Berkeley Patients Group took in $15 million and paid its top executives $911,000 in 2009, while only donating $18,083 to charities, according to a story released Wednesday by California Watch.
Etienne Fontan earned $357,529, Tim Schick earned $290,765, and Debby Goldsberry earned $263,299 in 2009, part of $3.3 million spent on labor costs, according to story. The medical cannabis dispensary, which operated at 2747 San Pablo Avenue until May, when the federal government forced it to close, spent $151,789 on security in 2009 and distributed $253,433 to marijuana advocacy organizations, according to California Watch. It made about a 40% profit on its products.
BPG officials had told the Oakland Tribune in 2009 that it donated about $300,000 a year to charities.
The California Watch story is the most revealing disclosure ever of the finances of what has long been regarded as Berkeley’s most established dispensary. Since BPG is a private, not-for-profit company, it is not required to reveal its finances, although it must pay taxes to both the state and Berkeley.
The city levies a 2.5% tax on sales of cannabis, which means BPG would have had to pay $375,000 in taxes to Berkeley in 2009 if Measure T had been in place. Voters adopted the tax on cannabis sales in 2010 and the city has estimated it will get about $150,000 a year from the city’s three dispensaries.
In 2010, a lawsuit filed by Berkeley Patients Group against one of its former employees, Rebecca DeKeuster, also revealed details about the profits of medical cannabis dispensaries. BPG had sent DeKeuster to Maine to apply for the license to open four dispensaries, but DeKeuster soon quit and went out on her own.
Papers filed with the lawsuit revealed that the Northeast Patients Group, which would have been affiliated with Berkeley Patients Group, expected to gross more than $2 million serving 691 patients at its four dispensaries in the first year, selling medical cannabis for $340 an ounce. It projected gross revenues of almost $7.4 million in its second year of operation, serving 1,159 patients. That worked out to revenues of $5,500 to $7,500 per patient, depending on the location.
Berkeley Patients Group was the largest medical cannabis dispensary in Berkeley and one of the largest in the East Bay with 13,000 members. In addition to providing a wide array of medical cannabis and plants, it provided free massages, yoga classes, and other types of services to its members. The dispensary shut down after its landlord David Mayeri received a letter from the federal government threatening to seize the property since it was located within 1,000 feet of a school. Since it shut its physical plant, Berkeley Patients Group has been running a delivery service.
Officials from BPG say they are close to finding a new location for the operation.
In February 2011, the state Board of Equalization slapped Berkeley Patients Group with a bill for $6.2 million in back taxes and penalties. The dispensary has been paying off its debt slowly.
Officials from BPG declined to talk to reporters from California Watch.
However, a Los Angeles lawyer quoted in the California Watch article said the finances of Berkeley Patients Group did not seem out of line.
Read the California Watch story.
Berkeley’s largest cannabis dispensary to close May 1 [3.15.12]
Berkeley cannabis lawsuit reveals bitter infighting [7.18.11]
Berkeley Patients Group owes $6.4 million in back taxes [2.24.11]