22/09/2023
Embarc opened the first adult-use dispensary in Ventura, Calif., earlier this month, nearly three years after voters approved a 2020 ballot measure that city leaders said would allow cannabis retailers to set up shop.
Lauren Carpenter, CEO of Embarc, which currently operates nine dispensaries throughout California, says the business gives her and her team the opportunity to destigmatize cannabis in local communities.
“You have the segments of the community or of the population that are enthused at finally being able to have access in their neighborhoods, in their community,” Carpenter tells Cannabis Business Times. “But you also have a lot of folks that I think because of the stigma around cannabis, still have a lot of fear. Getting to this point and being the first to open, it’s always interesting. You’re the tip of the spear. You have folks who I think for a long time have had fear around what legal cannabis can mean in their community, and it’s really exciting to be able to invite those folks into this space and really show them what cannabis is and also what it isn’t.”
Despite California representing one of the most mature cannabis markets in the nation, 56% of cities and counties in the state still forbid any type of cannabis businesses within their jurisdictions, according to the state’s Department of Cannabis Control (DCC).
The Licensing Journey
Embarc celebrated its grand opening in the heart of Midtown Ventura Sept. 9 following a multiyear application and licensing process.
“Like so many other communities in California, the city worked for a number of years to develop a competitive, merit-based licensing system,” Carpenter says.
Embarc celebrated the grand opening of its Ventura dispensary Sept. 9.
The process began after Ventura voters approved a tax measure in November 2020 to allow cannabis retailers to operate in the city. Local officials opened an application process for dispensaries in January 2021 and issued the first three cannabis retail licenses in October 2022. Regulators later agreed to issue three additional licenses to alleviate legal challenges to the licensing process, according to the Ventura County Star.
“Ventura does kind of epitomize a lot of what’s happened in California, which is that a city passes an ordinance and then it takes several years for stores to open,” says Hirsh Jain, founder of Ananda Strategy, a consultancy that represents many of California’s cannabis retailers and advises business operators across the supply chain.
Part of the delay in Ventura, Jain says, can be attributed to Ventura City Manager Alex McIntyre, who was in charge of overseeing the cannabis licensing process, being removed from office in November 2022 due to allegations that he was directing funds from his public office to personal expenses, the Ventura County Star reported.
“It was publicly reported that he was basically charging a bunch of personal expenses to the city, … completely separate from cannabis,” Jain says. “That, in part, kind of gummed up the process.”
Carpenter points to the delayed licensing process as one of Embarc’s biggest challenges in getting its business up and running in Ventura.
“We were really disappointed that the process was delayed by almost a year,” she says. “I think any operator knows that time is money. … It was disappointing to see this battle delay access because I think there’s been a lot of pent-up citizens saying, ‘Wait a minute, I voted in 2016 to legalize in California, I voted in 2020 to tax cannabis locally, and it’s 2023 and we still don’t have any stores. What’s going on here? And oftentimes, there isn’t an understanding that we as operators desperately want to be open and want to be serving them, and that for a variety of procedural reasons, we can’t yet. So, I think that's been a real pain point and a frustration in getting to this point, but I’m really proud to have been able to navigate that in a way where we could be first to market.”
A Grand Opening
Now with a license finally in hand, Carpenter says, “it’s such an honor and a privilege” to open Ventura’s first dispensary and provide cannabis access and education to the local community.
Hundreds of people arrived for Embarc’s grand opening in Ventura, with lines beginning to form at midnight the night before.
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Embarc had a soft opening a few days before its grand opening celebration Sept. 9; Carpenter says the company announced the soft opening on Instagram to give its staff a few days to serve customers before the broader grand opening brought in more traffic.
“The first 10 customers on that first day of our soft open were over the age of 60, which I think is just really fun because it starts to show communities that far more people are using cannabis than I think initially meet the eye,” Carpenter says.
The Ventura community has largely embraced Embarc, which is located alongside yoga studios, coffee shops, bookstores and hair salons in the city’s Midtown Corridor.
“Obviously with the pandemic, it’s been a really wild three years for businesses and in particular small businesses,” Carpenter says. “There’s this really renewed focus and renewed emphasis in the community on reinvestment within Midtown. We’ve seen downtown flourish and thrive in a lot of ways, and … there was a lot of energy with local community members around bringing that effort further up Main Street, which is the street we’re located on, and into the Midtown Corridor.”
Carpenter views each of Embarc’s dispensaries as a local, neighborhood shop in the cities where the company operates, and Embarc strives to hire locally and design each storefront to reflect its community.
“I’m really proud of what we did with this store [in Ventura] because I think in so many ways, the team has absolutely nailed that and has really situated our pot shop within this broader neighborhood that’s really investing in commerce and energy and vitality,” she says. “I think you got to see that at our grand opening. … There are a number of independent small businesses within the few blocks surrounding our shop, and it was really through neighborhood collaboration that we were able to pull that grand opening together. We had coffee from the coffee shop down the street, and we were buying people coffee on us all morning. We had one of the local … boutiques … at the grand opening displaying all of their really cool things. We had a local glass blower there with a lot of their glassware. So, we were fortunate.”
A Focused Approach
With five more licensees in the process of opening dispensaries in Ventura in the coming months, Carpenter says Embarc will differentiate itself through its focused approach to retail.
