Launching a business in the cannabis industry is expensive but worth it, according to several speakers at Cannabis 101, a Tuesday, May event sponsored by Port Hueneme’s Chamber of Commerce.
“The expense of cultivation is in the millions of dollars,” said Jon Zimmerman of MGO Type Atypical, a Los Angeles firm that offers accounting and other services to the industry.
“Just your facility will run you hundreds of thousands of dollars; stocking your shelves, that’s $200,000,” continued Zimmerman before adding, “If done right, it will pay off multiple times.
“Businesses support other businesses; every (nearby) business will see an increase in traffic,” Zimmerman noted. “What investors have to get comfortable with is the cash; this is still a cash industry.”
As it goes from being underground to mainstream, the industry remains cash-only because banks are reluctant to work with businesses that the federal government hasn’t said it considers legal.
“Banks are required to go through horrendous procedures and they don’t want to take the risk,” said Tim Morland of River Collective, a Sacramento cannabis distributor.
But the state Senate Appropriations Committee is now considering a bill to charter a bank specifically for the industry.
The bill, SB-930, gained momentum in the legislature recently after the Trump administration indicated that it would not crack down on the legalized marijuana trade.
Cannabis businesses can work with local governments rushing to regulate the fledgling industry in their communities by educating them, said Meital Manzuri, a Beverly Hills attorney who represents cannabis businesses.
“We have other places (besides Ventura County) that have opened up, and the sky hasn’t fallen,” Manzuri said, noting that it takes time and commitment from a lot of different sources.
“They have to form some sort of grass-roots organization because there’s strength in numbers,” Manzuri said. She recommended getting as much support as possible from the industry and local business.
“Once they’ve formed a coalition, they can start lobbying and show officials that cannabis brings in money; that should be enough to get them interested,” said Manzuri. “We found out what was important to the City Council and worked with them on it.”
Education should come from the industry, Morland said, “so people don’t think you’re some badass trying to get rich.
“If you’re going to have it in your city,” Morland continued, “you’re going to want actors who follow the rules — a lot of the older players don’t care about the rules.”
Educating the community can also be important, said Max Simon, the CEO of Green Flower Media, a Ventura-based company whose website features hundreds of hours of video content from cannabis industry experts.
“I always joke, it’s the site people send their parents to” to get informed about cannabis, said Simon, who got involved in the trade as a medical marijuana user treating his ADHD.
“I was shocked how little information was out there. People just don’t understand how to get the most from what will be a $50 billion global industry,” said Simon.
The site (learngreenflower.com), whose content goes public and freely accessible on May 22, offers prospective cannabis entrepreneurs advice from doctors, scientists and other members of the industry.
California allows adults to buy and carry up to an ounce of marijuana for recreational use. The state also allows commercial growth and use; county and city boards can regulate both types of use.
Commercial growth was strictly limited to medical use until Jan. 1, 2018, when licenses for other types of cannabis businesses became available from the state.
A few other Ventura County cities have granted permits to dispensaries or are allowing delivery for medicinal purposes.
So far Port Hueneme is the only Ventura County city fully embracing the money making prospects of the cannabis industry.
Two dispensaries have opened since last year and two more are scheduled to open, with many more in the pipeline, said Port Hueneme City Councilman Jim Hensley.
“Many people have put $250 (thousand) to $500,000 into this,” said Hensley, adding the two-and-a-half square mile city is on the verge of having as many as a dozen dispensaries.
“That many dispensaries could be problematic,” said Hensley. “In a situation where there’s saturation, you could lose a lot of business.”
To accommodate the expected increase in traffic to the city, the city is considering Amsterdam-like cannabis clubs where people could socialize, with hotels or bed-and-breakfasts for them to stay in.
“It’s rather ridiculous to have that many shops come in, and there’s no place people can smoke,” said Hensley.
“So many of these people are going to visit us then head back home,” Hensley noted. “The important thing for our economy is to keep these people here.”