Quiet marijuana dispensaries abound in Gilroy

Medileaf's General Manager Javier Patterson scans a bag of

At least four medical marijuana cooperatives and businesses are
operating in Gilroy
– news to many City Council members.
At least four medical marijuana cooperatives and businesses are operating in Gilroy – news to many City Council members.

In addition to MediLeaf, which opened at First Street and Westwood Drive on Nov. 9 without a permit, online medical cannabis directories reveal that multiple medical marijuana services do business in Gilroy, including at least three that are based within city limits and do not have business licenses. While the purveyors of these dispensaries said they do no need licenses to operate within the city, Gilroy staff and officials said this is incorrect.

“You better believe you need a business license,” Mayor Al Pinheiro said, saying that anyone who does business in Gilroy needs legal permission to do so.

Compassionate Express, a local delivery service, officially set up shop late last year, its owner said. Another delivery service, 420 Girls, has plans to operate in Gilroy soon, according to its senior manager. And a San Jose cannabis club Web site indicates a third dispensary, the William Flow Cannabis Club, has been in Gilroy since at least November.

In addition, Purple Cross Rx dispensary, which just opened a store in Hollister’s downtown, makes regular deliveries to Gilroy, director Scott McPhail said.

Meanwhile, Councilman Perry Woodward wonders if even more dispensaries will set up shop between now and Feb. 24, when a city ban on medical marijuana dispensaries could go into effect.

“I wouldn’t be at all surprised that someone does act,” he said.

Dispensary and delivery service operators have varied reasons for getting started.

The owner of Compassionate Express, who would not give his name, said he is a cannabis patient himself and he started his business because he met older patients who did not like the stigma of going to a dispensary or the hassle of traveling to Santa Cruz.

“A lot of my patients are lonely and they’re sick and they have no family,” he said.

He only has eight regular clients, and he is very picky about who he chooses to serve, he said. He noted that there are times when teenagers call him late at night. He simply tells them to fill out the paperwork, and nine times out of 10 they don’t do it, he said. When they do fill out the paperwork, he verifies if there is a need, he said.

“I can tell if it’s a kid looking to score,” he said.

Another delivery service, 420 Girls, is just getting started in Gilroy after its owners have had success with a Hollister-based medical cannabis service called West Coast Meds.

Steven Souza, senior manager of both delivery businesses, said that smaller dispensaries like his tend to focus on actual needs, while he remained cynical of the intentions of larger dispensaries.

“You know how many people are going to open up dispensaries just because it’s a gold mine,” Souza said. “That’s wrong.”

He said he hopes to work with the City of Gilroy, adding that he believes that delivery services do not need a business license to operate.

“It’s basically like a pizza delivery service, but you’re getting your meds delivered to you,” he said.

Purple Cross Rx makes deliveries to Gilroy twice a week, although it has far more members in the Hollister area, McPhail said. Like MediLeaf, Purple Cross opened in Hollister without a business license. Most of the dispensary’s Gilroy members are bedridden and would have no other way of getting to a dispensary, McPhail said.

The Web site SanJoseCannabisClubs.com also stated that a dispensary called the William Flow Gilroy Cannabis Club exists, but no contact information was listed on the site. A Nov. 17 review of the club on the Web site stated that it had “exccelent product and selection” (sic) and that the “staff is all very nice.”

Medical marijuana businesses not only have different names and clientele, they also are structured in varied ways. For instance, while MediLeaf is set up as a nonprofit mutual benefit corporation with a collective model, Compassionate Express has a for-profit model, although the owner says he is not making any money.

Compassionate Express is registered with the Secretary of State under the Los Angeles address of LegalZoom.com, an online legal document service, rather than a Gilroy address.

Joanne Hanlon, a spokeswoman for LegalZoom, said businesses can use the company’s address as its registration address through its registered agent services. LegalZoom customers tend to be small businesses or entrepreneurs who do not have access to the same resources as larger companies, she said.

Hanlon said she could not divulge information about individual businesses that use LegalZoom’s services.

MediLeaf ombudsman Eric Madigan said this week he had not heard of Compassionate Express, but he wished to best to them if they were operating under Attorney General guidelines.

“As MediLeaf has clearly shown, the need for safe, affordable and local access to medical cannabis was clearly overdue,” he said.

Gilroy City Council members who have opposed MediLeaf said it is illegal for delivery services to operate without a business license, just as it is illegal for dispensaries to operate without one.

Irma Navarro, revenue officer for the City of Gilroy, said all businesses that operate within city limits must have a business license. In addition, she said any business that uses its own vehicles to make deliveries into Gilroy must be licensed with the city.

City Administrator Tom Haglund did not return four phone calls Tuesday and Wednesday.

Councilman Dion Bracco, who opposed an ordinance that would have allowed legal zoning for MediLeaf, expressed more empathy for a delivery service like Compassionate Express than with MediLeaf.

“If he’s got like 10 customers, he’s probably more legitimate than this guy over here that has 1,100 customers,” Bracco said. “It sounds like (Compassionate Express is) serving truly sick people.”

At the same time, he indicated that such businesses would be illegal under the ban that was approved last week.

Councilman Bob Dillon, who has opposed medical marijuana dispensaries in Gilroy, said he felt the same way about a medical cannabis delivery service being in town as he does about MediLeaf.

“They act like this is the only product in the world that can solve these problems, and this is not true,” Dillon said.

On the other hand, Woodward said if new dispensaries open, he did not want the city to “continue in what will be a never-ending quest to run them out of town at a huge expense to the city,” he said.

Police are investigating whether multiple medical marijuana dispensaries exist in Gilroy, Sgt. Jim Gillio of Gilroy Police Department said. However, he would not give further details about the investigation.

Pinheiro and most council members said they favor marijuana being allowed for medical purposes, but they oppose dispensaries opening up in Gilroy without city permission. Pinheiro said he personally felt medical cannabis should be sold in a pharmacy rather than in a dispensary.

“Gilroy shouldn’t be looked upon as place where can break laws and do any such thing,” he said.

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