There's a land grab happening in Palm Desert for licenses to sell, grow and deliver weed

The boss of Bighorn Golf Club is taking a swing at the marijuana business.

That’s one takeaway from a review of 33 applications from companies vying to join the pot industry in Palm Desert, where City Council voted to permit marijuana businesses in October.

The applicants, who put their names forward during a five-day period in December, are an eclectic group. There are businesses looking to convert empty storefronts into marijuana shops. There are big city dispensaries seeking a toehold in the desert. And there's an applicant that lists Bighorn owner R.D. Hubbard in its business filings.

Let the marijuana games begin.

"It's a very competitive business," said Barry Walker, co-founder of Tradecraft Ventures and one applicant angling for a prized storefront on El Paseo. "This is the Olympics, this eight- to ten-month period where everyone's rushing in for licenses. Everyone's been training for this."

Two related patterns are evident in the applicants.

The list shows a land grab in the pot industry, with early adopters from one city setting their sights on new territories as more cities, counties and states allow legal marijuana companies to set up shop.

The list also shows signs of vertical integration. Many applicants in Palm Desert are attempting to control their products from seed to sale, growing marijuana, processing it and then selling it through their own retail stores. They say the practice will keep costs down, especially after new state taxes that went into effect on Jan. 1.

Not every venture will walk away a winner. Palm Desert is following the example of other cities, restricting marijuana businesses to certain areas and limiting the number of retail permits.

Of the 19 applications for a dispensary permit in Palm Desert, up to six will succeed, per city regulations, and no more than three may be located on the same street. And of six marijuana retailers bidding for a coveted address on El Paseo, the city has said it will give its blessing to a single shop.

Regardless of who is awarded a permit, the applications show future pot businesses clustering in distinct parts of the city.

Most retailers have scoped out potential locations on El Paseo or along Highway 111, as far west as Parkview Drive and as far east as a spot across from Best Western. Other pot businesses – including cultivators, manufacturers and delivery services – have focused on neighborhoods on either side of Cook Street south of Hovley Lane East, as well as some buildings along Interstate-10.

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Cannabis businesses must obtain a Conditional Use Permit and a Cannabis Regulatory Permit from the city, as well as a state license from the Bureau of Cannabis Control.

Businesses pursuing those permits in Palm Desert say the city has special cache. Tony Huang, who has a dispensary in Santa Ana, said he is applying for a spot on El Paseo because of its reputation as a luxury shopping destination, where a customer might stop into a dispensary after visiting Saks Fifth Avenue.

“Three years ago, there’s no way I would have thought that Palm Desert would accept applications," Huang said.

Huang will have to make a strong case for his business in order to succeed. Palm Desert plans to rank applications based on a point system, in which businesses score higher based on their professional experience, security plan, location, proposed building improvements and promised "community benefits."

Palm Desert will then decide ties by lottery, hold public hearings and hear appeals. It aims to issue permits in April, according to a timeline posted by the city on its website.

Here's a closer look at some of the businesses tossing their hat in the ring for a cannabis permit in Palm Desert.

More: These are the marijuana laws you should know for every city in the Coachella Valley

Retail today, pot tomorrow?

A handful of business people with real estate on El Paseo or Highway 111 are taking advantage of the opening of the marijuana industry to propose new uses for old shops.

That's the case for The Leaf at 73740, the applicant for a Conditional Use Permit that lists racing and golf industry magnate R.D. Hubbard as its manager/member on state business filings.

If The Leaf receives a permit, it could revive a vacant building at 73-740 El Paseo, which was once home to a menswear boutique, an art gallery and a jewelry store. Filling the El Paseo storefront would be good news for Hubbard, who is listed as a director at B-16 Development, the company that purchased the building in June 2017.

Hubbard could not be reached for comment. Edward Burger, who is listed as CEO of The Leaf and B-16 Development, declined comment for this story.

Three other businesses vying for the city's single slot on El Paseo list vacant storefronts on their applications.

