HAYWARD SEES GROWTH IN POT DISPENSARIES

Three Clinics Have Been Operating Quietly, And Two More Have Applied For
Permits To Open

HAYWARD -- A sprouting hub of medical marijuana dispensaries has some
people calling the downtown area "Haysterdam," a hybrid of Hayward and
Amsterdam -- the Dutch city known for its drug tolerance.

Within just a couple of blocks, there are three businesses dispensing
medical marijuana, and two are proposed for the future.

"Hayward is the first stop for people coming from the Peninsula and Santa
Clara County," said Phillip Mol, owner of Helping Hands Patients' Center on
B Street, adding that patients stop in Hayward instead of traveling to
Oakland for marijuana.

News of the latest proposed dispensary buzzed last week among downtown
business owners as they received notification from the city about a use
permit under consideration for Total Hayward Compassion, proposed at a site
on B Street between Main Street and Mission Boulevard.

Business owners surveyed by the Chamber of Commerce said they opposed the
dispensary because they did not think it meshed with ongoing efforts to
upgrade B Street, which is slated for a $3 million facelift beginning this
month.

"The debate isn't about whether the use of medical marijuana is
appropriate," said Chamber President Scott Raty. "This type of business is
very inconsistent with goals for revitalizing downtown."

"We want foot traffic, but not that kind of foot traffic," added Steve
Rubiolo, whose photography studio is just below Helping Hands. "The
proposed use is flawed and dangerous. It would not attract shoppers
downtown. It would encourage questionable activity at all hours of the day
and night."

Kenny Vargas, who would run Total Hayward Compassion, appears to be the
first owner to be frank with the city about his business plans, city
officials said. He proposes a medical clinic on the first and second floors
of the building, with hemp products also for sale on the first floor. The
top level would be a residence.

Use permits are required downtown for first-floor medical clinics. Although
a planning official could rule on the permit, it likely will go before the
Planning Commission because of its controversial nature.

"I purposely wanted to be upfront about my intentions to help people in
need," he said. "It would be a great benefit to the community if the city
embraces it. I plan to see 300 patients a month."

Owners of another proposed new dispensary on Main Street between A and B
streets, who did not want their names used until plans were more settled,
said they want to mix a dispensary with a coffee shop, open to the public.
They have a lease on their building but haven't yet applied for a business
license.

The existing dispensaries -- Hayward Hempery and Local Patients
Cooperative, both on Foothill Boulevard near the intersection with B
Street, and Helping Hands -- have business licenses. But the nature of the
business listed on their licenses ranges from sales and services to retail
sales to consultant, with no mention of marijuana.

So the city has no official record of these businesses dispensing medical
marijuana, which is legal under California law but illegal under federal law.

The legal limbo makes it difficult for the city and police to come up with
policies addressing the issue.

"We don't get that many complaints," said police Capt. Raul Valdivia. "We
feel it's probably better to deploy our energy and our resources in other
directions."

Even if arrests were made for possession of marijuana or related crimes, he
added, it is not likely that the district attorney would prosecute.

Several dispensary owners said they used to be affiliated with Hayward
Hempery, which opened downtown more than a decade ago even before the
passage of Proposition 215, which legalized marijuana for medicinal use in
California.

Mol, for example, left to open a better model with quality products and
better prices.

"I'm just trying to do a good thing and help people," he said, adding that
he's disgusted by black-market prices and people who mix medical marijuana
operations with hard drugs.

None of the owners said they were concerned about competition, and they
said the market likely will support the new operations, if they're well-run.