Two San Jose cannabis dispensaries have temporarily closed — and the city stands to lose millions in revenue if they go out of business.
MedMen and Herbs both closed their doors in the last few weeks, raising alarm across Silicon Valley’s cannabis industry. While they closed for different reasons, local cannabis lobbyists and retailers say the closures epitomize the effect of San Jose’s high taxes and fees. It also will drive customers to the black market for cheaper cannabis products, they said.
Pot retailer MedMen, once valued at $1.6 billion, temporarily closed its San Jose storefront after its stock price dropped to zero. Its Yelp page says it will reopen by the end of the year, which means the city could miss out on $100,000 in monthly tax revenue, said Sean Kali-rai, founder of Silicon Valley Cannabis Alliance.
Herbs, a small local mom and pop dispensary, was forced to close after the city rejected its licensing renewal because the company owes hundreds of thousands of tax dollars to San Jose. Sharmi Shah, the shop’s attorney, said that could be a loss of at least $1 million for San Jose’s budget, but the company is working on reopening.