Attempt to open new Breckenridge marijuana retail shop fizzles
September 21, 2016
After nearly nine months of fighting, Gabe Franklin's efforts to open a retail marijuana shop came to an abrupt halt this month. The turn of events underscores the difficulty of breaking into an increasingly established and narrowly regulated cannabis industry in Breckenridge.
Franklin purchased a medical marijuana license from Soul Shine Medical Consulting in March of 2015 with the hopes that he could convert the dispensary into a more-profitable retail business. But, first, he would need the Breckenridge Town Council to approve an ordinance allowing for such a change.
Currently, the town does not process any new applications for either medicinal or retail dispensaries. This means that if someone would like to open a new location, he must acquire a license that has already been issued. This moratorium on licenses was approved as a temporary measure in December of 2014, until the town council voted to make it permanent in May of this year.
The meant that even though Franklin wanted to run a retail marijuana store, his only option was to buy whatever license was available at the time.
During the town council work session on Sept. 13, the council decided to oppose the ordinance allowing for the license conversion, removing the item from the agenda of the meeting scheduled later that evening.
Franklin was shocked.
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"I've put everything I had for the last two years into making this happen," Franklin said. "Politically, it's hard to get anything done in this town when it comes to marijuana business."
Franklin said he has invested over $1 million in trying to open his business. Franklin said that the investment is now officially fruitless.
"The value of a medicinal dispensary is next to nothing," he said. "Nobody is getting medicinal licenses anymore."
Franklin said that medicinal stores lost their value as soon as recreational marijuana was legalized. He added that retail was a more lucrative business option because it isn't as expensive to start and has a lower barrier to entry for customers.
TRYING TO GET STARTED
In June 2015, Franklin lost the space he rented for his store. Part of obtaining a license is that you also take on the space originally associated with that license. The location of the shop, originally called Soul Shine, was on Airport Road. Known as the Green Mile, it's the one area set aside in Breckenridge zoning laws that allows for marijuana businesses. Franklin said he had been in talks with the landlord to renew the lease. However, the landlord decided on a different direction. The spot eventually went to Alpenglow Botanicals, another marijuana dispensary in Breckenridge, which already had the location next door to Franklin. Alpenglow expanded its business to include both storefronts.
After losing his lease, Franklin was thrown into a tight spot. Medical licenses require that you have a location to grow and cultivate the marijuana plants.
"I had to get my state license, not just the town license," he said. "(The state) wouldn't give me a license to convert because I didn't have an attached grow with my medical license."
However, Breckenridge's town clerk, Helen Cospolich, said that the plants do not have to be grown at the location specifically.
"It doesn't have to be in the same community," she said.
DOWN THE RABBIT HOLE
Since Franklin lost his preferred location, it also made things difficult for the town council when they scheduled to inspect the business to make sure it followed code. Some of these regulations include installing security cameras in and around the store. At the town council meeting earlier this month, Breckenridge police chief Dennis McLaughlin said he gave Franklin two weeks to comply with those standards. The problem was that the location they were inspecting was not the location from which Franklin intended to run his business.
After losing his original spot, Franklin rented a suite at 1800 Airport Road. Because he changed locations, Franklin had to pay a $500 fee with the town. Since licenses are valid for one year, he also had to pay the fee to renew, setting him back another $1,406.25. However, the new location did not work for medicinal purposes, because it did not have the space to grow marijuana. He planned on moving to a different address in the same area if he was able to transfer his license to retail. He did not feel that spending the money to have his current location comply with regulations "on a promise" was worthwhile.
"To do that with a location that may or may not open was a gamble," he said. "If I thought they were going to convert (the license), I would have spent the extra money to get it ready."
For Franklin, the struggle to simply open the doors of his business was becoming more and more complicated — and more expensive — by the day. He added that his efforts had left him "way, way, way in the hole." It was like going down the rabbit hole in Wonderland, which coincidentally was supposed to be the name of his shop: The Rabbit Hole.
THE WORK SESSION
At the work session, Franklin originally felt confident he could get the council's approval. He had met with some of the members, such as Jeffrey Bergeron and Erin Gigliello, to explain his situation, and felt they were sympathetic to his cause. But then, he was thrown a curveball.
Justin Williams, owner of Alpenglow Botanicals, was also present at the town meeting and voiced interest in converting their medicinal license, which is currently expired.
Cassie Williams, who is in charge of marketing and advertising for Alpenglow, said in an email that the company did not wish to comment.
The particular issue of other stores changing their licenses had not been brought to the council's attention before, and caused town manager Rick Holman to voice concern about others following suit. The rejected amendment would have allowed any store that maintains both a medicinal and a recreational license to convert their medicinal license. Cospolich said that the only current medicinal license outside of Franklin's is held by Organix. The company also has a retail license. In addition to Organix, Breckenridge has four registered retail licenses.
In the end, this caused the town council to change their views. Despite some council members being sympathetic to Franklin's issue, they ultimately opted against the amendment.
"I'm very sympathetic to (Franklin)," said Bergeron. "I don't think having one more (retail store) would do anything to hurt the business mix."
Bergeron was concerned, however, that if multiple license holders were able to open retail marijuana stores, it would hurt the diversity of business on Airport Road. His goal is to try and create a good balance in the area, avoiding what he called "Little Amsterdam."
Franklin said that, at this point, it's a "dead issue," and he will most likely let his medicinal license expire. However, Cospolich said that should he choose to keep his medicinal license, and try to open a store, he would need to meet with the Liquor and Marijuana Licensing Authority. The group only meets once a month, and their next meeting is scheduled for Oct. 18.
Franklin said he would like to stay in the marijuana industry as possibly a consultant for other states looking to legalize.
"The red tape and the liability has worn me out to the maximum," he said.
THE NEXT STEPS
The struggle may be over for Franklin, but the next question is, what happens to an expired license in Breckenridge?
According to Haynes, if a license expires, the holder has a 90-day grace period to renew. After that, the license is null and void. Cospolich said Alpenglow's license expired in November of 2015, effectively taking their license out of the market. She also added that this is new territory for the town.
"This is the first time we're dealing with situations where people let their licenses lapse," she said.
Franklin could potentially sell his license before it expires, but he said the return value would not cover his costs.
"The net value is not worth my time," he said.
If Franklin chooses to do nothing with his license, Breckenridge would permanently have one less medicinal license in the pool.