Cultivating Positivity: The Benefits of Cannabis in Communities
We’ve round up key takeaways from our latest “Cannabis is a Good Neighbor” podcast episode featuring Jay Czarkowski of Canna Advisor. This episode focused on the positive impact of cannabis operations on a community. Learn about the benefits a cannabis operation brings to a community and insights on which states are currently on our radar below!
- Over time, people will begin to see the benefits of allowing cannabis operators into the community. Cannabis operations bring employment opportunities, traffic to the dispensary will drive business to the surrounding shops, increased security, and community outreach programs.
- Allowing cannabis operations into a community will revitalize run-down buildings into an excellent space and bring them up to ADA standards.
- Cannabis facilities are required to have a high-level security system. Cannabis facilities require renovations, such as the addition of external lights and surveillance cameras to meet standards. The increased security turns a shady spot into a secure area where security did not exist.
- A common misconception is that street drug dealers will park at dispensaries with the intent to intercept customers before they walk into the dispensary to give them a better deal. This scenario is nearly impossible due to the level of security with external lights and cameras.
- Cannabis operations bring job opportunities to communities. Dispensaries have a variety of employment positions, from budtender, to manager, to fulfillment, and so on. These jobs are interesting, hands-on, and engaging. It is important to recognize the gratification of working at a dispensary due to the significant wellness component. Employees provide customers a vital service by assisting and educating consumers about products. Knowledgeable staff members are especially important for medical patients as they can assist customers in finding products to remedy their ailments.
- Certain states and municipalities require cannabis business plans to include community outreach. Often this takes shape in the form of job opportunities for minorities, the LGBTQ community, veterans, those affected by the war on drugs and such. Cannabis operators do not want to anger the community where they are operating. They want communities to benefit from the business, therefore it is critical for operations to proactively reach out to the local community and provide services to the community. Community outreach fosters a relationship between the business and the community, opening a communication channel between the two. If folks in the community have an issue with the dispensary, they will feel more comfortable addressing it with the owner before taking further action.
- Operators are getting more serious about building clean, GMP-level facilities when entering the business. Implementing high standards in the facility design will be valuable when thinking about an exit strategy. If a larger company is interested in purchasing a cannabis operation, they will not want to purchase an ill-equipped, ill-designed business. Building a facility right the first time is beneficial for the operation’s short- and long-term success.
- It is an unfortunate reality that medical marijuana patients, in some states, must travel long distances to purchase their medicine when they should be able to drive downtown to purchase.
Predictions by State
Northeast – In the Northeast, this is a new, developing industry. It will grow in a regulated way where compliance will be at the forefront of people’s minds. The Northeast, as a whole, has about the same number of people as the population of the West Coast. The Northeast is full of innovation and expertise in branding, product development, marketing expertise. The Northeast may set the standard for cannabis operations. The Northeast could become the epicenter of the cannabis industry nationally and maybe even globally. In places such as New York or New Jersey that have just recently come online, retail locations may experience resistance from local municipalities at first due to the fear of the unknown. These states will begin to put new pressure on how cannabis is regulated and administered, potentially aligning with the drug manufacturing industry.
California – The cannabis space here is far less regulated, it has been in the ‘wild west’ phase for generations.
Alabama – The application process will begin at the beginning of 2022. The application process is predicted to be competitive.
North Carolina, South Carolina, Texas – The conversation around cannabis is happening.
“The success of my business is dependent, to some degree, on limited licensing. When licenses are highly competitive, that’s when folks come to us. That said, because it is the right thing to do, I will always stand up for an open program because it gives everyone a chance to compete. It allows the brand new, mom-and-pop entrant to compete against a well-capitalized group. If a new entrant could come in and do it better – this was my philosophy back then- if someone could do it better than me, better price, better service than they deserve the business, and that’s how it should be. I think everyone should have a chance to get into this industry, let the cream rise to the top. That’s the American way.”
Cannabis is a Good Neighbor: Employment Transcript
Below is a transcript of the podcast episode, which you can listen to in full here, edited and trimmed for clarity and brevity.
