Bay Area Liquor Stores Shun Idea of Selling Pot—Too Risky

Bay Area Liquor Stores Shun Idea of Selling Pot—Too Risky

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With the legalization of marijuana emerging as a possibility in California, legislation currently working its way through Sacramento would allow any vendor to sell pot with a common liquor license. Given the state of the economy, you’d think small businesses like liquor stores would jump at the chance to increase revenues by retailing weed along with beer, tobacco and wine.

But many liquor store managers and employees in Oakland and San Francisco say that regardless of any changes in the law, they will not be selling pot in their stores any time soon.

The reason? Security.

“We would need an extra window with its own cashier and a security guard,“ says Fowaz Aldabashi, manager of the Mullen’s Market on Broadway in Oakland. Mullen’s lost its liquor license earlier this year after neighbors complained that the store was attracting loiterers and drunks. But Aldabashi, whose family owns another liquor store near downtown, says that even with a license, they would not sell marijuana.

While liquor stores often operate with the risk of armed theft, robbers tend to go for the cash register and not the store’s inventory, putting them at a similar level of danger as any other cash business. But some liquor store owners fear that selling pot would make them more of a target for criminals, because of the drug’s high resale value and ease of transport.

Voters will decide the fate of Proposition 19, the statewide ballot measure that would legalize marijuana for recreational use, next week. Although its passage is far from certain, Assemblyman Tom Ammiano (D-San Francisco) is already sponsoring a bill that would put the Department of Alcoholic Beverage Control in charge of regulating marijuana and allow any store with a liquor license—including convenience stores and even supermarkets—to sell it.

The hesitancy felt by liquor store owners in Oakland underscores the murkiness of how legalization could affect businesses throughout the state.

For example, advocates for Prop. 19 caution that legalization would not present immediate opportunities for business owners, because of continued opposition from the federal government and questions of regulation that still need to be sorted out.

“If there is an opportunity [for vendors], there will be many more legal hurdles to jump through,” said Linda Stokely, a representative for Harborside Health Center in Oakland, the nation’s largest medical marijuana dispensary.

Stokely added that Harborside has not been in contact with any liquor license-holders regarding sales.

But legal or not, liquor store employees say the risk of selling marijuana outweighs the potential benefits. The reason is a function of the economics of the substance itself.

“If you stole a bottle of liquor from here, you would only be able to sell it for half as much out there,” Albadashi says, gesturing to the street outside his storefront. “But the price of weed is the same everywhere.”

Despite the proliferation of medical marijuana dispensaries, the value of pot is just as high in a store as out of it. On the street, even a small quantity can fetch a high price, making a large quantity an attractive target for a thief or robber. Unlike alcohol, the plastic bags and jars used as packaging at medical dispensaries are easily discarded, making it difficult to claim as stolen property.

Two employees at another liquor store near downtown Oakland echoed concerns that the risk of selling marijuana would be too high to justify potential profits. They doubt legalizing marijuana would put corner dealers out of business, any more than medical dispensaries have.

One liquor store employee who declined to give his real name said that selling marijuana on the premises would require hiring a security guard at the very least.

His store, like Mullen's, draws customers mainly from surrounding working-class neighborhoods. Known drug dealers live and sell nearby, and they’d likely target stores holding large stashes of marijuana to benefit their own enterprises, the employee says.

Across the bay in San Francisco, Fadhla Eau Beh, manager of the Potrero Market & Deli, said that despite the tough economy, the thought of selling marijuana legally makes him afraid.

“Business is very, very dry right now,” he says. “I work 15, 16 hours a day, and I only have enough to pay the taxes and rent. But if I do something like that? I would get killed.”

Employees point to armed robberies at medical dispensaries as an example of the kind of danger they want to avoid. San Jose has already seen three dispensary robberies this year, and across the state, many utilize security guards, safes and metal detectors to protect their operations and inventory.

Marijuana advocates counter that despite predictions from law enforcement to the contrary, dispensaries have not become crime magnets. In Denver, police reported this year that dispensaries are robbed at a rate similar to pharmacies and well below that of banks.

But selling marijuana and liquor together in or near a high-crime neighborhood would perhaps compound the risk of liquor store owners doing business.