Two Morgan Hill real estate agents are looking to open the
county’s first medical marijuana dispensary in north Gilroy, but
police and city staff are not ready to sign off just yet.
Morgan Hill
Two Morgan Hill real estate agents are looking to open the county’s first medical marijuana dispensary in north Gilroy, but police and city staff are not ready to sign off just yet.
City staff are researching the legality of such a business, which could open at 1207 First St. near Togo’s and First Street Coffee. Medical marijuana is allowed – tacitly or overtly – at the state and local level, but prohibited at the federal level. Proponents, including many Gilroy residents, say the dispensary will increase tax revenue and decrease crime while providing a service to people with debilitating ailments. However, police wonder if the business won’t increase crime in the area and city staff are concerned it will set them up for trouble with the federal government.
The application was filed by Batzi Kuburovich, a Morgan Hill real estate agent and resident who plans to move to Gilroy next month. Kuburovich, 48, said he was inspired to open a medical marijuana business after watching his father – who died in 2005 – struggle with pain and weight loss from prostate cancer that only marijuana could relieve. Kuburovich will partner with Realtor Neil Forrest, 56, who worked with Kuburovich at Century 21 Premier in Morgan Hill several years ago. Together, the pair later formed Cornerstone Commercial Real Estate Services in Morgan Hill.
“I just want to dignify this practice while also reducing local crime and increasing tax revenue and local employment opportunities,” Kuburovich said.
Kuburovich applied to open MediLeaf last week. He envisions a clean, tight-run operation with staff who will only sell dried marijuana leaves – no brownies, suckers or other “edibles” regulated by health officials. At least two security guards will screen people entering a closed foyer, and an “open-door policy” with police will emphasize that Kuburovich has no stomach for people who feign symptoms to acquire prescriptions that they then use to buy legal marijuana to sell on the streets, he said.
Forrest, who has lived in Morgan Hill for about 15 years and owns a home on the east side of the city, has practiced a variety of professions.
He has sold real estate the last six years, and prior to that he worked for the Hewlett-Packard electronics company for about 12 years. And before that he developed an extensive background in education, having earned Masters degrees in guidance and counseling and secondary education, and working as an educator in a number of school districts and with inner-city youth.
He is currently a member of the Santa Clara County Board of Realtors, and the Morgan Hill Chamber of Commerce, where he is listed as the owner of Franchise Hot Spot. Forrest said that company is a “sideline” to his real estate activity, in which he assists people in setting up franchises.
While Kuburovich is the money-man in the MediLeaf operation, Forrest said his background in education will contribute to marketing and outreach efforts.
The pair chose Gilroy instead of Morgan Hill because their initial research showed there are more medical marijuana practitioners and more medical facilities closer to Gilroy, Forrest said.
Forrest hasn’t smoked marijuana since he was in college about 30 years ago, and he said he has never used it for medical purposes. But he believes medical marijuana is an effective treatment option for some patients.
“I’ve worked with people living with HIV, and people in my family have died from cancer, and I know the compassionate relief that medical marijuana provides,” Forrest said.
But Gilroy city staff are still weighing the legal situation before they sign off on anything.
The Gilroy Municipal Code does not prohibit such dispensaries, Santa Clara County has no laws on the matter, and in August 2008 California Attorney Edmund Jerry Brown wrote that “properly organized and operated” dispensaries “may be lawful” under state law. Still, the Gilroy Police Department has yet to sign off on the application, and City Administrator Tom Haglund said staff is researching restrictive federal drug laws. However, since his election, President Barack Obama has directed the Drug Enforcement Agency to relax raids on dispensaries and smoke shops that were more common under the previous administration.
In his written opinion last year, Brown also cited state laws that said dispensaries “are not organized to make a profit for themselves … but primarily for their members as patrons.”
Kuburovich and Forrest said other state dispensaries would not divulge their business models or profit margins.
“Everybody has been highly confidential and won’t divulge their numbers, and as far as our profits go, I really didn’t calculate grand numbers,” Kuburovich said.
The city council does not typically vote on business applications, but council members could pass an ordinance regulating the medical marijuana industry here.
All this is fairly new to the Gilroy Police Department, but Sgt. Chad Gallicinao said, “This does concern me as a law enforcement officer … The community was concerned about the possibility of a strip club going in a while back. I’m not sure how they’ll react to the possibility of a medical marijuana dispensary moving in.”
A sampling of residents did not return the same outrage as seen with the strip club, which one entrepreneur proposed for a building near Home Depot in northeast Gilroy earlier this year before shopping center restrictions killed the project.
“Hey, why the hell not? Liquor’s worse for you than marijuana or tobacco, and a lot of my friends use it. What the hell?” said Anthony Montez, an 86-year-old resident at Wheeler Manor in central Gilroy.
Currently, residents who have legitimate prescriptions must drive to Redwood City, Millbrae, Oakland, San Francisco or Santa Cruz to purchase medical marijuana, which dispensaries buy from private, licensed growers who usually sell a pound for $3,500 to $4,000, Kuburovich said. A store-bought ounce, in turn, goes for about $400 – or about $6,400 per pound – excluding the extra $37 per ounce for taxes. Any profit will pay off overhead, said Kuburovich. Legal leaves come in all types, similar to tea, and are typically bottled in orange plastic vials.
Local organizations that deal with crime, substance abuse and its effects were quiet on the proposal. Erin O’Brien, president and chief executive officer of Community Solutions, said she had not heard about the dispensary and needed more details before commenting. Dina Campeau, strategic coordinator for South County Collaborative, echoed O’Brien.
