Making Sense Out of Pot Haze

Two Los Angeles-based entrepreneurs say they have a business solution to managing the wild, wild ,west of medical marijuana growth, and they’re eyeing Canoga Park as a possible site to jumpstart their efforts. Plant Properties Management founder and CEO Jason Oh and his chief operating officer Daniel Jaimes are in talks with cities about the idea they say would lead to the creation of safer cannabis, tracking of growth and distribution, and possible tax revenues for the state and local governments. The duo’s plans come as California voters gear up to decide in November whether to support the legalization of limited amounts of marijuana for recreational use for adults age 21 or older. Measure 19 would also allow local governments to authorize, regulate and tax various commercial marijuana-related activities. In 1996, voters approved Proposition 215, which legalized the growth and possession of marijuana for medical purposes. Oh and Jaimes, who are managing directors of the business’ holding company Diversified Business Development Group, want to open secure facilities where licensed medical marijuana growers could rent space for cultivating their product. Oh envisions radiofrequency identification codes included in the marijuana packaging, GPS tracking devices to monitor delivery and an inventory database. The business would report to the state how much marijuana is grown at its facility and where it ends up for taxation purposes. It would also keep track of its clients’ patients to ensure proper documentation for the marijuana. The business would also operate labs, where the product would be tested to meet safety standards and would be labeled. “We’ve talked to a lot of people in the industry,” said Oh, who also has a software development company and a media entertainment company. “People are growing some things in the weirdest ways. … There’s no regulation right now. Anybody could do whatever they want, and it’s going to the general public.” He added that many dispensaries today get their goods from street vendors, creating hazards for legitimate patients. His business would help mitigate that, he said. “There’s a lot of dispensaries that want to do everything completely legitimately,” Oh said. David Honda, the owner of Northridge-based D.S. Honda Construction who is interested in developing a site in Chico with Plant Properties Management, called the business model “well thought through and orchestrated.” “I think (the) plan … is looking at the quality of the product,” Honda said. “This is going to be profitable for cities to look for a new tax basis if the cities are ready to control it.” Grow big Oh and Jaimes are thinking big. They’re hoping to open a 600,000-square-foot growing facility in Chico and a 21,000-square-foot facility in Canoga Park, which would both be used to rent space to growers. But first they must win over the hearts of city officials, local constituents and law enforcement. The business partners have already won the support of several investors and have begun talks with officials from Los Angeles, Long Beach and Chico. After meeting with Chico officials, Oh and Jaimes were invited to present their plan to the city’s Planning Commission on Aug. 5 where the commission will discuss a city ordinance defining where marijuana can be grown in the city. “Our current land use policy does not permit this activity at the location they want to do it,” said Assistant City Manager John Rucker, adding that marijuana cooperatives and collectives could get pushed to a district more focused on manufacturing. “This is an oddball thing that comes in that we never even considered 10 years ago, so now we’re figuring out if it’s legal,” he said. The opening of Plant Properties Management sites will depend on whether the cities are willing to issue the appropriate permits, Jaimes said. The ability to collect tax revenues will also depend on the cities’ policies. “The actual local government has to create their own excise tax,” Jaimes said. Rucker said such a process is lengthy since it would require approval by local residents. Oh and Jaimes project the facilities, if approved, could provide a couple hundred jobs at the Chico site and about 25 jobs per facility for smaller sites. While Angeles Councilmember Tony Cardenas’ chief of staff did not have direct knowledge about the plan, he said environmental and public safety issues would likely need to be addressed before the city would back such a concept. “We have some very big concerns about the controls and cultivation of marijuana, (such as) how much governmental oversight on something like this we can actually provide,” Jose Cornejo said. Questions that should be asked include whether security for the complex would be sufficient and how excess product would be disposed of, he added. “Until we have better understanding about what restraints and levels we need to put on growth of medical marijuana, I don’t think the council would be supportive,” Cornejo added. Big-box pot businesses Plant Properties Management is not the only business trying to break into the marijuana market. The city of Oakland passed a city ordinance last month, allowing four businesses to grow marijuana for dispensaries at a large-scale, industrial level. One Foothill Ranch business called Medical Marijuana, Inc., which announced its support for the city’s decision, has a similar model to Plant Properties Management. Like Oh’s company, the business says it tracks the marijuana from seed to point of sale and provides a method for cities to collect taxes from pot sales. Oh said what sets his business plan apart is a more defined focus on safety regulations. Oh said whether or not the ballot measure passes, Plant Properties Management would still have a market. “There’s truly a need for medical marijuana,” he said. “There’s patients out there that truly rely on it.”