BRIAN ANDERSON: Welcome to podcast number 4 of cannabis is a good neighbor. For those of you who are joining us for the first time, I am Brian Anderson, principal of Anderson Porter Design, cannabis industry architects, and our theme is cannabis is a good neighbor. Really excited to be talking to Jay Czarkowski of Canna Advisor, a fellow Connecticut native, which is really cool, but Canna Advisor is out in Colorado. Jay, take it away, introduce yourself, give us some background, and we will dive into some questions.
JAY CZARKOWSKI: Brian, it is great to be here on the podcast. Jay Czarkowski, Canna Advisor, Boulder Colorado. Prior to the cannabis industry, I was involved in construction and real estate development. We started that business in the early 2000s, all the way through the boom and bust. We went into cannabis in 2009, it was somewhat by accident, again the great recession of 2008 was settling in for the long haul it seemed. So, we were closing down our construction and real estate office in downtown Boulder Colorado and put our little building up for lease. Groups of young folks started approaching us wanting to lease our building for what they said was a medical marijuana dispensary. I had never heard of such a thing, but I looked into it. It took about 2 weeks to convince my wife, Diane, that we needed to do this. And that is how we jumped in. We opened one of the first dispensaries in 2009 before rules or regulations, back when it was the wild west, I had four grow operations there shortly after as well. Fast forward to 2021, we have been running a company called Canna Advisors. We are coming up on our 10th year, the majority of what we do is competitive application work across the country.
B: So, Jay, we in fact, met in 2015 in Vegas, and we [APD] have been, as architects, working with Canna Advisor in competitive states where real estate is at play. So, you and I have developed a relationship where we are one of the probably many architects that work with you to develop plans for retail. One of the things that’s interesting about retail that fits with this podcast, cannabis is a good neighbor, retail comes into neighborhoods – for example, Ohio, they are opening something like 72 dispensaries. So, all these cities are opening applications and retail is moving in. When you look at these retail facilities, one of the things that I think is misunderstood is the economic impact of retail on jobs and revitalization. You come from a construction background, retail moves into these facilities and revitalize these buildings, bringing them up to ADA standards which they were not before. What are some of your experiences in the impact of this level of licensing and revitalization?
J: Sure. Real estate and neighborhood benefits are positive across the board. If I think back on all my years in the industry, I have seen the cannabis industry and dispensary licensees take run-down properties and turn them into beautiful fixed-up, very attractive properties.
B: So, another aspect that is heavy on the mind of legislators is security. One of the things that comes with any renovation is suddenly we are adding lights and external cameras. It kind of flies into the face of opposition of ‘well if you bring cannabis into our neighborhood, we are going to have drug deals in the parking lots’. I think the opposite is really proven to be true. These places are just mundane and familiar places such as a liquor store or grocery store, it works into people’s routines, it does not noticeably affect traffic. They are good neighbors in that way.
J: This is definitely true. I recall a very early city council meeting in Connecticut once upon a time when we were going for our first competitive, out-of-state licenses. One of the folks that was there, probably from the town, you know people’s minds go into strange places when they are facing something they do not understand, and that fear begins to creep in. This person had that exact fear you mentioned. They were certain that there would be drug dealers in the parking lot of the dispensary with intent to intercept medical marijuana patients before they walked into the store to give them a better deal, that was the person’s concern. And certainly, to your point, with lights, cameras, and potentially security folks on the premise, it turns that dark spot in the neighborhood into a neighborhood security center.
B: And some of the other follow-on things that a city council begins to realize are jobs. If a 2,000 sqft store opens, let’s talk about the impact of that. How many jobs is that? Say there are 5 or 6 budtenders, a store manager, security personnel, floor personnel, ordering manager. That’s about 10 jobs right there.
J: It is a dozen or more jobs at least, and interesting jobs, with people interaction and jobs that really foster a person feeling good about what they are doing because whether it’s for medical or adult use, let’s face it, even for adult use there is a massive wellness component there. The folks that work at a dispensary are doing a good thing and providing such an important service.
B: Now you write license applications. I know in many competitive states, there are things called ‘social impact statements’ where an applicant to enter a community is pledging to, for example, to hire a certain number of staff from communities. We have seen pledges to hire a certain number of veterans. What are some of the things companies are doing for social equity, hiring practices, or business practices?
