who’s an expert on marijuana economics and cannabis policy.
Coupled with Oregon’s small population – 4 million people total – and its reputation as a prime cannabis-growing location on a par with Northern California, a surplus was predictable here, Crawford said. He estimated Oregon growers produce up to three times the amount of marijuana that the state can absorb legally each year.
“You created this huge industry that has nowhere to put its product,” Crawford said.
“If you were an investor and you had just dropped $4 million into a (marijuana) grow and you had thousands of pounds of flower that was ready to go but you had nowhere to sell it … if you want any of your money back, the only thing you can do is sell it on the black market,” he said. “It was a system designed for failure.”
Those in the industry are cautiously optimistic about the summit, said Anthony Taylor, president of Compassionate Oregon, which advocates for medical marijuana patients.
“Let’s talk about it,” he said. “I think everybody realizes it’s a discussion that needs to happen.”
Follow Gillian Flaccus on Twitter at http://www.twitter.com/gflaccus
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Amy Alonzo, Mason Valley News
Published 9:44 a.m. PT Feb. 2, 2018 | Updated 11:01 a.m. PT Feb. 2, 2018
Businesses may soon be able to legally grow and distribute marijuana in Lyon County.
County commissioners in 2013 banned marijuana growth, production and sales in the county, but on Thursday Lyon County Commissioners discussed ordinance amendments regarding the licensing of marijuana establishments and the regulation of marijuana growth and cultivation in the county. The ordinances specifically pertain to the county’s unincorporated areas.
“I’m in no way in favor of use, especially recreational use,” Commissioner Ken Gray said. “The way we need to deal with it is to regulate it, and (being a) conservative Republican, tax the hell out of it.”
The pros and cons of approving the amendments are similar to the legalization of prostitution and gambling, County Manager Jeff Page said.
“It allows the county to proactively regulate that the people doing these things are doing them to the letter of the law,” he said. “The downside is we are going to have legalized marijuana in our community, which we are going to have regardless … From my perspective, not that I want to get into regulating another business, but it does provide the county a way to keep things cleaner than if it’s on its own.”
Nobody in the audience requested to speak on the matter during public comment. The board is scheduled to discuss the matter further at its Feb. 15 meeting, and a second public hearing will be held at that time.
Page said he did not have a guess as to how much revenue the county could see if it allowed marijuana sales. However, “With this (amendment), there is revenue,” he said. “Without it, we don’t have revenue.”
More than $27 million was generated in revenue the first month recreational marijuana was allowed in Nevada.
Medical marijuana was legalized in the state nearly two decades ago, and state residents approved the legalization of recreational marijuana in 2016. The Fernley City Council in September approved a bill to allow a medical dispensary, cultivation facilities and independent lab testing in the city. The city had previously passed a 2014 ordinance prohibiting the selling of medical marijuana in the city and is still opposed to recreational sales.
Yerington City Council in October entered a five-year marijuana compact with the Yerington Paiute Tribe. The compact prohibits the city from allowing another dispensary to open in the city in exchange for the collection of revenue from products sold at the dispensary to non-tribal members. The tribe had offered the county the same compact, but the county tabled voting on the matter. At an October meeting Commissioner Gray said “It would be better off if the tribe just did what they wanted to do and keep us out of it.”
Nevada residents are currently allowed to grow up to six plants if they don’t live within a 25-mile radius of a dispensary. With dispensaries in Carson City, and Fernley possibly getting one, this means about 40 to 50 percent of Lyon County residents can grow their own plants, Chairman Bob Hastings said. Carson City in January began allowing the sale of recreational marijuana in addition to medical.
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On July 1, hundreds of Nevadans stood in lines across the valley waiting for dispensaries to open up for recreational marijuana sales.
Six months later, the industry in Nevada is thriving, but that doesn’t mean all the cannabis in the valley is legal.
FOX5 investigated how legalization has affected the black market, by speaking with both street dealers who didn’t identify their real names and valley dispensaries.
“If you need it, I can find it and I can get it to you,” one dealer, who we’ll call ‘X’ said.
