Budtender Dylan Lun helps a patient at Buddy's Cannabis, Thursday, Dec. 14, 2017, in San Jose, Calif. Buddy's received the first 'microbusiness' license to sell recreational marijuana. (Karl Mondon/Bay Area News Group)

San Jose, Santa Cruz businesses among first to get state’s cannabis licenses

Two marijuana businesses in the greater Bay Area are among the first in the state to be granted licenses to sell recreational pot.

Buddy’s Cannabis in San Jose and KindPeoples in Santa Cruz are stocking their shelves in anticipation of New Year’s Day sales of products ranging from simple $5 “pre-rolls” to elite $280-an-ounce packages of weed.

Xavier Sanchez tends to the grow room at Buddy’s Cannabis, Thursday, Dec. 14, 2017, in San Jose, Calif. Buddy’s received the state’s first “microbusiness” license to sell recreational marijuana. (Karl Mondon/Bay Area News Group)

“It is a life’s dream come true,” said Matt Lucero, owner of Buddy’s, whose business received the first “microbusiness” license — numbered “0000001” — in the state.

Possession, personal cultivation and consumption of recreational marijuana by adults has been legal since passage of Proposition 64 in November 2016.  But it’s been illegal to buy and sell it.

Starting Jan. 1,  cannabis for recreational use will be legally sold and taxed at highly regulated retail outlets.

The two businesses are among the 20 enterprises given licenses Thursday by the state’s Bureau of Cannabis Control to retailers, distributors, microbusinesses and testing laboratories.

Lori Ajax, chief of the California’s Bureau of Cannabis Control, poses with the first marijuana business license issued in California. The license went to Moxie seed and extracts company. (Courtesy of the Bureau of Cannabis Control)

Many more licenses will be issued in the coming weeks, according to the Lori Ajax, the state’s first marijuana czar.

The bureau’s online licensing system was just opened last week — and both Buddy’s and KindPeoples  were among the first in line for what are expected to be an explosion of applications.

Despite the passage of the statewide ballot measure, California cities and counties still have the power to ban sales and cultivation within their borders. An estimated 72 percent of the state’s municipalities have so far refused to allow recreational marijuana businesses — many of them saying there simply hasn’t been enough time to prepare.

But San Jose and Santa Cruz have regulated medical marijuana for years. So they just tweaked their ordinances to regulate recreational marijuana. And the cities were quick to issue permits, as required by the state. As a result, their businesses were among the first in line and won speedy state approval.

“We are delighted that both the city and county of Santa Cruz stood behind us all these years,” said Khalil Moutawakkil, co-founder of KindPeoples, a decorated warehouse located in a former motorcycle repair shop on the industrial edge of Santa Cruz.

On Thursday afternoon, his team popped champagne bottles in celebration. It received eight of the first 20 licenses for the distribution and retail sales of both recreational and medical marijuana, as well as a designated “microbusiness” license that also allows them to engage in cultivation and  manufacturing.

Budtenders Dylan Lun and Emmett Schade work the front desk at Buddy’s Cannabis, Thursday, Dec. 14, 2017, in San Jose, Calif. Buddy’s received the very first state “microbusiness” license to sell recreational marijuana. (Karl Mondon/Bay Area News Group)

“We consider both the city and county to be our partners,” Moutawakkil said. “We pay taxes to them — and in return we get realistic ordinances in order to operate.”

Buddy’s Cannabis, in business as a medical dispensary since April 2010, has a long track record. After being kicked out of Mountain View and Sunnyvale, it moved to San Jose.  It was the first dispensary to be approved in San Jose, Lucero said.

 “The city of San Jose took the time to invest in us,” he said.

 The businesses have received just a temporary license, valid for 120 days, which can be extended for 90 days. They must still apply for an annual license, the requirements of which are more stringent.

 Among other requirements, they had to prove that they have security guards and take other crime-prevention measures. They must be located at least 600 feet away from schools and child care facilities.  And they must make sure customers are 21 or older. All marijuana products must be in child-resistant containers.

Both businesses will sell to both recreational and medicinal customers. Recreational customers can buy up to one ounce of “flowers” a day, plus eight grams of concentrate.  Medical  customers can buy a lot more.  Medical customers also pay lower taxes.

More than 200 applications have been submitted statewide, according to the Bureau of Cannabis Control.

​Because cannabis is illegal under federal law, banks cannot serve the businesses.  But the state Department of Tax and Fee Administration is creating offices that will be available to accept sales and excise tax payments in cash.

“I’m not celebrating yet. That time will come,” said Lucero, an attorney. “Twelve hours a day, I’m reading regulations.”


Here’s a list of the first 20 licenses awarded by the Bureau of Cannabis Control:

  1. Moxie (doing business locally as Pure CA) for medical distribution out of Lynwood
  2. Moxie for recreational distribution out of Lynwood
  3. Buddy’s Cannabis for a medical microbusiness in San Jose
  4. HERBL Distribution Solutions for medical distribution out of Santa Rosa
  5. Buddy’s Cannabis for a recreational microbusiness in San Jose
  6. Golden State Services for medical distribution out of King City
  7. pH Solutions (doing business locally as Yes) for lab testing in Monrovia
  8. Torrey Holistics for medical retail in San Diego
  9. KindPeoples medical distribution out of Santa Cruz
  10. KindPeoples for recreational distribution out of Santa Cruz
  11. Torrey Holistics for recreational retail in San Diego
  12. KindPeoples for medical retail in Santa Cruz
  13. KindPeoples for recreational retail in Santa Cruz
  14. KindPeoples a medical microbusiness in Santa Cruz
  15. KindPeoples for a recreational microbusiness in Santa Cruz
  16. KindPeoples for another medical retail shop in Santa Cruz
  17. KindPeoples for another recreational retail store in Santa Cruz
  18. Hueneme Patient Consumer Coop for a medical store in Port Hueneme
  19. 530 Cannabis for a recreational retail shop in Shasta Lake
  20. 530 Cannabis for a medical retail shop in Shasta Lake

A list of the eight companies awarded manufacturing licenses wasn’t available Thursday.

Cultivators will soon be able to apply for licenses through the Department of Food and Agriculture’s CalCannabis division — possibly starting next week.

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