By the beginning of next year, the back section of Berkeley’s Amoeba Music won’t be where you buy jazz records; it will be where you buy “jazz cigarettes.”
Joking aside, the decision by the Berkeley City Council last week to award the owners of the Amoeba Music one of the city's six marijuana dispensary licenses means their flagship store on Telegraph Avenue has a shot at sticking around, says co-owner Marc Weinstein.
“This is absolutely going to help save the Berkeley store,” Weinstein says.
The Berkeley location will be the first record store in California to house a marijuana dispensary, but Amoeba Music isn't doing it just to be pioneers in the field. Opened by Weinstein and co-owner David Prinz in 1990, the store, just blocks away from UC Berkeley campus, has been continually losing money for the past eight years; Weinstein says that this year’s sales at that location are less than half what they were in 2008. In the past, this wasn't dire, as sales at the L.A. and San Francisco stores made up for the Berkeley store's troubles, but in recent years sales at all three locations have decreased "because the market is shrinking all the time."
"The Berkeley store got a lot slower than the other stores a lot sooner, partially because of the culture that surrounds Telegraph," Weinstein says. "But also the students in general, especially five to ten years ago, came in, and the new wave was downloading and streaming music. Really, a lot of students don't understand why anyone would buy a hard copy."
Seeing the rising profitability of medical marijuana in California, Amoeba Music has worked with Berkeley city officials and advisers in the pot industry for almost five years to secure a license. Now that they've been approved, Amoeba's owners are working with Debby Goldsberry, executive director at Magnolia Wellness Collective dispensary in Oakland, to create the Berkeley Compassionate Care Collective in the section of the store that currently hosts its jazz, classical and world music sections. The 3,000-square-foot dispensary will sell a wide variety of products, and Weinstein says it will also serve to educate the public about uses and benefits of medical marijuana.
"It's going to be a full-service, comprehensive dispensary for the neighborhood," Weinstein says.
But it hasn’t been cheap to enter the medical marijuana industry. Amoeba Music has already paid approximately $100,000 just for applying for the license to sell -- it didn't help that they were denied a license back in May -- and converting the space into a dispensary is expected to cost them several hundred thousand more.
Also, despite the almost-guaranteed profitability of medical marijuana, entering the business for the Amoeba owners is still risky after spending about $5 million on an online digital music store that never came to fruition. Weinstein says the project, which they saw as potentially competing with iTunes and Amazon in terms of the range and amount of downloadable music it would provide, "almost killed" Amoeba and had to be scrapped because they couldn't strike a licensing deal with the major labels. Also, by the time the store was ready, Weinstein says the market for music downloads had come and went.
"The whole market only lasted nine years from beginning to end! Nobody buys digital downloads any more," Weinstein says. "We literally never had any chance to get footing in that market. We spent millions of dollars on it and lots of resources, and where did it go? Into thin air."
Besides being financially hobbled by an expensive gamble, Amoeba has the challenge of sustaining a business model that is contradictory to what is working for newer record stores. Local chains like 1-2-3-4-Go! and Stranded appear to be thriving because they're in smaller locations and are smaller-staffed than the larger-sized Amoebas -- Weinstein says that the L.A. store alone costs $165,000 a month in rent and employs over 200 workers. Not to say Amoeba's emporiums are completely doomed, since plenty of customers still regularly shop at all three locations.
"We feel that the market for hard copies (of music releases) is going to stay strong for years to come, but it may not be big enough to sustain all of our three big stores," Weinstein says. "We want to keep an emporium for hard copies in each of the three communities that we care about so much."
If the dispensary succeeds in keeping the Berkeley store afloat, Weinstein says that the other two locations will end up incorporating marijuana dispensaries. (The San Francisco store already has a medical marijuana evaluation office in its upstairs.) But Weinstein says it's not just because of the money; he and Prinz strongly support the medical marijuana business in general.
"Cannabis dispensaries are our first experiment in this business -- a business we strongly believe in. We think access to cannabis is a human rights issue, and my partner Dave and I are both very much on the same page," Weinstein says. "We're being afforded an opportunity to come into this business with fresh eyes and come up with a new model on Telegraph. We feel the responsibility and we're hoping to make everyone happy with a model that is strictly Berkeley-style and very much a part of the community."