Twelve organizations have submitted applications to open a fourth medical cannabis dispensary in Berkeley, according to city officials, but the public won’t know who they are for 45 days.
The deadline to apply for one of the lucrative franchises was 4 p.m. on March 20. But Berkeley won’t release their names during a review period in which staff determines all the applications are complete.
Read more about medical cannabis issues in Berkeley.
“In order to keep a level playing field among applicants until applications are finalized, we won’t be releasing more information until all applications are complete,” Elizabeth Greene, a planner who staffs the Medical Cannabis Commission wrote in an email. “This period is expected to last approximately 45 days.”
City Attorney Zach Cowan said this is such a large money-making operation and the stakes are so high that the city wants to make sure the process is fair. If the names of the applicants got out, an organization could work behind the scenes to undermine another’s application.
“This is much more like a bidding situation,” said Cowan. “I can imagine where if a name is out there someone else will say ‘I know how I can prevail upon that person or someone who knows them to back off so I can have a leg up on them.’ There’s enough money involved in this industry, it’s enough of an unknown set of applicants … [that] we are trying to keep it as absolutely level as possible.”
Some of the applicants have been open about wanting to operate the fourth dispensary. Charley Pappas, the chair of the Medical Cannabis Commission and the former operator of Divinity Tree in San Francisco, which was forced to close when the federal government threatened to sue the landlord, has submitted an application, he said. Pappas and four others have formed Community Partnership 4 Health and have located a space at 1941 University Ave. near Bonita, he said.
Pappas’ partners include Dorlista Reed, a Berkeley High and Cal grad who has worked in Oakland city government; Mina Sohaei, a cancer survivor who moved to the U.S. from Iran in 1974; Daniel Clancy, a real estate agent and cancer survivor who operates a cannabis collective, and Jerome Rixter, a Hayward native who is currently overseeing the creation of cannabis products.
Pappas said that when he went in to submit his application, he saw people from HopeNet, a dispensary in San Francisco that was also forced to close by the federal government. Pappas also saw people from Forty Acres Medical Marijuana Growers’ Collective, the embattled collective that the Berkeley City Council declared a public nuisance in January. Forty Acres has challenged that ruling in court and is still open and operating, according to Cowan.
Berkeley voters passed Measure T allowing the creation of a fourth dispensary in 2010. Adopting guidelines for a new dispensary has taken time because the city needed to create a new cannabis commission, which then had to create a selection process. In the middle of that, a number of U.S. Attorneys in California started to crackdown on dispensaries around the state, threatening to seize the buildings in which they were housed and other assets of the landlords.
Melinda Haag, the U.S. Attorney for the Northern District, forced Berkeley Patients Group to move from its home at 2747 San Pablo Ave. because it was too close to a preschool. BPG found another site at 2366 San Pablo Ave., but Haag filed a lawsuit against the owner of that building because she thinks BPG is still too close to a school. That lawsuit is pending.
The federal crackdown and the ensuing uncertainty prompted Berkeley officials to slow down the siting of a fourth dispensary.
While dispensaries are required by California law to operate as non-profits or not-for-profit organizations, they are still lucrative organizations. Pappas said his tiny Divinity Tree operation grossed around $3 million a year. In its former location, BPG grossed around $15 million in 2009 and paid its top three executives close to $1 million in salaries, according to a California Watch story.
City officials will now review the 12 applications to make sure they are complete, and evaluate and rank them. The Medical Cannabis Commission will whittle the list down to 10 applicants in a public meeting. The city council eventually will chose the operator. The process will take at least six months, said Pappas.
Berkeley tells cannabis collective to shut down (01.22.15)
Berkeley City Council: Let’s add fourth cannabis dispensary (06.18.14)
Berkeley will again consider a 4th cannabis dispensary (06.03.14)
Berkeley delays decision on fourth dispensary (09.20.13)
Berkeley to consider 4th medical cannabis dispensary (09.17.13)
Berkeley delays fourth medical cannabis dispensary (06.13.13)
Officials oppose Fed’s suit to shut dispensary (05.18.13)
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