Cultivation

Outcomes vary for would-be Napa cannabis retailers

One group hoping to launch Napa’s market for medical cannabis hopes to open its doors by year’s end. Meanwhile, another would-be seller is seeing more than three years of effort put on hold.

In the 10 months since Napa opened a path for merchants to open medicinal marijuana dispensaries, planners have received seven applications to open storefronts within city limits. Three applicants have been granted certificates to sell smokable and edible cannabis products to customers with a doctor’s recommendation, according to records from the city Planning Division.

But the path to over-the-counter sales has not been as kind to other would-be sellers. Records indicate the city has turned away three proposed marijuana outlets at least partly due to parking and other issues — and even some sellers already established in the North Bay argue that Napa’s ordinance is at best a half-step that will set up its local market for failure unless the city also allows the sale of recreational cannabis, which California voters legalized by passing Proposition 64 in 2016.

Even within those limits, a handful of candidates have stepped up to try to establish the city’s first legal retail weed economy.

Among those in the running is The Higher Path, which intends to operate from a 650-square-foot space at 1963 Iroquois St. Pending a use permit and a city business license, the dispensary should welcome its first visitors by November, according to Jerred Kiloh, a partner in the dispensary, which is an outgrowth of The Higher Path in Sherman Oaks outside Los Angeles.

Napa’s Higher Path outlet likely will open with 17 to 20 employees and a target of reaching 200 to 300 customers per day, Kiloh said Tuesday, adding that the dispensary is expected to operate “every hour Napa allows us to” — 7 a.m. to 8 p.m. daily, according to the city’s cannabis retailing ordinance.

“When we look at Napa it’s one of the highest-revenue areas for tourism, and we feel it’s in our best interest to capitalize on that, whether (for) medical or recreational cannabis,” he said. “… Napa’s trying to bring younger demo into wine industry so it’s imperative Napa bring younger generation to table. I see it as complement to bringing more of the younger wine and cannabis users into Napa, and I think it’s great for both industries.”

While conceding that a city framework to legalize the sale of adult-use products would make life easier on dispensary owners, Kiloh described The Higher Path as well-positioned to work under Napa’s rules — in part because of its roots as a medically oriented outlet in Southern California. Despite voters’ 2016 approval of recreational marijuana sales, Kiloh’s dispensary — like others in Los Angeles — was not cleared to sell to those without doctor recommendations until Jan. 19.

While Kiloh’s Higher Path was building an audience in greater Los Angeles, Alicia Kelley was founding HerbaBuena in 2015 to market organically grown cannabis products. As Napa slowly progressed toward an ordinance to legalize medical marijuana sales — replacing an earlier ordinance it repealed in 2013 amid fears of clashing with the federal marijuana ban — the entrepreneur, who is also known as Alicia Rose, became a frequent advocate at city meetings for widening the therapeutic use of marijuana.

Despite her presence in Napa circles, however, Kelley has yet to gain the city’s clearance to do business.

Planning officials sent back HerbaBuena’s application citing inadequate parking at her proposed retail site, a commercial condominium at 20 Enterprise Court in south Napa. According to Kelley, her business was close to satisfying the city’s request by adding two more parking spaces at the site — until neighboring businesses intervened.

“There are three owners in the condo that also own units there, who needed to approve the two extra slots, and they voted it down,” she said Wednesday.

While Kelley conceded that Napa council members are unlikely to overhaul their cannabis ordinance less than a year after passing it, she pointed to the lack of legal recreational sales as a major roadblock to establishing a local market — as well as zoning rules that largely keep cannabis retailers to industrial and office-park areas and out of mainstream commercial areas.

“The two major issues with the way this ordinance as written is, one, they don’t allow adult-use licensing, which limits our ability to scale up, and two, they’ve relegated us to light industrial zoning which, by definition, will not have enough parking for a retail space,” she said.

Kelley’s concerns have been echoed by some sellers of marijuana products in Vallejo, the nearest legal market to the city of Napa.

“They are settling themselves up for failure; there’s not going to be a market for anyone to make any money” selling only to doctor-approved clients, Morgan Hannigan, owner of the Better Health Group dispensary in Vallejo, told the Napa Valley Register earlier this month.

California’s legalization of “adult-use” or non-medical marijuana products has apparently led to a strong focus on that section of the market, according to figures from the state Bureau of Cannabis Control. While 417 dispensaries have active state licenses, only 49 sell exclusively medicinal cannabis products.

Joining The Higher Path in gaining city dispensary certificates are Harvest of Napa, which plans to do business at 2441 Second St., and Korova Cannabis, which has filed to operate at 954 Kaiser Rd.

Joe Gerlach, listed as a consultant to Korova, declined comment in an email to the Register. Attempts to contact Harvest of Napa representatives were unsuccessful.

As to whether the advantage may go to the first mover into local marijuana sales, Kiloh expressed little concern about the timing of The Higher Path’s opening. “I think the cream will rise to the top,” he said, “no matter who’s first to market.”

As of Friday, The Higher Path had received a notice of intent to grant a cannabis-selling clearance but had not yet been granted the clearance itself, according to city assistant planner Jose Cortez.

This story has been modified since the original posting to correct the proposed retail address of Korova Cannabis, a medical marijuana dispensary that received a clearance to operate in the city of Napa.

© 2018 Napa Valley Register (Napa, Calif.). Visit the Napa Valley Register at www.napavalleyregister.com. Distributed by Tribune Content Agency, LLC.