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Wednesday, February 18, 2009

Recession threatens to burn out pot clubs

By Tamara Barak Aparton

Business at The Green Cross medical marijuana dispensary has slowed due to the poor economy.

SAN FRANCISCO – One might guess that tough economic times would only fuel the desire for mind-altering substances. For San Francisco’s cannabis clubs, however, nothing could be further from the truth.

The deepening economic crisis has hit the dispensaries hard, forcing the nonprofit collectives to cut staff, business hours and donations to charities.

Charlie Alazraie, manager of Bay Area Safe Alternatives, said business has dropped about 60 percent since summer, as the economy forces patients to buy smaller quantities. Alazraie had to let go of one full-time employee and two part-time workers at the small Western Addition collective.

Also halted were donations to soup kitchens and low-cost health clinics that serve many of BASA’s patients. The previously profitable collective was hit with a penalty last quarter after paying their sales tax late for the first time.

“This year we’re going to be so much in the red, I don’t want to find out. I know it’s going to be ugly,” Alazraie said. “We’re in arrears with our vendors, with architects, with everything.”

The collective has always had a commitment to provide free medical marijuana for those in impossible situations — people who are critically ill and living in poverty were subsidized with money set aside from sales. In the past, the number of people who qualified hovered around 36. Today, there are 60.

The recession hit right after many San Francisco pot clubs had spent tens of thousands of dollars to comply with legislation passed in 2005 requiring them to meet city permit regulations.

Kevin Reed, founder of the Green Cross, which delivers medical marijuana to patients in San Francisco, said his sales are down 25 percent in the past 40 days, and dropped 45 percent in the past two weeks.

To survive, the collective cut its hours and cut its 12 employees’ pay by $2 an hour.

“It’s amazing to me,” Reed said. “It’s an industry I never thought could be affected.”

Reed said he thought marijuana would be a recession-proof product, much like alcohol.

“I always heard that if the economy went bad, people would be depressed,” he said. “The whole theory got blown out the window for me.”

The cost of the pot hasn’t risen, but the $300-an-ounce price tag has become a heavy burden for people who have lost their jobs and cut back on expenses. Insurance does not cover medicinal marijuana.

“The only busy day we’ve had in the past 40 days is when we offered a one-third off discount for veterans,” Reed said. “It seemed like half the veterans in the state signed up.”

Green sector

The recession is weighing on medical pot sales in The City.

30 Known medical marijuana dispensaries (clubs and delivery services) in San Francisco

2 Known medical marijuana dispensaries (clubs and delivery services) in San Mateo

$103 Cost of state medical marijuana card

$300 Approximate cost of an ounce of medical marijuana

Original here

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