When they call, he comes. But don’t count on him clocking in for this job.
“I’m dealing with family people,” said the dealer. “Moms, dads, c-workers; it just brings people together.”
He said he sells marijuana the same way he did before July 1: illegally and on the streets.
“It’s to support myself because I have three kids,” he said. “I’m dealing with child support, so my checks go to them and my profits from this go to me. It’s just extra money to keep me afloat.”
He said legalization has only made it easier for him to carry his product.
“I usually just ride with the legal limit,” he said. “If I get stopped, I have the legal limit, so they don’t mess with me.”
It is legal for people 21 and over to carry up to an ounce.
Since July 1, North Las Vegas Police have arrested fewer people for marijuana possession. Arrests are down 66 percent, but according to North Las Vegas Police, there hasn’t been any change in arrest numbers for possession with intent to sell marijuana.
Similarly, X said he has no plans on stopping anytime soon.
“People don’t stop selling food stamps and that’s illegal,” he said. “I mean there is a market.”
He said he makes a minimum of $400 a week from his marijuana sales.
“I deal with about a quarter pound, which is four ounces,” he said. “I think the most I’ve made out of that is $1,200 and then out of that profit of that, $700 because I have to give my money back to reinvest in my business.”
Which is when he buys from the black market grower, whom he did not name.
However, legalization has changed X’s sales job. His profits are down so he said he has to make up for that.
“I sold cocaine, molly, ecstasy,” he said.
He said, he doesn’t feel bad selling it.
“I feel like they should feel bad for wanting it,” he said.
As for marijuana, capitalism is the competition.
“It’s hard to get customers and price them how I want to price them,” he said. “Now, I have to compete with their prices and try to beat them or go with the quality.”
So he lowered his prices which lowered his profit.
A quarter ounce of Gorilla Glue #4 from the dealer costs $60, GG#4, which is referred to as Gorilla Glue on the streets is about double the price at dispensaries.
So what is the point of shopping at a dispensary?
“You either pay for it now, or you pay for it later,” Mike Pizzo, Marketing Content Manager at Reef Dispensaries said.
Reef Dispensaries’ multi-million dollar facility, has state of the art technology to keep their plants in safe and in ideal living conditions.
“The state of Nevada’s testing regulations are so strict, perhaps the strictest in the country,” Pizzo said. “We adhere to those standards so you don’t have to worry about your cannabis being contaminated.”
Pizzo said it’s also safer there for the customer.
“With our security presence, no one is going to try anything.” “If they do, they’re going to get shut down pretty quickly.”
However, some still choose to go to a street dealer. The dealer FOX5 spoke to also has a layaway plan for his long time customers; he’ll front the weed and they pay later.
“If you keep it on you, you most likely can sell it,” X said. “The dispensary is not always open, and people don’t always have their IDs. The money is out there, you just have to get to it.”
But customers can also get scammed on the streets.
“Before, I made more money because anything I had, I made double,” the dealer said. “Now it’s kind of like, depending on who you get, because it’s possible that’s hipped on to it and people that are not. So if you get someone that isn’t hip to it, that’s from out of town, you can keep that price at the higher market.”
Back at the dispensary, the prices stay the same no matter the customer.
Pizzo said before the legal market took hold, people had no idea what they were ingesting.
“You might pay a bit of a higher price on a legal market,” Pizzo said. “But if your black market grower is spraying the plants with Eagle 20, which is a harmful pesticide, you could end up with cancer.”
So far, there has been no sign of the black market dying, especially for dealers who are looking to supplement their income with a little green on the side.
“I can go get a job and work ten times harder,” the dealer said. “Or I can wait for my phone to ring and create my own check.”
Copyright 2018 KVVU (KVVU Broadcasting Corporation). All rights reserved.
One of Pueblo’s first families of retail marijuana doesn’t fit a stereotype.
Randy Longo, the matriarch, is a retired Pueblo grade school teacher and principal.
Her husband, Louis, is a retired Pueblo police officer. The couple’s business sidelights include past ownership of the Pueblo Athletic Club and storage units.
