A Santa Ana cannabis shop says its new business model beats bans in other cities – East Bay Times

There’s a small storefront in Anaheim where shoppers can use a digital kiosk to summon a nearby driver to deliver cannabis, spending about as much time and money as they would spend buying cannabis at any licensed shop.

The difference? Anaheim, like most cities in California, doesn’t license cannabis stores.

The kiosk-and-delivery model is a concept developed by a Santa Ana-licensed cannabis retailer to reach customers beyond its hometown through a loophole in state law that permits marijuana deliveries even in cities that have otherwise banned the industry.

Experts suggest the idea pioneered by owners of The Joint, in Santa Ana, might be ripe for a legal challenge. Numerous California cities are in court, pushing for more control over how the burgeoning industry operates in their borders. And the easy access offered by the kiosk and delivery concept might be viewed in those communities as a defacto retail operation.

But the model is new, and California regulations don’t appear to either expressly allow or prohibit the kiosk-and-delivery model that the Santa Ana shop is quietly rolling out across Orange County.

“It could go either way,” said Hilary Bricken, a Los Angeles-based cannabis attorney. “It could be brilliant, or it could be a suicide mission.”

The Joint’s Anaheim operation was advertised on Weedmaps.com as recently as Friday, Jan. 3. That was three days after Weedmaps said it had stopped carrying ads for marijuana shops that didn’t provide license numbers, a practice that — because of Weedmaps’ dominance of online cannabis advertising — has helped prop up the illicit market in the two years that recreational cannabis has been legal in California. So the ad’s appearance on Weedmaps initially suggested the Irvine-based site might still be promoting a retailer that was operating in a banned city.

But the ad for  “The Joint – Anaheim” touted that the operation was compliant with state law. It even included a state license number, though it was the same number issued to The Joint in Santa Ana, which is the one city in Orange County currently allowing marijuana retailing.

Also, the ad for The Joint – Anaheim isn’t a one-off. As of Jan. 3, at least eight other shops calling themselves “The Joint” were advertising in other cannabis-banning cities, including Newport Beach, Costa Mesa, Huntington Beach and San Clemente.

Driving up to the “The Joint – Anaheim” site, in an industrial area alongside an office for a pest control company, there was no sign to mark the business. Other than that, it didn’t look like a rogue pot shop. The windows weren’t blacked out and there was no hint of marijuana odor. Instead, the doors were propped wide open and smiling workers greeted everyone who came near.

“Looking for The Joint?” worker Andres Coppola asked. “You’re in the right place.”

Coppola then began showing off a five-foot-tall kiosk that featured a touchscreen menu of cannabis products.

He explained that The Joint in Santa Ana owns the kiosk. However, no marijuana is stocked at the Anaheim location. Instead, after customers make their choices on the kiosk, and show identification to prove that they’re not younger than 21, a driver from Puffy Delivery comes from outside and hands them their products.

Cannabis delivery — unlike retail — is permitted throughout California under state law. And for now it can’t be banned, though one county and several cities, including eight in Southern California, are mounting a legal challenge to that rule.

Puffy is a licensed delivery company. And all of the products it sells are tested for safety and packaged according to state regulations, just like items for sale at The Joint’s regular store.

What’s more, customers at the kiosks pay all applicable state taxes.

“It’s The Joint sponsored and Puffy delivered,” explained Andrew Richardson, an employee with The Joint who was manning a kiosk Thursday afternoon inside Smokerz Land tobacco shop in Costa Mesa.

  • Customers outside Smokerz Land take delivery of marijuana they ordered on a kiosk in Costa Mesa, CA, on Thursday, Jan 2, 2020. (Photo by Jeff Gritchen, Orange County Register/SCNG)

  • A marijuana dispensary listed on Weedmaps as The Joint in Anaheim, CA, on Thursday, Jan 2, 2020. (Photo by Jeff Gritchen, Orange County Register/SCNG)

  • A Weedmaps sign sits outside Smokerz Land in Costa Mesa, CA, on Thursday, Jan 2, 2020. (Photo by Jeff Gritchen, Orange County Register/SCNG)

Chris Glew, chief legal adviser for The Joint, said the operators have been searching for ways to capture more of the regulated market. They helped customers use iPads to order their products during an event in Northern California, and Glew said the kiosk/delivery model evolved from there.

“As far as we know, nobody else is doing this,” Glew said.

The month-old experiment is providing more access to Orange County residents who, during peak traffic times, might otherwise live 30 minutes or more from the closest legal shop. Product choices are a bit more limited than with traditional home delivery, Glew acknowledged, since they’re curating the menu to keep delivery times fast.

But Glew said there are still some advantages in going to the kiosks rather than having cannabis delivered straight to someone’s home.

One is price. Typically, Puffy Delivery orders under $100 will have an $18 delivery fee tacked on. At The Joint kiosks, that fee is waived.

Another reason is wait times. Home delivery can take hours. At a kiosk, The Joint customers typically get their products in two to five minutes.

A third reason, Glew explained, is security. Some shoppers may not be comfortable having a stranger come to their door, or are wary about neighbors seeing the delivery. So the kiosk model, Glew said, is the equivalent of an Amazon Hub Locker or the “safe exchange zones” that police in some cities have set up to provide security for people buying and selling goods online.

But cannabis attorney Bricken said she expects some cities to push back, noting that Proposition 64, passed in 2016, gives cities local control over the industry.

Bricken said she’s been approached by other cannabis companies considering similar models, and that state cannabis officials told her the idea violates the spirit of California’s law on cannabis delivery, which is meant to allow people to order from their homes.

The Joint can make the argument that the kiosk simply offers a more efficient way to order products that are already available, and legal, via a smartphone, said Jessica McElfresh, a San Diego attorney who specializes in cannabis law. But she added that opponents could counter, arguing that the kiosk and delivery operation is essentially a mini sales center, complete with employees.

If opponents win that fight, Bricken said, The Joint could risk being fined, having its license suspended, or even losing its license altogether.

“I applaud their creativity,” Bricken said. “But that’s the problem with regulations. Regulation is not innovative. Even if it’s a good business idea, regulators could clobber it.”

Glew said he’s “almost certain” that some cities have sent code enforcement officers in to check out what they’re doing. So far, he said, no one has raised any flags.

Aside from a couple negative reviews on Weedmaps, where some shoppers felt a bit duped, customers seem to like the kiosk concept. Over the course of about 20 minutes on Thursday, roughly a dozen people visited The Joint’s Anaheim location, which also sells cannabis-themed clothing. Repeat customers headed straight for the kiosk while newcomers walked in cautiously, confused, likely expecting to enter a traditional marijuana shop.

But Coppola and two coworkers were waiting, ready to help. Within minutes, a young couple with their dog, and an older man who parked a work truck, walked out clutching bright blue packages.

“It’s completely compliant,” Glew said. “We’re not violating any rules. So we have nothing to hide.”

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