“When I started this company, I was really laser focused on being a retailer only,” she says. “At the time, everyone was fixated on vertical integration and on growth at all costs. I felt in my gut that wasn’t the right approach to be taking, and I think three and a half years later, … my gut has fortunately served us really well. We’ve stayed really laser focused on just trying to be really good at one thing as opposed to trying to stretch ourselves thin doing all of the things. That doesn't mean that there aren’t others that are killing it at vertical integration.”
Embarc holds 18 cannabis retail licenses in California
Embarc has won 18 total cannabis retail licenses in California through competitive, merit-based application processes, which Carpenter says helps the company establish itself as a local partner in the communities where it has set up shop.
“I can honestly and truthfully say I’ve probably taken a thousand meetings with individuals over three years to understand what excites them about cannabis coming [to Ventura] and to understand what their concerns are, what their questions are,” she says. “I think as a result of those efforts, we’ve really built engagement into our DNA in a way that I don’t know a lot of other operators are investing the time or resources into doing. I think that absolutely shapes who we are as a company. I know it is intrinsic to our company culture, and I think that it is a real north star for our team, who I think genuinely work to surprise and delight everyone who walks through our doors every single day. As consolidation occurs and as we see brands gain strength, I believe the role of the retailer is to be a partner.”
The Fight for Retail
Nine Embarc stores are currently operational across California and nine more are under development, either awaiting final approval from local municipalities or in the build-out phase.
As CBT previously reported, 61% of cities and counties prohibit cannabis retail operations in California, and with only 1,218 active dispensary licenses in the state as of Sept. 15, 2023, there are 3.1 retail locations per 100,000 people, the lowest rate among the most mature cannabis markets in the country.
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To help address this issue, the DCC recently revised and updated guidelines for Phase II of its Local Jurisdiction Retail Access Grant (LJRAG) to make the program, which assists local governments in establishing cannabis retail licensing programs and issuing retail licenses, more accessible.
For Jain, Embarc’s opening in Ventura, which has a population of roughly 109,900, signifies the end of yet another cannabis retail desert in California.
“The lack of legal dispensaries in California is an acute problem, to say the least,” he says. “One of the impacts of that, of course, is that the illicit market reigns supreme because there’s a lack of legal options to purchase cannabis legally. This is one of the main reasons, along with taxes, that the illicit market remains dominant in California.”
Not only is there an overall lack of licensed dispensaries in California, but Jain also says the retailers that do exist to legally serve the market are concentrated into the small number of cities that have actually allowed cannabis sales.
“That means that there are huge swaths of the state where there aren’t options to purchase legally, and then there are some cities that are saturated,” he says.
Carpenter believes more successful cannabis retailers coming online will ultimately drive communities that currently prohibit cannabis to relax their restrictions.
“Hundreds and hundreds of thousands of people either don’t have access to legal cannabis or are having to travel to other communities in order to get it,” she says. “As more of these cities come online and as operators like us and so many others that are great operators in California get our stores open, I believe that’s the single greatest component of helping other communities to realize the potential for this as well.”
‘Progress Over Perfection’
Looking ahead to Embarc’s future in Ventura, Carpenter says she is excited by the market’s potential and the team is learning new lessons every day to help push the business forward.
“The biggest lesson I’ve learned as an operator is progress over perfection,” she says. “I’m a perfectionist by nature, and I think [when you’re] growing at the scale that we’re growing, [you] realize that you need to bring in a bunch of smart, talented people around you to help you make progress. … We’re continuing to refine our inventory assortment. We’re continuing to refine it such that each of our stores is able to provide meaningful feedback on what that should look like to ensure we’re reflecting the local market and that market’s preferences, but doing so in a way that still reflects our company’s values. We’re continuing to refine our hiring strategies.”
Jain believes the six retail licensees will be “more than enough to meet demand” in Ventura and says that the expanded access to legal cannabis retail will only help to further dimmish California's illicit market.
However, Jain cautions that local bans on cannabis retail aren’t the only barrier holding the legal market back—complex city ordinances and lengthy licensing processes also play a role.
“I think when it comes to the retail landscape, yes, there are not enough cities online, but really the most acute problem is that local bureaucracy is hampering the development of this ecosystem, which hurts everyone—the city, the residents, the operators,” Jain says. “I think that’s why it’s so critical that the system be reformed to serve all of those stakeholders better.”
For her part, Carpenter says that in the shorter term, the Embarc team plans to refine its regional focus and develop a strong reputation within the communities where Embarc operates.
“As we look to the footprint of the nine existing stores and the nine more that are in development, we’re on major thoroughfares, we are clustering in regions so that we can really develop a reputation and a brand promise with consumers, not just in one community but throughout an entire region,” Carpenter says. “I think the short-term [goal] is to really keep doubling down on this promise, … to keep opening our doors and opening them quickly and efficiently because it’s really important that we deliver on our promises to the community.
“Longer term, I’m really, really proud of the position we’ve put our company in, where in the midst of a lot of chaos in the market, we are not just surviving, but in a lot of ways thriving. It feels hard saying that because I know so many others are not right now. But I also think part of my job is to really celebrate the successes of our team because it’s our team that creates that. My longer-term goal is to really lean into that and continue to innovate within this unique strategy we’ve taken to become one of the largest, and … most community centric retailers in California.”
