Changes to Pasadena’s retail cannabis process, which opened in 2018 and fashioned as a race to land one of the handful of permits first, could be imminent as the City Council is set to discuss new regulations for the growing industry.
Specifically, the council will consider allowing up to three dispensaries per district — currently only one is allowed per district — and decreasing the required buffer between cannabis retailers from 1,000 to 450 feet.
A social equity component, which would factor in such considerations as local residency, existing annual income and whether or not an applicant has been harmed by past drug policy, could also be on the table. Such a move would have consequences for a number of prospective cannabis operators, including Craig Fry, whose company The Brick & Rose Inc. finished on the fringe of the city’s scoring system used to rank applicants.
One company’s journey
Having never smoked weed in his 59 years on earth, Fry isn’t your typical cannabis applicant.
“My position, my ignorance, I should say, prior to learning more about it, was an image of those guys in high school that were smoking it at the end of the parking lot, and I thought they were a bunch of dummies,” Fry said in an interview last week.
But his opinion changed when his wife suffered a serious infection a few years ago, he said.
“I got a phone call when she went to visit her parents from a doctor up in Oregon saying, ‘Hey, your wife is not going to make it through the night.’”
His wife miraculously survived, but while in recovery she was prescribed a number of opioids that had the couple worried about the onset of addiction.
“So, one of our clients here said to give her some CBD (a chemical in marijuana). And I thought, no, no, that’s not good stuff. But I got to be honest with you,” Fry said, “within three weeks, she was taking the CBD without the opioids and within two months she wasn’t even taking the CBD.
“So, for me, I look at it as much more than somebody walking around smoking pot. I look at the other benefits of it.”
Today Fry is immersed in the world of cannabis alongside his business partner Larry Mondragon. Rather than operate dispensaries themselves, they have built a practice that helps clients with their cannabis-related needs throughout the region, especially as they make their way through their respective permitting processes.
Throwing their own hat
“We’ve been successful in some of the most competitive contests in the state where we had many multistate operators who were very well funded coming in to claim a stake,” Mondragon said. “And with a small team, we were going head-to-head and getting our clients permits under the most difficult circumstances.”
So when an opportunity to open a storefront in their own backyard arose, “we said, ‘We’ve been very successful in advocating for other; let’s throw our hat into the ring and let’s see what we can do to help because this is our community,’” Mondragon said.
Ultimately, The Brick & Rose finished seventh in the application process, and current regulations only allow six retailers. So the pair has been on the outside looking in, even though a single point separated Fry and Mondragon from MedMen.
“I’m not a major corporation. I don’t have billions of dollars backing me from a foreign business, but I do know one of the areas that was graded was the financials. And I know I had proven I could run a business,” Fry said.
“But I think when the graders looked at me, they thought I was a nobody — all while I’m scrounging through my couch for change to make us look as good as we can on the application — and I know that if I would have had $3 million more in my account, then we would have got the extra two points, and we would have been ahead of these companies.”
Stirring the Pot
It’s water under the bridge now for The Brick & Rose, who after the partners’ fair share of crying in the office went back to work helping one of the top six applicants secure the elusive cannabis operating permit.
Fry and Mondragon are not the only ones who were affected by the scoring, and many who were involved in the process, such as Tim Dodd, co-founder and CEO of dispensary operator Sweet Flower, have been vocal about the need for a new system that involves a social equity component.
City Councilman Tyron Hampton has also been critical of Pasadena’s scoring process, which he believes favored national cannabis operators.
As chair of the committee that voted 3-0 to have council members consider loosening its stringent cannabis rules, Hampton said this week he definitely supports the creation of a social equity program and believes it could be finalized within six or seven months after securing council’s approval.
Not everybody feels similarly, though, as some members of the City Council repeatedly have said they will oppose anything that sways from the will of the voters, who in 2018 approved Measure CC, which allowed one marijuana dispensary in each council district so long as they adhered to strict requirements to physically separate them.
Still, Fry and Mondragon are hopeful they will replace MedMen as the city’s sixth operator, especially considering the latter’s doors remain unopened and its ownership has changed hands, but they won’t hold their breath because it’s taken years to sort through the litany of litigation surrounding the city’s cannabis process.
“That being said, it’s important to also say that the city needs to absolutely turn its attention to putting together a social equity program,” Mondragon said, “not just for one deserving company, but we believe that there is room, both commercially and in terms of what the will of the people is.”
A program of Pasadena’s own
Members of the Economic Development and Technology Committee mostly agreed during a July meeting when they shared excitement about the prospect of a program that would offer communities of color a chance to pry a slice of the cannabis pie from corporate interests.
The group, however, could not agree on timing nor the specifics of who should participate in the program, so the discussion was handed off to council members.
Last time the subject arose, advocates called for the consideration of a “Cannabis Equity Permit Program,” which would require that cannabis applicants be Pasadena residents at the time permits are issued and onsite staff comprise at least 50% Pasadena residents — with 25% living in census tracts identified as having high unemployment rates or low household incomes.
Mondragon and Fry can envision themselves supporting a similar system so long as it does not mirror the city of Los Angeles’, where applicants had to have already leased or owned space when applying to operate.
As a result that requirement, Mondragon said, “many social equity applicants, who didn’t have great funds or who were largely being capitalized by friends and family or mortgages on their own homes, were forced to pay thousands of dollars in rent before the city ever got its program off the ground.”
This is one reason why Mondragon and Fry have publicly voiced support for a program that would pair a larger company with a social equity operator, so the partners can share resources like training, space or even capital.
Meanwhile, should a social equity program ever find its way to Pasadena, The Brick & Rose advocates about the possibility of hosting a series of workshops on topics such as marketing, distribution and the details of the highly regulated industry.
“It’s one thing to give somebody who’s been punished by the war on drugs and really hasn’t had an opportunity to participate in the riches of this cannabis program an opportunity to get a permit. It’s another to help them become successful,” Mondragon said.
“And this proposal is great because, while they’re going through the process, they can work with us and learn, because by the time they develop the guidelines and the criteria, it’s going to be two years before they open up the applications and find the social equity person,” Fry said. “In the meantime, we could open up and show them exactly how a small business can take hold in the community.”
Black market competition
In reality, the competition isn’t between two approved retailers, according to Mondragon.
“So much thought and so much focus has gone towards should there be 1,000 feet between retailers or 450 feet between retailers. That’s a false choice,” Mondragon added. “The choice right now is between marijuana that is legal and marijuana that is unlawfully sold.
“That is the real problem because there is a black market that that overshadows anything that is legal in Pasadena, and it will remain that way until there are numerous stores where cannabis can be lawfully purchased open and become accessible.”
And while he doesn’t think he’ll ever know what it feels like to smoke marijuana, Fry said it’s OK because he gets a high off being a public servant and helping those in the community who have been affected by the fight to illegalize it.
“We aren’t funded by billionaires, we’re not a conglomerate. And when we talk about social equity, I think we really fit that bill because we talk about setting up college funds, we talk about helping at-risk kids, and we want to set up a pension that’s going to give local people a stake in their work so they can take pride in being here for 20 years,” Fry said. “We were part of this community long before these others, and we’re going to continue to be here.
“We would like to be that incubator that will take these people from the lesser income parts of the city, people that have been jailed for whatever reason, and give them that opportunity to change their lives.”