San Diego reports brisk business during first month of recreational cannabis sales

San Diego cannabis retailers say the first month of recreational marijuana sales has been far stronger than expected, testing their ability to handle crowds and to deliver pot to people’s homes with the speed and efficiency of Amazon.

Retailers also say the sale of “adult use” marijuana — which began on January 1st — has led to a surge in older customers. Some want cannabis to ease medical conditions. Others just want to take the edge off.

“We’re getting a lot of soccer moms from Carmel Valley and Del Mar who are looking for an alternative to a glass of wine,” said Rocky Goyal, who founded the Apothokare marijuana stores in Kearny Mesa and Mission Valley.

Torrey Holistics employees, Matt Sullivan, left, and Taron McElroy, arrange jars of cannabis in San Diego, Calif., Thursday, Dec. 14, 2017. (AP Photo/Julie Watson)

None of the stores have released sales figures, which only have to be reported to the state on a quarterly basis. But retailers who run seven stores in San Diego told the Union-Tribune that demand has remained strong since January 1st, when long lines formed at dispensaries.

Will Senn, co-founder of Urbn Leaf, estimates that his store in Bay Park will pay the city at least $80,000 in local cannabis taxes for the month of January. The figure indicates that the store will do upward of $1.5 million in business this month, and that the figure could be far higher.

The store had 55 employees in December. Now, it has 220, roughly half of whom are delivery drivers. Senn also operates a store in the Stockton section of San Diego, and plans to open one in Middletown, near Little Italy.

“The amount or marijuana we’re selling in Bay Park is double what we expected,” Senn said. “A lot of people who are in their 50s, 60s and 70s who used to consume are coming back into the market now that cannabis is legal recreationally.

“We had four people in their 80s come here yesterday on the shuttle bus that we operate between the store and Ocean Beach.”

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Goyal said, “I didn’t expect this kind of increase. I thought that if you didn’t use recreational cannabis before January 1st you wouldn’t just wake up and say, ‘Now that it’s legal, I should do it.’ We’re getting a lot of first time users, and a lot of people who used to use cannabis, then stopped, and are now curious.”

Zach Lazarus, co-founder of A Green Alternative in Otay Mesa, says, “We’re getting recreational users who are also medical customers. They’re looking for help easing their pains.”

At Torrey Holistics in Sorrento Valley, “We still have lines of customers that begin about noon and which last on-and-off into the afternoon,” said Ruthie Edelson, the company’s marketing director.

The Mankind Cooperative in Miramar reports that there have been many days in January when the store has attracted more than 1,000 customers, many who were tourists.

Retailers say that many customers are surprised, and sometimes bewildered, by the wide array of cannabis products on the shelf. They can buy everything from the traditional flower to creams, drinks and food that have been infused with marijuana.

“We’re doing a lot of education when it comes to edibles because you can have a really bad experience if they aren’t used properly,” Goyal said. “We don’t want that to happen and have someone say, ‘Hey, this isn’t for me.’ It’s bad for the customer and bad for the industry. We’re teaching people about dosing.”

Retailers also must cope with extensive regulations that were put in place regarding the cultivation, testing, manufacture and sale of recreational marijuana and associated products.

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“No one in the industry has a clear sense on how to interpret large sections of the regulations, and we are all asking the (state) Bureau of Cannabis Control for clarification,” said Lincoln Fish, founder of Outco, a wholesaler that cultivates cannabis and sells medical marijuana at a site near El Cajon.

“For example, we are no longer allowed to give away cannabis, cannabis-infused products or accessories. While retail shops have adjusted to discounts instead of giveaways, it is a more difficult question for wholesalers, where it is virtually impossible to sell product without giving samples.”

The cannabis industry also struggles with the fact that while the possession and sale of marijuana was approved by California voters, it’s still illegal at the federal level. There was a collective gasp among retailers on January 4th when U.S. Attorney General Jeff Sessions announced that marijuana businesses would no longer enjoy the limited protections that they had during the Obama administration.

“Everybody paused when we heard that,” Senn said. “He could be posturing, or this could be a serious threat.”

The industry is moving ahead, and looking to expand the market, especially when it comes to when and where people are allowed to use marijuana.

“You cannot consume in public, you cannot smoke indoors (unless it’s private property), you cannot consume anything at special events in the city of San Diego, you cannot consume anywhere that has a liquor license,” said Dallin Young, executive director of the Association of Cannabis Professionals in San Diego.

“This leaves patients and customers with few options. Also, the state and local municipalities have made it incredibly difficult to organize events. The locations where consumption and retail sales would be allowed are very few and many are not allowing such events.

“Lastly, there is the matter of enforcement. Who is responsible for regulating each aspect of the new rules? This is something that we believe will develop over time.”

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