Their adult son, Kevin, studied business at the University of Nevada-Las Vegas.
Two years ago, the family opened The Canna Cabinet medical marijuana store in a remodeled office and car storage building they own at 2630 W. Pueblo Blvd.
Two months ago, the store added a separate recreational marijuana site, becoming the fifth recreational pot store licensed in the city of Pueblo. The combined store employs seven people.
Through February, the store is celebrating the opening of the recreational dispensary with specials that include storewide discounts. The owners thought about hosting a bigger celebration but struggled to find the time given how busy the store has become.
“The rec side growth has been increasing week by week … and it’s going really well,” Kevin Longo says.
Of the three, Kevin was the only one with any experience with even medical marijuana.
“He (Kevin) was trying to educate me on how much it helps kids and I think that’s what really got to me,” Randy Longo says.
“There was one little girl (with cancer) and he was telling me about how the parents had moved to Colorado because the parents wanted to help her. And it really struck a nerve. I’ve always worked with kids and I thought, ‘Well, if it can help kids, then think how wonderful it is for everybody else.’ Then we just kept talking about it a lot and he kept researching.”
Eventually, she and her husband gave medical marijuana a try for their own pain relief, including her pain from the bone-loss disease osteoporosis. “It helps with the pains I get. And so I know how effective it is. He (Kevin) uses me as a guinea pig to see how I’m going to react because I have a very low tolerance … so I can tell the patients when they come in.”
Building a business
Kevin Longo, who oversees the operations, said the store’s name and simple, woodsy decor reflects the family’s goal of offering a warm, comfortable environment for shoppers, an estimated 65 percent to 70 percent of whom are older adults.
“We get a lot more older clientele, which I was very, very surprised about. Me and my dad both. We thought it would be a bunch of college kids with medical cards. It was quite the contrary,” he says.
Most of the extensive remodeling work, down to the cabinets and tables, was done by the son and the father.
“We pretty much did all of the construction ourselves. I had an idea of making it kind of a 1920s pharmacy feel, a speakeasy feel, but it was just a motif I liked. Not being an interior designer or decorator, it was interesting to see this come to fruition. We just put things together and, hey, it worked. It’s beautiful,” Kevin Longo says.
Sign of the times
One piece of craftsmanship shoppers won’t find is an outdoor sign with the store’s name. The city of Pueblo ruled the “Canna” part of the store’s name violates the city’s rule against using marijuana terms in outdoor advertising. The store disputes the ruling but also likes its name — so there aren’t any outdoor signs with the name.
The key to the store’s success is the quality of its products, owing to its network of top product makers and distributors, Kevin Longo says. “Very unique products. You’re not going to find what I have on the shelf anywhere in Pueblo,” he says.
Customer service also plays an important role, the family says.
“We really do care about this place (Pueblo),” Kevin Longo says.
Adds Randy Longo, “And we care about the patients. They’re our friends. They come and tell us how things are going; share good news and bad news with us. And we cry together if we need to.”
Operating hours are 10 a.m. to 9 p.m. Monday through Saturday and 11 a.m. to 7 p.m. Sunday. The telephone number is 564-2925.
BOSTON — That ordinary bottle of juice delivered to your doorstep will set you back at least $55. But the bag of marijuana that comes with it? On the house.
Retail marijuana stores are months away from opening in Massachusetts, but some companies have been quietly operating for more than a year, selling and delivering marijuana via a legal loophole that exists in nearly every state that has legalized recreational marijuana use.
Companies like HighSpeed, which describes itself as a juice delivery service, are exploiting so-called “gifting” provisions that allow for the exchange of small amounts of the drug, so long as it’s given away — “gifted” — from one adult to another.
The legal language makes it permissible to pass a joint at a party or drop a bud in your brother’s Christmas stocking, but some entrepreneurs see it as an opportunity to get ahead of the regulated market, planting an early stake in what could become a crowded and lucrative industry.