J: Certainly, in certain states and municipalities, they will be more inclined to give certain folks business licenses if they have a good feeling and have the assurance that this business is going to help the local community, people of color, people who have been impacted by the war on drugs, disabled veterans, veterans, across the board. I will even take that a step forward, the good folks Kayvan and Ian over at Denver Relief, this is many, many years ago, but as far as I can remember, they were the first group to go beyond that and proactively reach out to the local community and provide services to the community. They repaired wheelchairs for free, free bike repairs, garbage pick-up in the neighborhood on the occasional basis. They really reached out and did a lot for their local community, state involved, really important. They made sure the folks around them knew who they were and how to get in touch with them so that if there ever was a problem, folks could approach the dispensary owners before taking any action that could be troublesome.
B: Yeah, those are neat stories. I have seen applicants and employers host job fairs, they take a weekend to go to a high school, they’ll host job fairs to meet demand. Jobs aren’t scarce right now, but staffing is. I know here where I am in New England, and a lot of the tourist places consume such large numbers of employees. Have you seen any impacts or lack of employees? A leveling off of the interest in a cannabis job?
J: That’s a great question, and honestly, I do not know regarding the cannabis industry in those positions. I know in my town of Boulder, Colorado and there are so many jobs available. I know this because I have a 16-year-old daughter, and every single 1 is employed which is pretty rare. There are so many small businesses hurting for employees, and maybe that’s because all the local employees who formally worked at restaurants are working in the cannabis industry now. I know Canna Advisor has been a hiring frenzy, and it’s been a slog. There haven’t been as many applicants as in the past, we have been lucky to find good people. But the overall consensus is there are certainly lots of jobs available out there.
B: That is an interesting angle because it makes me think of my own business. So, to hear you have been on a hiring frenzy over the past few months, my company has doubled in size since February 2020, the pandemic hit March 2020 to meet demand because nobody stopped smoking weed over the pandemic. So, the cannabis industry, in a way, has continued to grow and develop. My company has had to double our staff to meet the demand as states like Ohio come on. We are doing 15 applications today for Ohio, New York is opening up, Michigan continues to thrive. How has this impacted you and your business?
J: So, things were slow for Canna Advisor during the pandemic because, I say this a lot for better or worse, we have maintained our fairly narrow focus and really just mostly do competitive application work. The pandemic slowed a lot of those new legalization initiatives down. Now the good news is, the last 18 months are in our rearview mirror, so many of these new programs that were supposed to develop a year and a half, a year, 6 months ago, they are all backed up now and are all starting to move forward now. So, we expect at least the next 2 to 3 years to be extremely busy on the license and business development side.
B: What are some of the new states you see that people could look out for, or people in those states listening to this may tune themselves into?
J: I am going to mention the Northeast. The Northeast is huge. If I think about all the people that are just in New York, New Jersey, Pennsylvania, that’s as many people as the state of California. Throw in Maryland, Massachusetts, and Connecticut. You match the population of the west coast. I am going to go off on a little bit of a tangent, but I will be short and try and keep it to the point. California is a strange industry, and as a general rule, I don’t do a lot of business in California. Mainly because it’s been the wild west out there not just for a year like it was in Colorado, but it’s been the wild west out there for generations. A lot of cowboys out there still, which is ok, I’m a cowboy too. But when I look at the Northeast when it’s a new industry developing from scratch, it’s going to be developed in a regulated way where compliance is going to be at the forefront of people’s minds, and I look at all the financial expertise that exists in that part of the country, the branding, product development, marketing expertise. I really believe the Northeast is going to become the epicenter of the industry nationally and possibly one day globally. Northeast aside, Alabama, believe it or not, is going to have a truly competitive application process at the beginning of the year. It’s great to see some more action in the deep south. Florida is poised to issue some more licenses in the next few months.
B: Do you have any predictions on the southeast Atlantic states? The Carolinas, Georgia? I know Georgia had an application process where you and I collaborated back in December.
J: The Carolinas are always talking about it; I’ve seen it on the news. South Carolina, North Carolina, Tennessee, it’s going to happen one day. And I will further mention, Georgia, sure they had an application process, they issued a few licenses but just like New York, New York has had a medical program for about 5 years, 6 years, they issued 5 licenses for a state of 20 million people. You know, all these states that have a “cannabis program” are tiny, and they are a fraction of the potential they could become.
