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Cannabis dispensary planned for vacant Midtown building

Crystal Nugs is planning to open a cannabis dispensary at 2300 J St. in Sacramento in the fourth quarter of 2022.

Cannabis-delivery company Crystal Nugs is planting roots in Midtown with plans to open a storefront dispensary in a vacant building at the corner of J and 23rd streets. 

Crystal Nugs CEO Maisha Bahati said once operational, it will be the largest cannabis dispensary in Sacramento.

The building at 2300 J St. was previously occupied by J’s Beauty Supply. The two-story location is 7,800 square feet and has its own parking garage with 18 spaces, Bahati said. 

“We have owned a tattoo shop on J Street for 12 years right across the street and have always admired the building but never imagined opening a dispensary there,”she said. “It sits on the corner and there is a lot of foot traffic in the area. Parking was also a big deal for us, so it’s just a great location. I think we’ll fit in well with the neighborhood.”

Bahati envisions the lobby occupying downstairs, with the dispensary and showroom upstairs. She said the amount of space will allow the opportunity for innovation in terms of how brands are showcased.

Crystal Nugs is one of 10 local cannabis companies that received dispensary permits from the city through its Cannabis Opportunity Reinvestment and Equity (CORE) Program, which was created to assist those facing barriers to starting cannabis businesses due to the historical disparate enforcement of cannabis crimes.

The planned dispensary will put an emphasis on women-owned and minority-owned brands, Bahati said, especially those local to the region.

“I just want people to be able to come to this staple location in Sacramento and know that you’ll find local, equity-owned, women-owned brands, and top brands in the market,” she said.

The planned dispensary is organizing an open house this weekend to allow Midtown residents to learn more about the vision for Crystal Nugs and meet the team. Approximately 2,900 invites were sent out, Bahati said, and the goal is to let residents ask questions and show that the dispensary is committed to the neighborhood and transparency.

Architectural plans are in the process of being finished for the location, which Bahati is leasing. Once those are completed, Crystal Nugs will apply for a conditional use permit through the city to operate a dispensary on the premises.

Bahati said if all goes according to plan, they expect to have doors open to the public in the fourth quarter of 2022.

By Jake Abbott  –  Staff Writer, Sacramento Business Journal

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Sacramento Announces 10 Finalists For New Cannabis Shop Permits

Sacramento’s growing marijuana industry is about to get even bigger.

On Thursday, city leaders announced the finalists for ten new pot shop permits. The demand for these licenses is huge and big money is at stake.

Maisha Bahati just learned she is among the ten budding business people selected for the City of Sacramento’s new cannabis permits.

“It was insane. We were so excited, we had gone out and bought champagne last night just in case,” Bahati said.

More than 100 people applied for the coveted licenses, which would allow them to open a marijuana storefront dispensary.

“They gross anywhere from 4 to 8 million dollars a year,” said Davina Smith, the Sacramento City Cannabis Director.

Sacramento currently only allows 30 cannabis shops – and none are black-owned. These ten new licenses are an effort to diversify the marketplace. Applicants were judged not only on their business plans but on their personal stories.

“The drug war impacted me in some profound ways,” said Malaki Seku Amen, a cannabis business applicant.

He says his father was a casualty of marijuana criminalization.

“He was working to prevent the violence caused by the drug war and he was shot and killed,” Seku Amen said.

And others who were selected have been on the wrong side of the law in the past. But these ten lucky finalists still have a lot of work to do.

“They’re celebrating tonight but the work starts tomorrow because they have to go through every step of the permitting process that anyone else would,” Smith said, and later added, “people could be opening in six months. It could take others two years.”

Many hope the new infusion of income will benefit Sacramento’s economically disadvantaged neighborhoods.

“We’re going to pull from our community, we’re going to hire women, it’s just going to be a diverse business, something that’s different from what’s out there now,” Seku Amen said.

Sacramento places a 4% tax on all cannabis products sold in the city. That’s expected to generate about 17 million dollars this year.

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Sacramento may allow 10 new pot shops to address inequity in city’s marijuana dispensaries

Sacramento is poised to allow 10 new cannabis dispensaries in an effort to fix long-standing equity issues in the city’s retail pot market.

Of the city’s 30 dispensaries, none are owned by black men and women, demographics that were disproportionately arrested during the War on Drugs, Malaki Amen, executive director of the California Urban Partnership, has said.

To address that, the City Council in 2018 approved the creation of the Cannabis Opportunity Reinvestment and Equity (CORE) program. For those who meet certain income, zip code and other requirements, the program waives thousands of dollars in fees and prioritizes applicants for permits.

Although permits for cultivation, manufacturing, and delivery are available, there is no way for a CORE graduate to open a dispensary, which most want to do. About 117 people recently graduated from the program.

Councilman Larry Carr proposed the city get rid of the cap altogether. If his colleagues won’t agree to that, he suggested the city allow 30 new permits so half the shops in the city would be owned by CORE participants.

“There are 30 licenses granted. Equity will be when there are 30 CORE licenses granted,” Carr said.

He said he would accept a minimum of 10 new permits, however, and Councilman Allen Warren agreed.

Councilmen Jeff Harris and Eric Guerra raised concerns with allowing too many new shops, suggesting the city should start with three.

Mayor Darrell Steinberg, looking for a compromise, suggested the city allow 10 new permits spread out over two years.

Amen said he would prefer the city allow 10 new permits a year. That’s the amount the city currently has the staff and resources to process, said Assistant City Manager Leyne Milstein.

“I appreciate concerns across the board from the mayor and council and yet I still have concerns about tip-toeing toward equity when we’ve been down this road for five years now,” Amen said, referring to when the city first started discussing equity issues in the city’s cannabis market. “We’re at a point not only where the city has to build trust with communities damaged by the War on Drugs, but we really have to be intentional about opening up this market.”

MARIJUANA DISPENSARY SCANDAL, FBI INVESTIGATES

The discussion followed reports by The Sacramento Bee that revealed a man who was indicted in October with Rudy Giuliani’s associates in a campaign-finance scheme co-owns a Sacramento dispensary. His business partners own a total of nine of the city’s 30 shops under the “Kolas” brand. In 2011, the business partners only owned two, city applications show. City code bars owners from selling or transferring permits.

Although city staff had been checking since 2014 to make sure at least one name remains in the application from the previous year, dispensaries have been allowed to add new names of owners, then over time, remove the names of original owners. The council in November amended city code to prohibit people with an ownership interest in a storefront dispensary from obtaining an ownership interest in another dispensary.

In addition, the FBI has been investigating whether pot business owners in Sacramento have bribed local officials in exchange for favorable treatment.

Ashby said the city’s priority should be fixing the problems that allowed the business partners to accumulate so many permits.

“I don’t understand how one person came back with (so many) when we very clearly, every member of this dais said that’s not gonna happen … and it happened anyway,” Ashby said Tuesday, holding up a copy of the article. “All the ones that were monopolized could’ve gone to women and minority-owned businesses.”

After The Bee stories were published in October, the council passed a moratorium on dispensary transfers, which lasts until March 11. The mayor called for a new city audit and for a new employee to be hired in the city auditor’s office to focus solely on the cannabis department.

The council approved the creation of that position Tuesday.

“I’m confident that we are beginning to build the checks and balances so if there is a problem that raises eyebrows, we know about it and we can act,” Steinberg said.