“Under any fair reading of the law, these businesses are illegal,” said Roger Katz, a Republican state senator in Maine who is studying the issue. “If it walks like a duck, quacks like a duck, it is a duck.”
At least four enterprises have done gifting business in Massachusetts since marijuana was legalized in December 2016, two of them in the Boston area, The Associated Press found in an investigation that included records gathered from law enforcement agencies around the state.
In addition to HighSpeed, a Boston-area company cleverly called Duuber has drivers delivering marijuana-themed T-shirts that come with gifts of pot.
Officials in western Massachusetts also looked into a Craigslist ad offering plastic sandwich bags costing up to $325 apiece (the marijuana in them was free) but dropped the case after they couldn’t identify the seller.
In Springfield, officials ordered a smoke shop called Mary Jane Makes Your Heart Sing to shut down last March after it gave marijuana to customers who paid a $25 to $50 admission fee.
That hasn’t scared HighSpeed, which also operates in D.C.
“We’ve had no issues with law enforcement, and we’re going to do our best to keep it that way,” said founder David Umeh. “We’re not doing anything wrong. We’re abiding by the current legislation until it changes.”
Gifting provisions are on the books in Massachusetts and all but one of the other states that have legalized marijuana: Alaska, California, Colorado, Maine, Nevada, Oregon and Washington state, plus D.C. Most instituted the measure specifically as part of new marijuana laws.
Vermont does not have a provision, but local experts and activists argue the exchanges will be permitted there, too, since they’re not expressly banned.
Some states have tried to stem abuse of the laws by prohibiting businesses from advertising marijuana giveaways or specifically banning “delayed or disguised” payments for marijuana gifts, said Leo Beletsky, a law professor at Northeastern University in Boston.
Facing a declining population and the exodus of business activity, the town of Blythe hopes to gain financially by welcoming the cannabis industry to town. Jay Calderon/The Desert Sun
BLYTHE, Calif. — In this desert town on the California-Arizona border, where locals fear the economy is withering and the future is drying up, there is the seed of an idea to turn it all around: marijuana.
Blythe sits in the Palo Verde Valley, an agricultural community where some families can trace their farms back to the founding of the city 100 years ago. In satellite images, the valley stands out as a spray of green pixels in a sea of desert tan, with the Colorado River feeding its honeydew melons and alfalfa, its cotton and wheat.
And soon, if all goes according to plan, its cannabis.
Marijuana is a 21st century cash crop – and one that Blythe did not immediately embrace. The city rejected a ballot measure to regulate medical marijuana in 2014, but after California legalized adult use marijuana in 2016, Blythe City Council decided in a split vote to allow cannabis businesses.
Blythe is on its way to joining a small group of border towns along the eastern edge of California that are seeking to capitalize on legal weed. Proponents of bringing marijuana into Blythe say the city can compete against the Coachella Valley and coastal cities because of its cheaper land, plentiful water and, potentially, lower taxes.
Plus, Blythe could attract a different set of customers – visitors from Arizona, who might cross the border to enjoy some cannabis before returning to their home state where recreational marijuana is still illegal.
But some Blythe residents are ambivalent about marijuana, worrying that the drug could threaten public health and safety. They are also skeptical that the pot industry will be the economic infusion the city needs, pointing to previous attempts to revive the city’s commercial prospects that have come up short of expectations.
Tim Wade, a recently retired city councilman, voted in favor of regulating the marijuana industry in Blythe when it came before council in 2017. He views marijuana as a potential source of revenue for the city.
“It’s here,” he said. “We might as well make some money on it.”
Wade, 53, grew up in Blythe in the 1960s, back when the bedrock of the Palo Verde Valley’s economy was agriculture.
But as farming has waned, residents say, no other industry has given the area the boost it needs.
Blythe’s state prisons have provided some relief, but not enough. As of the most recent Census estimates in 2016, Blythe is a city of 19,700 people, counting 5,600 inmates held at Chuckawalla Valley and Ironwood State prisons.
The city also has come to be known by outsiders as a mere pit stop for gasoline and fast food – and even that source of money could taper off, since gas is cheaper in Arizona.
