Lottery loser hopes he'll be big retail marijuana winneron May 8, 2014 @ 6:03 am (Updated: 3:27 pm - 5/8/14 )
the lottery to award recreational marijuana licenses in Washington was the end of the line. But a few losers are going with their "Plan B."
One of those hopefuls was Pete O'Neil, a California transplant who came here to open a comedy club and who decided to jump into the emerging recreational cannabis business, calling himself a "serial entrepreneur."
Last summer, O'Neil starting rounding up investors for C and C Cannabis, which was tough for him because the state forbids out-of-state investment in recreational marijuana businesses. He staked out possible retail locations, even began paying rent. He spent tens of thousands of dollars, despite uncertainty about the final rules.
"Things kept changing. I mean, we never knew that the lottery was going to be for 334 stores," said O'Neil. "I think those of us who come out of other professional industries, if we would have seen that number, we might not have jumped so hard."
Then came the lottery, last month, and O'Neil was among the 1,174 applicants across the state and lost in all three locations where he entered.
"I'd be lying if I didn't tell you I was sort of depressed. Last Saturday we had our investor meeting and when I went to that meeting I was prepared that the investors would say, 'Pete, let's figure out how much is in the bank, let's write a check and let's all call it a day.'"
Instead, they took another route. O'Neil was approached by a lottery winner in Bremerton who wanted O'Neil's more desirable retail space. O'Neil said he intended to keep paying rent, even though he lost the lottery.
"Then we just met and had lunch and talked it out and decided we'd be better working together," said O'Neil.
State law prohibits the sale of licenses so O'Neil has just announced he's bought the business of "Better Bud" and will open a shop in Bremerton, after all. And he's not done.
"We're negotiating right now in three other markets and our goal, if we can do other acquisitions and buy firms that were lucky lottery winners, we can fold that into it. If there's a lottery winner out there in Seattle right now that wants to get in line..." he said.
O'Neil concedes a Seattle store will likely cost him two to three times what he paid for the Bremerton store.
C and C Cannabis stores are designed to mimic the appearance of a hair salon or a vitamin shop, brightly lit, not intimidating.
"Part of our concept is we want our stores to be inviting to like a soccer mom. We don't want them to look like a dirty head shop from the 70s," O'Neil explained.
O'Neil thinks marijuana will become as popular as coffee.
"We think with this new industry, somebody is gonna end up being the Starbucks of cannabis in the United States," O'Neil predicted. "We don't know if it's gonna be us, but we're sure as heck gonna work hard so that it could be."
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