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Bicyclists and pedestrians pass Belmont Shore Natural Care, a dispensary raided as part of an investigation into seven medical marijuana stores allegedly controlled by a San Clemente resident.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

The home at right was allegedly used as a stash house in association with the Dana Point Safe Harbor Collective.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

The owner of this home in San Clemente is under investigation in relation to medical marijuana sales.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

Many pot shops are making big money, mostly in cash, even as they claim to be nonprofit entities.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

Bud tender Alex Cortez, right, sniffs a jar of medicinal marijuana for potency at the Avalon Wellness Center. Founder Valerie Crist said she has tried to follow the state's rules and "We're struggling just to make payroll."

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

Bud tender Alex Cortez fills an order for medical marijuana for a patient in the dispensary area of the Avalon Wellness Center.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

A patient's money sits on the counter as he waits for his order of medical marijuana at a dispensary in Southern California. Most medical pot patients pay cash.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

Bud tender Alex Cortez fills a prescription at the Avalon Wellness Center. The 8,000-square-foot building, which houses a cannabis cultivation and distribution center, is in an industrial neighborhood. Its remote location has forced the operators to offer deep discounts, and the center has been struggling.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

A bud tender shows a visitor a jar of medical marijuana available to patients at the Avalon Wellness Center.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

A grower examines a bud under a magnifying glass at a medical marijuana dispensary. Many pot shops are making big money even as they claim to be nonprofit. This has evoked the ire of law enforcement across the state, as well as federal authorities, who have said they will not tolerate retail marijuana sales.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

Avalon Wellness Center bud tender Loren Brazel waits for a patient to decide which strain of medical marijuana would be best to treat his ailment.

PHOTOGRAPH BY: Genaro Molina / Los Angeles Times

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Medical marijuana money

An entrepreneur looking to open a new marijuana store in downtown Los Angeles envisioned his business model in simple terms.

He would buy bags of buds from growers for about $3,200 a pound, divvy up the product and sell it over the counter for $15 for a gram – more than twice what he paid. Since even small dispensaries often sold a pound a day, he expected to make at least $3,000 a day in gross profit.

He’d pay a few employees $10 an hour. Rent and utilities should cost no more than $4,000 a month, advertising a little less. He would have to put a lawyer on retainer, buy furniture and install a security door and check-in window.

After all that, the 32-year-old former mortgage broker still thought he could clear half a million dollars his first year, easy.

Medical marijuana providers invariably present themselves to the public as “compassionate caregivers,” taking great risk for patients who are in turn asked only for “donations” and who would otherwise have few options to get their medicine.

But many pot shops have been making big money, sometimes extraordinary money, mostly in cash, even as they claim to be nonprofit. “I believe marijuana really helps people,” said the entrepreneur, who had owned a dispensary briefly before the city shut it down. “But no, I’m not doing this for free.” See story

6 Comments

  1. June 17, 2012, 1:41 am

    LINK

    I find it appalling not that the businesses are making money, but that the law is actually used to rip off sick people.

    At the root of it is that marijuana grown outdoors is more than likely not suitable for use as "medicine" for very sick people due to the ubiquitous presence of mold/fungus spores and insect droppings and parts. These are things you simply can't be rid of in agriculture. Of course, the often-untested presence of pest control agents and other agricultural chemicals is also of grave concern in what is essentially an illegal and unregulated business.

    Outdoors-grown marijuana should not be priced above the cost of other herbs, such as basil, oregano, or even dill. There is really no excuse for it. Compare the price of easily grown bud, then compare it with the price of a parallel food product – hemp seed. It's obvious that gouging is occurring.

    Indoor cultivation is an entirely different matter. ALL "medical" marijuana sold as indoors should be tested for mold and mildew, pesticides, and other contaminants. Grown only from seed from acceptable producers, and handled under pharmaceutical procedures.

    I also believe that indoor-produced marijuana should be taxed at a higher level than outdoor weed. The producers are using energy subsidized by taxpayers to produce their crop. Of course, there are ways to grow indoors using solar tubes, or greenhouses, but this is seldom the case, even in "sunny California."

    I have absolutely no problem with the state or federal government prosecuting and/or socially crucifying these people who steal from sick people who actually NEED the relief that voters approved and provided for them more than 15 years ago.

    By: Apostlethirteen

  2. June 17, 2012, 5:40 am

    LINK

    I think its ridiculous that the country is in recession and this mostly harmless substance is illegal in so many places. Everywhere its being sold the people selling it are making plenty of money. Why doesn’t the government tap into this like it does with ciggarettes and alcohol. Legalize it and tax the hell out of people.

    By: Jonnie

  3. June 17, 2012, 6:22 am

    LINK

    Sunkist is a non-profit agricultural co-operative organized under the laws of the State of California. Sunkist has over $1,000,000,000 (1 billion dollars) in annual revenue. http://sunkist.com/about/faqs.aspx#2

    Cedars-Sinai Hospital, located at San Vicente Blvd and Beverly Blvd is organized as a non-profit under the laws of California, and pockets over $7,000,000,000 (7 billion dollars) in annual revenue. http://cedars-sinai.edu/

    You say the fact that dispensaries operate mostly in cash means their not operating as non-profits? That argument might carry some weight if the Federal government didn't pressure banking organizations operating under Federal Chartered to close their accounts.

    By: Duncan20903

  4. June 19, 2012, 2:00 pm

    LINK

    All Medicinal Marijuana in shops are tested for any contaminants, before any shop is able to sell it to a patient. If it is harmful it would not be accepted by the shop.

    By: charlie

  5. June 24, 2012, 6:03 pm

    LINK

    This is the first set of articles I have read, regarding marijuana; its growers, its dealers (disguised with a new name, "dispensary" … I assume the 'shop owners' are called, "the dispenser" ), and its greedy opportunists.
    I can detect only one real difference the legalization of marijuana has made upon the way things were before. That difference being, the quality of the product is always guaranteed … with out a doubt. Users can rest assured that they will always be able to obtain high quality weed, to satisfy their habit for the rest of their lives. (as long as public sales shops remain legal and open)

    By: blsev

  6. May 22, 2013, 3:37 am

    LINK

    I think its absurd that the nation is in economic downturn and this mostly safe material is unlawful in so many locations. Everywhere its being marketed the individuals promoting it are creating a lot of cash. Why doesn't the govt tap into this like it does with ciggarettes and liquor. Legalize it and tax the terrible out of individuals.
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    By: Timothy Shehan

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