“People think there’s going to be some savior that’s going to come to Blythe, that’s going to help them out,” Wade said. “There’s no shopping here. Big corporations don’t want to come here. My personal opinion is, we’ve got to do something.”
Blythe residents repeat their economic woes like a mantra. They mourn the city’s Kmart, which closed last year, taking with it sales tax revenue and necessities like clothing and home goods that are now hard to come by in Blythe. They say the population is shrinking, a fact which is due in part to a decline in the prison population. Many sum up the condition of Blythe in one word: dying.
The numbers fill in what the locals can feel. In 2016, the unemployment rate in Blythe was 13 percent, more than two and a half times the national average, according to the census. Per capita income in Blythe ticked up slightly between 2010 and 2016, but the percentage of people whose income put them below the poverty line rose from 16.8 to 23.7 percent over the same period.
So far, the marijuana industry has been eager to move into Blythe. Some 40 marijuana businesses are seeking the city’s blessing to put down roots. City Council has inked a development agreement with a startup planning to build more than two million square feet of cannabis space in the town.
Wade hopes that the promised investment will be good for Blythe.
“I care about the community. I want it to prosper. I want it to be something,” he said. “I don’t want it to die.”
Steven Gregory first laid eyes on Blythe nine months ago.
“It was almost like when Brigham Young saw the Great Salt Lake,” he said. “Like, ‘This is the place.’ It was like literally the planets lined up.”
Gregory was on the lookout for a spot to develop marijuana real estate. Somewhere between Blythe’s historic advantages and the symptoms of its decline, Gregory saw the makings of a marijuana mecca. Blythe, he points out, has cheap land and plentiful water, as well as a zip code on thesix-hour drive between Los Angeles and Phoenix. It has a population in need of work.
“I look at this as a once-in-a-lifetime opportunity,” Gregory said. “Not only is it going to be financially very rewarding, but how many times do you get to change the trajectory of a city that has had a very sad last 30 years?”
Gregory, 63, is now the CEO of Palo Verde Center, a startup that plans to build 2.4 million square feet of marijuana cultivation and processing facilities on an expanse of raw land south of Interstate 10.
After Gregory retired from a career in finance at the end of 2005, he dug into real estate development. From there, he got interested in cannabis.
But Gregory decided early on that he didn’t want to “touch the plant,” meaning that he wouldn’t grow pot, or sell it, or do any of the steps to process it in between. Palo Verde Center follows that code. It will lease space to marijuana companies and give them all the things they need to get started, but it won’t work with the herb itself.
The startup’s vision resembles a homeowners association. Like an HOA, Palo Verde Center plans to provide basic common resources like facilities, lights, water, power and security services. The startup might also have a hand in hiring, rounding up contract laborers that tenants can use as needed. Gregory even wants to get into residential development and has proposed building86 houses in Blythe.
In some ways, the project’s expansiveness is a necessity of Blythe’s isolation; in a city that just lost its Kmart, marijuana companies can hardly hope to find the more specialized goods and services that they are bound to need. Palo Verde Center will have to fill in the blanks. It hopes to have a tenant that would serve as a testing laboratory, and a retailer that could sell supplies to its neighbors. The startup is in talks with a distribution company that could truck product out of Blythe.
Gregory says Palo Verde Center is set to hit two major milestones in February: it will close on 133 acres for its sprawling development and strike a deal to fund the project.
If all goes according to plan, the project will cost more than $300 million and will rank among the largest cannabis business campuses in North America when complete.
The trick to it all is keeping the costs of doing business in Blythe cheap. Gregory is convinced that as more businesses grow marijuana, and as more markets open up to the industry, the price of the plant will plummet like any other commodity crop.
“The only reason why cannabis was ever very expensive was that it was illegal,” he said.
Gregory’s hope is that businesses that put down a flag in Blythe will benefit from economies of scale – and from cost savings unique to the city.