One exception is the Denise Roberge art gallery at 73-995 El Paseo. Roberge has clashed with Palm Desert over posting controversial hand-lettered signs in her shop and playing loud outdoor music at a restaurant she owned. Now, she has applied for a permit to modify the shop to suit a cannabis retail store. Roberge also identifies herself on application paperwork as CEO of Four Green Gold, LLC, a medical dispensary. She declined to comment when reached by phone.

On Highway 111, one application seeks to add a pot shop at the same address as a pizza place.

Colin Hood, landlord to The Hood Bar & Pizza on Highway 111, filed an application on Dec. 11 to subdivide his property so that a separate suite could accommodate a cannabis dispensary.

Hood did not return messages seeking comment.

Seeking a Coachella Valley toehold

Palm Desert has attracted a half dozen applications from companies that sell cannabis in coastal cities like Los Angeles. Some already have plans to grow and process marijuana in the desert, but Palm Desert has piqued their appetite for Coachella Valley stores.

Perhaps the most high profile member of that group is MedMen, a Los Angeles-based company with dispensaries in California and New York and additional operations in Nevada. Although MedMen is planning to build a cultivation and manufacturing facility in Desert Hot Springs, the proposed shop in Palm Desert would be its first retail space in the Coachella Valley.

“California is going to be a significant player as we move toward full legalization,” said Daniel Yi, a MedMen spokesperson. "We want to be in sort of iconic areas up and down the state."

In Palm Desert, MedMen is hoping to open a dispensary in the stately Spanish revival-style building that is now Presage clothing store, according to its permit application.

Tradecraft Ventures is another marijuana company competing for El Paseo real estate.

Tradecraft co-founder Barry Walker said the business started by growing cannabis in Los Angeles, then added its first dispensary in North County San Diego and has since expanded into making tinctures, cookies and other products. Today it boasts annual revenue of $10 million, he said, and is on track to break ground in February on a manufacturing, distribution and cultivation facility in Coachella.

As for Palm Desert, Walker said the city would be "a jewel of a capture" for any retailer.

"It's a nice neighorhood and it's a nice clientele," he said. "There are a lot of seniors in that area that have money and want to take care of themselves and want to be proactive."

Walker will be competing against other marijuana sellers from the coast. Cloud Eighth, a dispensary in Los Angeles, is eyeing a building on Highway 111, as is Outco Labs, which operates a dispensary in El Cajon under the name Outliers Collective.

Previously: On El Paseo, one marijuana retailer will be allowed as Palm Desert lifts marijuana sales ban

Doubling down on the desert

Other applicants are already selling marijuana in the Coachella Valley – and see Palm Desert as a new frontier.

PSA Organica is a dispensary in Palm Springs that opened two and a half years ago and today employs about 250 people between its cultivation, trimming and retail operations, owner Julie Montante said. The business has applied for a dispensary permit on Highway 111 in Palm Desert, a spot where the business hopes to reach patients farther away from Palm Springs.

“This way, our patients from La Quinta, Coachella and Indio don’t have to drive as far,” Montante said.

Some Cathedral City dispensaries are also trying their luck in Palm Desert: West Coast Cannabis Club, H.O.T.N. Club and P&S Ventures, which does business as The OG Collective.

Scott Lambert, who co-owns The OG Collective, said Palm Desert is a good location to reach older patients. It's also a promising place for his company to keep growing its cultivation and distribution capacity – a process Lambert said is a crucial strategy to keep prices low as new taxes kick in this month.

“If we grow the product and we also process the product and we also distribute the product, we cut our overhead,” Lambert said. “Being fully integrated allows us... to eliminate a lot of the cost factors for consumers.”

Keep reading: Pot is legal in California, but Riverside County is still fighting to close dispensaries

Reporter Nicole Hayden contributed to this story. Reach her at nicole.hayden@desertsun.com.

Reach real estate and business reporter Amy DiPierro at amy.dipierro@desertsun.com.