Pubdate: Sun, 20 Dec 2009
Source: Denver Post (CO)
Copyright: 2009 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: John Ingold, The Denver Post
Bookmark: http://www.mapinc.org/topic/dispensaries
Bookmark: http://www.mapinc.org/find?253 (Cannabis - Medicinal - United States)

MEDICAL POT DISPENSARIES GROWING AT A FAST CLIP

When Andy Cookston and his wife opened Denver's first 
medical-marijuana dispensary three years ago, they hung no sign 
outside their door.

They did no advertising; patients were drawn exclusively by word of 
mouth. They were unsure whether the state would even allow them to 
include their dispensary's full name -- Cannabis Medical Technology 
- -- on their business license because of its pot-tinged terminology.

Such modesty is no longer a concern.

"Now that the door's been cracked open," said Cookston, who also owns 
a graphics company, "people are rushing it."

Colorado's medical-marijuana industry -- just in its infancy -- is 
already in the throes of a dramatic change.

As tens of thousands of patients applied for medical-marijuana cards 
in the past six months, dozens of new dispensaries opened. The number 
of dispensaries -- in essence, shops where approved patients legally 
buy marijuana -- is likely more than 200 in Colorado, though no 
official tally exists.

And, even as new mom-and-pop dispensaries continue to open weekly, 
the money flooding into the industry has also attracted the interest 
of big players with big checkbooks. A 5,000- square-foot dispensary 
- -- billed as the largest in Denver -- recently opened just north of 
Invesco Field. Two powerhouse dispensaries from California are 
opening outposts in LoDo.

Offshoot Businesses Abound

Meanwhile, small-time dispensary owners have resorted to ever more 
adventurous business models to create a niche in a suddenly crowded 
marketplace. There are delivery-only dispensaries and dispensaries 
with hair stylists on site and one dispensary that claims to be the 
country's only medical-marijuana restaurant.

And this doesn't include the offshoot businesses that dispensary 
owners say have arisen around the cannabis industry -- including not 
just the paraphernalia and growing supply shops but also insurers, 
electricians, security firms, ventilation contractors, real estate 
agents and lawyers. One local bail bonds company took out an ad in 
the alternative magazine Westword's 64-page special medical-marijuana 
insert, offering a discount to people charged with marijuana-related crimes.

Commercial real estate for dispensaries now leases at a premium, 
several dispensary owners said. Warehouse space for marijuana-growing 
operations is even tighter.

"The average guy starting a storefront now, you definitely better 
have some legitimate business skills compared to what it used to be," 
Cookston said. "It's definitely getting harder."

Despite the harsher competition, dispensary owners remain a diverse 
set. Many, like Cookston, are patients themselves and longtime 
advocates of using marijuana for medical purposes.

Because dispensary owners remain largely cut off from traditional 
financing like bank loans, they must scrounge together all the money 
necessary to open their shops -- in most cases anywhere from $20,000 
to $50,000 -- on their own.

For Steve Horowitz, who used to sell promotional magnets to Realtors 
until the housing bust, that meant skipping the mortgage payment on 
his space for three months in order to come up with the cash to start 
a dispensary. Horowitz's creation -- the Ganja Gourmet, which serves 
marijuana-infused pizza, lasagna, hummus and desserts -- opened last 
week on South Broadway in Denver.

"I'm lucky I didn't run out of money before I opened this," he said.

Posting Ads for Investors

Pierre Werner -- a Nevada transplant who moved to Boulder earlier 
this year in search of a friendlier climate for medical-marijuana 
distribution after receiving three felony convictions on 
marijuana-related charges in his home state -- opened his Dr. Reefer 
dispensary on University Hill after posting ads to Craigslist seeking 
investors.

"I think everybody is throwing every last dollar and maxing out their 
credit cards and getting every kind of loan they can," Werner said of 
new dispensary owners.

Well, perhaps not everybody. In LoDo, at least two new dispensaries 
have the backing of major players from California's booming 
medical-marijuana industry. The Farmacy, at 14th and Market streets, 
is a branch of a dispensary chain with three shops in the Los Angeles 
area. Local Product, at 15th and Larimer streets, has the backing of 
Harborside Management Associates, a for-profit offshoot of the 
Harborside Health Center in Oakland, one of California's largest 
dispensaries with about $20 million in annual sales.

"It's David Versus Goliath"

Representatives from the two dispensaries did not respond to 
inquiries, but the Californians' entrance into Colorado has a number 
of local dispensary owners concerned.

"It's David versus Goliath," said Jason Irwin, the 27-year-old owner 
of Highland Health dispensary in Denver. "They didn't strong-arm 
their way in, but they have a blank checkbook."

In response, Irwin said, he plans to expand his business. The 
dispensary just completed the first harvest at its own growing 
operation in southern Colorado. Irwin said he hopes to build an even 
bigger growing operation soon, all to be overseen by his mother.

"When I was in high school, she used to flush my weed down the 
toilet," he said, marveling at her shift in attitude. "She was not 
cool with it."

Cannabis Medical's Cookston said the current growth will only help 
boost dispensaries' legitimacy, making them all the more entrenched 
in the community.

"It's all coming," he said. "It's like the sunrise. It's getting 
brighter and brighter." 
- ---
MAP posted-by: Richard Lake