Gregory believes that land in Blythe is cheaper than other parts of California. Palo Verde Center expects to pay $2.3 million for 133 acres of land, Gregory said, which comes out to about $0.40 per square foot. (That sum seems like a bargain even in Blythe, where a nearby property was listed for $3 per square foot.)
Comparing land costs to other cities can be tricky, since land that already has city approval to grow marijuana can cost a lot more than land that doesn’t. But some evidence backs up Gregory’s theory.
For land in Desert Hot Springs – one of the most pot-friendly towns in Southern California – raw property without city approval sold for $4.45 per square foot on average in 2017, according to sales data from real estate firm Desert Pacific Properties. In the nearby city of Coachella, Desert Pacific Properties’ 2016/2017 cultivation land sales averaged $3.31 per square foot.
Blythe might have another ace up its sleeve, too: lower taxes. Pending voter approval on a ballot measure in June, Blythe’s city marijuana taxes would be up to $6 per square foot of cultivation space and up to 2 percent of gross receipts from dispensaries, testers, manufacturers and distributors.
The proposal appears to be well below tax rates in other cities. In Desert Hot Springs, a grower with 10,000 square feet of marijuana would pay up to $145,000 a year in taxes. In Coachella, it would pay $150,000, plus a gross receipts tax. In Blythe, its annual taxes would amount to $60,000 or less.
The future site of the Palo Verde Center is also crisscrossed by two important resources: canals from the Palo Verde Irrigation District and a natural gas pipeline. Because the district charges by the acre for unlimited water usage, Palo Verde Center will include water with rent. And because the startup plans to install generators onsite, Gregory estimates that tenants will shave a third off their energy bill compared to other indoor grows in California.
Besides Gregory, Palo Verde Center has three business partners – Kent Martin, a former investment banker, David Garcia, a former city attorney in Lynwood and Jason Teramoto, who worked for former U.S. Representative and Pete Stark, a medical marijuana proponent before going into the pot industry himself. (Garcia is not to be confused with David Garcia, the former city manager of Coachella.)
Gregory is the first to admit there are downsides to Blythe. For one thing, it’s far away from customers in major cities. It’ll also have to attract workers from out of town – people who could otherwise work in the Coachella Valley or coastal California.
But Gregory doesn’t see those flaws as fatal.
“If you think about it, does it really matter?” he said. “No one says, ‘My goodness, Napa Valley is so far away from Los Angeles.’ You grow in areas where you have a lower cost of operations and you sell into areas where you have more affluent consumers. The cost to transport cannabis, relatively speaking, is far below the costs of transporting fine wine.”
As for workers, he says, housing is cheaper in Blythe – and because the legal marijuana industry is still young, there’s opportunity for entry-level hires to move up the ladder.
“We look forward to competing against Desert Hot Springs and the Coachella Valley,” he said.
A city in search of a savior
It would be generous to say that Blythe supports marijuana.
“This town is not what I’d call a pro-cannabis town,” Gregory said. “It’s like, ‘We’re pro-salvation. We’re pro anything that will help this town survive.'”
The motion to move forward with marijuana regulations passed 3-2, with “no” votes coming from Councilman Oscar Galvan and Joey DeConinck, who was serving as the city’s mayor at the time.
“There is a lot of homework that needs to be done here,” DeConinck warned at one City Council meeting in March. “It is not all about money.”
DeConinck is now on his fourth term on City Council. The 63-year-old started visiting family in Blythe in the 1950s and moved there in 1972, drawn by the region’s access to water for farming. Like other locals interviewed for this story, he worries that marijuana is a gateway drug to addictive substances, even if it’s a balm to patients and the elderly.
DeConinck also sees economic reasons to be skeptical about cannabis. People think marijuana will save their town, just like they thought that jobs and development would follow when Chuckawalla Valley State Prison opened in 1988 and when Ironwood State Prison followed in 1994.
But he doesn’t think Blythe has always benefited from its two state prisons. DeConinck remembers that local dentists and doctors shut down their private offices after the prisons opened, taking jobs working for the state instead.
DeConinck’s instincts as a farmer also make him cautious to hitch his city’s future to a single crop. Prices fluctuate. Markets change.