B: We also have our eyes set on New York and New Jersey. I think this next wave of eastern states, as you put it, is going to begin to put new scrutiny on how cannabis is regulated and how it is administered. I say that relative to the treatment of cannabis as a drug manufacturing industry. So, we are looking ahead. A lot of the tension on the facilities in which manufacturing happens and the level in which the facilities are designed is where I’m seeing a heavy impact in the northeast. New England’s reputation of being sort of stade and business has also developed a lot of very old industry, established industry protocols. That are very different from California and Colorado, not that those businesses don’t operate completely, but like, for example, coca-cola. I’m thinking of established food industry or beverage industries, institutional investors haven’t really come into the cannabis space. What I’m looking for is to see whether your radar is showing experienced institutional investors coming into the cannabis space, and whether the east coast states will have a new round of scrutiny and level of attention and seeing cannabis as a drug manufacturing not just as a fringe operation.
J: Certainly, I do believe as these larger, more professional businesses continue to develop in the Northeast I think they will attract a lot of attention from those drug manufacturers from those mainstream funds and institutions. Currently, some of that is going on, some of the better cannabis companies are raising or gaining some debt equity for more mainstream financial institutions, it certainly the exception. I look forward to the day where that begins to happen more and more. Regarding drug manufacturers, I don’t know if the average investor or even the savvy investor in cannabis ask those hard questions early on about what level of facility you are building, tell me about the facility, maybe they are. I think the good news is, and you must see this from your architectural work, folks are on average getting more serious about building a clean, GMP-level facility as they get into this business. And certainly, that’s going to be important for an exit, any larger company is not going to want a buy a business that is ill-equipped and ill-designed. They are going to want to build that facility that is built right the first time.
B: It is interesting that you mentioned exit strategy, which comes from business planning, anyone that’s written a formal spreadsheet and created a business plan understands the importance of an exit strategy. What are some things in retail that can impact exit strategy? In other words, retail has a number of different levels. There is very simple retail where you buy used display fixtures and use slat wall, which is a type of wall material you can hang hooks on, put up a number of hats and merchandise, and you are up and running with a very low dollar impact. Then there’s a level of cannabis retail facility that is an experience. It is something you want to spend an hour there, some really shooting for the stars, above and beyond, in retail experiences in cannabis. How have you seen that spread in the groups you are working with?
J: I have always enjoyed the concept of a retail experience that has a certain tie-in component to the manufacturing or cultivation facility. We have worked on a couple of projects like that over the years, and that’s a lot of fun. To take it a step forward, and this isn’t quite allowed in Colorado right now, maybe in other places. Still, I would love to see the day where you see a retail experience that has that tie in from the manufacturing and cultivation element where there is also an event space on the premises. I think that it would be great to have cannabis organizations to be able to have events at such a facility.
B: Now I know that in California, social consumption or on-premise consumption is allowed. There are not a lot of other states following suit. If you go to San Francisco on a mission, you’ll find acceptance of that. What is your radar for social consumption in cannabis? Are we going to have cafes where you can have your CBD or THC in your latte in the foreseeable future?
J: I don’t know about THC in the latte, that’s a whole other animal. That said, I am pretty sure that Colorado’s newer Governor, Governor Jared Polis, I’m fairly certain that he signed a bill allowing for social consumption lounges at the state level. Now I don’t know if any municipalities have embraced that yet. I know some folks have been talking about it in Denver and boulder. I have personally not been to any social consumption lounges in Colorado. But I like to think that ball slowly moves forward as time goes on. Now I will mention, probably the only social consumption lounge I’ve ever been, I am not going to mention the name, even though it wouldn’t be a big deal as everyone knows about this place, including multistate politicians, I’m sure law enforcement knows about it. I will call it an “underground social lounge” located in New York City that is popular, it’s gotten press, politicians not just New York but from other states have traveled to visit this space to experience it. It’s well run it runs by a guy who’s a risk-taker, a pioneer like I was back in the day, and he took a chance to open such a business. Did a good job. Keeps it clean. Doesn’t serve any alcohol, that’s for sure, or anything like that. But it is indeed a safe place where all walks of life can gather and enjoy the plant.
B: Well, I will be in New York at the CWCB, so maybe I will check it out.
J: Maybe I will pop out there and join you, Brian.
