Police and city staff are taking a close look at a business application to open the county’s first medical marijuana dispensary in north Gilroy.
City staff are researching the legality of such a business, which could land at 1207 First St. near Togo’s and First Street Coffee. Medical marijuana is allowed – tacitly or overtly – at the state and local level, but prohibited at the federal level. Proponents, including many Gilroy residents, say the dispensary will increase tax revenue and decrease crime while providing a service to people with debilitating ailments. However, police wonder if the business won’t increase crime in the area and city staff are concerned it will set them up for trouble with the federal government.
The application was filed by Batzi Kuburovich, a Morgan Hill realtor and resident who plans to move to Gilroy next month. Kuburovich, 48, said he was inspired to open a medical marijuana business after watching his father – who died in 2005 – struggle with pain and weight loss from prostate cancer that only marijuana could relieve. Kuburovich will partner with fellow realtor Neil Forrest, 56, who worked with Kuburovich at Century 21 Premier in Morgan Hill several years ago. Together, the pair later formed Cornerstone Commercial Real Estate Services in Morgan Hill.
“I just want to dignify this practice while also reducing local crime and increasing tax revenue and local employment opportunities,” Kuburovich said.
Armed with a binder bulging with statistics and a crisp, quick-talking demeanor that belies his pot-selling ambitions, Kuburovich applied to open MediLeaf last week. He envisions a clean, tight-run operation with staff who will only sell dried marijuana leaves – no brownies, suckers or other “edibles” regulated by health officials. At least two security guards will screen people entering a closed foyer, and an “open-door policy” with police will emphasize that Kuburovich has no stomach for people who feign symptoms to acquire prescriptions that they then use to buy legal marijuana to sell on the streets, he said.
However, city staff are still weighing the legal situation before they sign off on anything.
The Gilroy Municipal Code does not prohibit such dispensaries, Santa Clara County has no laws on the matter, and in August 2008 California Attorney Edmund Jerry Brown wrote that “properly organized and operated” dispensaries “may be lawful” under state law. Still, the Gilroy Police Department has yet to sign off on the application, and City Administrator Tom Haglund said staff is researching restrictive federal drug laws. However, since his election, President Barack Obama has directed the Drug Enforcement Agency to relax raids on dispensaries and smoke shops that were more common under the previous administration.
In his written opinion last year, Brown also cited state laws that said dispensaries “are not organized to make a profit for themselves … but primarily for their members as patrons.”
Kuburovich and Forrest said other state dispensaries would not divulge their business models or profit margins.
“Everybody has been highly confidential and won’t divulge their numbers, and as far as our profits go, I really didn’t calculate grand numbers,” Kuburovich said.
The city council does not typically vote on business applications, but council members could pass an ordinance regulating the medical marijuana industry here.
All this is fairly new to the Gilroy Police Department, but Sgt. Chad Gallicinao said, “This does concern me as a law enforcement officer … The community was concerned about the possibility of a strip club going in a while back. I’m not sure how they’ll react to the possibility of a medical marijuana dispensary moving in.”
A sampling of residents did not return the same outrage as seen with the strip club, which one entrepreneur proposed for a building near Home Depot in northeast Gilroy earlier this year before shopping center restrictions killed the project.
“Selling (marijuana) in a store won’t make it more readily available,” said Laura Case, a middle-aged Gilroy resident of 12 years and a mother of two. “Plus, if we tax it, that’s one more source of income – and right now, we really need that.”
“Hey, why the hell not? Liquor’s worse for you than marijuana or tobacco, and a lot of my friends use it. What the hell?” said Anthony Montez, an 86-year-old resident at Wheeler Manor in central Gilroy.
A 2005 Gallup poll showed 78 percent of adults were of similar opinion as Montez. In 1996, 56 percent of California voters approved Proposition 215, which allowed patients using medical marijuana under a doctor’s supervision to be free of criminal prosecution.
Currently, residents who have legitimate prescriptions have to drive to Redwood City, Millbrae, Oakland, San Francisco or Santa Cruz to purchase medical marijuana, which dispensaries buy from private, licensed growers who usually sell a pound for $3,500 to $4,000, Kuburovich said. A store-bought ounce, in turn, goes for about $400 – or about $6,400 per pound – excluding the extra $37 per ounce for taxes. Any profit will pay off overhead, said Kuburovich. Legal leaves come in all types, similar to tea, and are typically bottled in orange plastic vials.
Kuburovich and Forrest chose Gilroy over, say, San Jose because the duo said they know more people here and wanted to start their business close to home. They are also relying on their own capital and are not looking for investors yet, they said.
Local organizations that deal with crime, substance abuse and its effects were quiet on the proposal. Erin O’Brien, president and chief executive officer of Community Solutions, said she had not heard about the dispensary and needed more details before commenting. Dina Campeau, strategic coordinator for South County Collaborative, echoed O’Brien.
Business owners in the targeted First Street shopping center – where four shops have closed in the last six months – seemed to welcome the idea – especially Hank Provost of Simply Romance. Provost – who had a marijuana prescription in 2006 for his arthritis that he did not renew – opened his erotic novelty store in 1997 after an uphill battle with the city. Now, even city officials visit his “classy” operation, he said.
“I was trying to raise the bar back then, too, and I fell like this is the same type of thing,” Provost said.
Kuburovich – who used medical marijuana last year to relieve the “knives in his stomach” from an unknown illness that a specialist couldn’t figure out – and Forrest, who has also smoked marijuana, said they are ready to fight for their business rights.
“We’re used to working within the system,” Forrest said. “A lot of what we’re dealing with here is ignorance and stigmas.”
By Chris Bone