“If cotton’s good, you plant cotton,” he said. “I believe (marijuana) is going to get cheaper and cheaper as more supply comes on board.”
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Even Mayor Dale Reynolds, who voted in favor of regulating the industry in Blythe, voted against Proposition 64, which legalized recreational marijuana use in California in 2016. As for the potential economic impact of marijuana on Blythe, his optimism is qualified.
“If the (marijuana) industry comes to town, it will help,” he said. “Is it going to be the savior? No. But it will help us to move forward and get other needed things for the city. Our infrastructure, our roads, matching funds for grants. Things like that.”
“Hopefully this is the start and we can continue building on it,” Blythe Interim City Manager Mallory Crecelius added. “So it won’t just be the cannabis that comes, and we can get some new housing, some new retail. That’s really what we’re looking for.”
Worries about federal law are also casting a shadow over Blythe.
Ned Hyduke is the General Manager of the Palo Verde Irrigation District, the agency that supplies Colorado River water through canals to a 189 square mile territory that includes the City of Blythe. The federal Bureau of Reclamation oversees the Colorado River.
“When I heard about cannabis coming in to the Palo Verde Valley,” Hyduke said, “my first reaction was to do some homework on what the Bureau of Reclamation’s policy was.”
The short version of its policy is this: Reclamation won’t approve using its water to grow marijuana, and if it learns that anyone is using its water to grow marijuana, it has to tell the Department of Justice. But the agency doesn’t itself enforce federal drug law.
On the other hand, the Palo Verde Irrigation District has its own obligations to customers. So long as a cannabis grower stays up to date on its water bills and tax, Hyduke said, PVID will supply it with water. Unless the federal government decides to shut down marijuana growers after all.
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“The feds might get a wild hair and say, ‘We’re going to enforce it,'” Hyduke said. “People ask me, ‘What do you think is going to happen?’ And I don’t know.”
Or maybe the marijuana industry will never take root in Blythe, like so many other would-be boons before it.
“There was a Walmart that was going to come here. It didn’t make it. There was a casino that was going to come here. It didn’t make it,” Hyduke said. “Things never quite finish to the end.”
Bud border towns
For now, Blythe is a city cut off from its two closest metropolitan markets for pot, Phoenix and Las Vegas. So long as marijuana is prohibited under federal law, it can’t cross state lines – even though Arizona is a medical marijuana state and Nevada, like California, has fully legalized the drug.
But if federal law embraces cannabis, Blythe would be one in a string of California border towns between Los Angeles, Las Vegas and Phoenix that are positioning themselves to profit from the weed trade.
Drive one and a half hours north of Blythe, following U.S. Route 95 along the west side of the Colorado River, and you’ll arrive at Needles, another cannabis-friendly stopping point. This city of 5,000 people passed its first tax on marijuana businesses in 2012 and has ushered in a new group of pot businesses since updating its city ordinance in 2016.
Needles reportedly has approved 40 cannabis facilities to date. One marijuana business is moving into an auto shop. Another wants to take up residence in an old KFC building. The City Manager of Needles, Rick Daniels, has credited medical cannabis with turning around the city’s property values and inspiring residential developers to start new housing projects.
Travel another hour and a half north and there’s Nipton, a tiny town that is owned by a marijuana company aiming to turn it into a destination for cannabis tourism. Nipton is “bring your own bud” at present, since it’s illegal to sell recreational pot in unincorporated San Bernardino County.
And then there’s Blythe. Palo Verde Center is set to close on its site in February, putting it on track to break ground in June. Tenants could start moving in early 2019, Gregory thinks.
Over the border in La Paz County, Arizona, law enforcement is taking a pragmatic approach to pot.
“Are we going to seek it out? No,” said Captain Curt Bagby with the Office of the La Paz County Sheriff. “It’s like a drunk driver.”
Officers will confiscate any marijuana they find during a stop and have discretion to write up the driver, he said. But as public sentiment shifts to support legalization, fighting marijuana users is “a waste of the taxpayers’ money and time.”
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