B: That would be a lot of fun. November 4, 5, and 6, I will be at the Javits Center next week. Wow this has been an interesting conversation. Any other asides or ancillary things? I think we just touched on the idea of design and social consumption; those are really interesting subjects to me. Social consumption won’t that open up a whole new round of licenses and applications?
J: It might, but I’m not sure. As we are talking about real estate, one of the other things I would add is sure a lot of places where cannabis is new, people don’t understand it, so they are naturally afraid of it. Even in the Northeast right now New York and New Jersey, many local municipalities may decide to band retail locations initially. But time goes by, people from the town with the ban see what’s going on in the next town over that does not have a ban, they see these retail businesses are a welcoming safe place, to buy a regulate product, and neighboring business realize that dispensary drives up sales at their business. Whether that be, I want to say pizza – the first thing that comes to mind. But really, no matter what business, if there are limited dispensaries and high traffic going to a particular dispensary, its naturally going to drive business to the surrounding shops.
B: Do you think there will be? I know many municipalities don’t allow clusters of cannabis facilities, but I know there is a dynamic to location in the restaurant world, right? Restaurants near other restaurants do better, the competition is welcomed, and it gives customers more opportunities. Now restaurants are different from cannabis because cannabis retail many times has a requirement such as Illinois where a retailer cannot be a sole sales point for one manufacturer. Retail is required in the state of Illinois to be a diverse enterprise, meaning they sell products from all different manufacturers. So, I wonder if that sort of pushes it away from the trend of restaurants where there is a benefit from being located near others and that they may need to be in their own catchment area. In an earlier conversation, you mentioned Connecticut how some people in Connecticut are traveling very long distances to get to a retail store that provides them with what they are looking for.
J: Those stories break my heart. I would hate to think if anybody has been injured or lost their life due to an accident because they had to drive an hour to buy a product where they should be able to drive downtown or down the street to purchase. So, to further answer your question about the clusters, it really depends on how many licenses are available. So, New York state is an example, 2015 they issued 5 licenses for 20 million people. Sure, each license was good for 4 retail locations, so big deal 20 retail locations across the state of New York. I am sure there are people who had to drive HOURS to get a medical product. So, you really can’t have a cluster of dispensaries unless there is an unlimited number of licenses in the state or maybe no local regulations, that being said get into the industry in 2009 in boulder Colorado, by 2010 I had a dispensary 2 doors up the street from me, 2 doors down the street from me, so there were 3 of us just on the same block. Within a 4 or 5 block radius, there were easily 5 more dispensaries at least. So, we had a little cluster in downtown boulder. One of the things I know we had going on for us in the early days is that we had 4 grow operations and were crushing that side of the business, so it was good for our dispensary. I don’t know if it was good for all our neighboring businesses, but I would like to think that because we were all so close together that someone would go to a neighboring business and then mine. It’s funny Brian, the success of my business is dependent to some degree on limited license, when licenses are highly highly competitive that’s when folks come to use, that said, because it is the right thing to do, I will always stand up for an open program, because an open program gives everyone a chance to compete. It gives the brand new, mom and pop entrant an opportunity to compete against a well-capitalized group and if a new entrant could come in and do it better – this was my philosophy back then if someone could do it better than me, better price, better service than they deserve the business and that’s how it should be, I think everyone should have a chance to get into this industry, let the cream rise to the top, that’s the American way.
B: Excellent, it has been a delight talking to you. If you do fly out next week, you got my cell. For our listeners, continue our podcast journey with one coming up next that may touch on the cGMP topic that was lightly touched on here. We are working with some great people nationally, and we see a lot of uptakes in that area, and I think it’s worth spending some time bringing that message to our listeners. Jay, I want to say thank you for taking time out of your day today and chatting with me.
J: Yeah, we had a good conversation, Brian. I’m excited for the industry more after talking to you more.
This is a podcast series brought to you by Anderson Porter Design. Brian Anderson is joined by cannabis industry experts to discuss concerns of cannabis in the neighborhood. Our goal is to provide industry experts with information regarding sustainability, best practices, and challenges they may face with communities while working in cannabis. We also hope industry experts will use this podcast as a resource to share on a local level to educate communities and lawmakers about what they can expect by having cannabis as a neighbor.