The Washington Post - 20.08.2019

A20 EZ RE THE WASHINGTON POST.TUESDAY, AUGUST 20 , 2019

another sky-high.

Cannabis cafes are not yet the

moneymakers they seem to be.

The added expenses — extra staff

and 24-hour security, pricey

vents to suck up the smoke,

lobbying and preparing the li-

cense proposal — mean the Low-

ell cafe will cost approximately

$3 million to open.

“The chance of this being a real

moneymaking operation is that it

is truly the first of its kind and it

becomes a tradition throughout

America, and 30 years from now,

it’s a historical landmark and the

first place in America cannabis

was served,” Black said.

City officials hope the gamble

eventually pays off. West Holly-

wood is ready for marijuana tour-

ists and hopes the new businesses

— which include a virtual-reality

space and an art gallery with a

cannabis lounge — attract them in

droves. There are already canna-

bis tour buses, and the city’s dis-

pensaries do brisk business. The

Standard Hotel has plans to open

a high-end shop in its lobby by

cannabis company Lord Jones.

And in August, the company

WeedMaps opened a 30,000-

square-foot Museum of Weed in

Hollywood, with exhibits both ed-

ucational (the science of terpenes)

and Instagrammable (a room that

looks like a psychedelic lava lamp).

Leonard estimates that once

most of the new businesses are up

and running, annual cannabis tax

revenue will be between $5 mil-

lion and $6 million.

“Amsterdam kind of went to

step one,” with its simple cannabis

coffee shops, said Rachel Burkons,

who co-owns Altered Plates, a

culinary collective and cannabis

hospitality company. “I think

these are going to be much more

robust in terms of their overall

concept and execution and are

going to really kind of blow that

out of the water.”

T

he first time Drummer

smoked marijuana, as a 13-

year-old in south Florida,

she got into a fight that sent her

to court. After reading the anti-

drug book “Go Ask Alice,” she

became a youth counselor who

encouraged students to stay away

from marijuana. But after a few

years, her thinking changed.

“I just thought, I can’t do this,”

she said, “because I don’t know if

this is wrong anymore.”

She abandoned social work,

went to Le Cordon Bleu culinary

school and later started using

cannabis to treat sciatica, caused

by long days standing in the

kitchen. She founded Elevation

VIP, a private cannabis dinner

company, and briefly lived in her

car while she was getting the

business off the ground. It paid

off after appearances on the for-

mer late night talk show “Chelsea

Lately” and the Netflix show

“Cooking on High.” Drummer

said her dream was always to

open a cannabis restaurant.

“I’ve always looked forward to

the day that what we do is

counted among the critics and

among the James Beard

[Awards],” Drummer said.

In a way, the new restaurant

will allow her to use her social

worker skills again. Lowell Farms

cannabis cafe aims to hire staff

who were previously incarcerat-

ed for nonviolent cannabis of-

fenses. Drummer sees it as a way

of bolstering African Americans,

who have been the most dispro-

portionately penalized for canna-

bis use but who represent only a

small part of the industry.

“Instead of asking for social

equity,” she said, “I want to be

social equity.”

As she tested recipes on a

recent Monday morning, amid

the din of construction, Drum-

mer realized another way the

restaurant would be breaking

ground: It could potentially forge

new territory for food critics,

who might need to take a few hits

to see how well her pairings

work.

Cannabis can make food taste

really, really good. So if a critic

were to partake, she said with a

laugh, “We’ll get all the stars.”

[email protected]

ment still considers cannabis a

Schedule 1 drug, most banks are

unwilling to serve cannabis busi-

nesses, which must rely on alter-

native banks and credit unions or

cash transactions. (The Califor-

nia Senate approved legislation

in May that creates a pathway for

more banks to work with canna-

bis companies.) When the city

collected more than $1 million in

license application money, it was

primarily in cash.

Leonard said he anticipates

that many businesses will pay

their taxes in cash, too, which

“creates risks for everybody,” he

said. “We have to have multiple

people in the room counting

cash. We have to have sheriff ’s

deputies there with the cash be-

ing counted. We have to have

armored cars coming in, picking

it up.”

Tables probably won’t turn as

quickly at cannabis restaurants

because guests who are high may

be more likely to linger. Lowell’s

plans for a roof deck were scut-

tled because cannabis consump-

tion cannot be seen from the

street, so smokers must partake

in a walled-in garden at street

level. And guests who don’t finish

their cannabis won’t be able to

take it home.

“They’re going to purchase

less,” Subeck said. “How is a

business supposed to survive if

they can’t sell products?”

It might encourage some peo-

ple to take a larger dose in the

interest of getting their money’s

worth. The restaurant also has to

ensure guests don’t over-consume,

and that’s trickier than a bud-

tender cutting someone off. Can-

nabis — especially when ingested

— affects everyone differently, de-

pending on body mass and toler-

ance level, so a dose that barely

registers for one guest could send

Hollywood. Cannabis businesses

cannot serve alcohol, so drinks

are zero-proof. The state does not

permit cannabis businesses to

operate after 10 p.m., so Lowell

Farms cannabis cafe must have

last call for cannabis before then

— though it can remain open

until 2 a.m. (Leonard said West

Hollywood hopes to be granted

an exemption.) The businesses

cannot be within 600 feet of a day

care or a school. Some neighbors,

including a synagogue across the

street from the Lowell cafe, aren’t

too happy about sharing a block

with a cannabis business.

Because the federal govern-

to be purchased from a separate

business — which, as at the Low-

ell cafe, could be under the same

roof as the restaurant.)

“Think of, like, butters and oils

and broths,” said Kirk Cartozian,

a Los Angeles-area restaurateur

and partner in the Antidote,

which might spin off into a sepa-

rate business. “We have a lab and

essentially the potential setup to

supply our own, and maybe sup-

ply others, with business-to-busi-

ness” infused ingredients.

R

unning a cannabis restau-

rant is nothing like running

a typical restaurant in West

and start selling Reese’s peanut

butter cups and Doritos and

Coke,” Subeck said.

But folks in the cannabis in-

dustry are finding loopholes,

which West Hollywood has en-

couraged. Lowell’s strategy is to

put two separate businesses un-

der the same roof: a lounge to

smoke cannabis and a restau-

rant. Guests who order food and

cannabis will receive separate

bills. The plan was approved by

the West Hollywood Business Li-

cense Commission in July.

Another compromise: Drum-

mer originally had planned to

serve freshly infused food, with

cannabis butters and oils incor-

porated at various doses. But that

will have to wait, because under

state law, all cannabis products

have to be prepackaged and test-

ed, making it logistically impossi-

ble for a restaurant kitchen that

wants to serve fresh food. She’s

now focusing on making unin-

fused food to pair with cannabis

— including a dessert “flight”

that features a Fruity Pebbles ice

cream sandwich, and a s’more

with a housemade marshmallow.

It’s trickier for restaurants that

planned to infuse food but ap-

plied for an edible consumption

license. They cannot fall back on

making money from joints and

vaping, like Lowell, but they, too,

have found a creative solution.

The team behind the Antidote,

which plans to open an upscale

cannabis restaurant in the

spring, also plans to open a

commissary kitchen to produce

sauces and dressings infused

with THC, the psychoactive com-

pound in cannabis. Guests would

purchase a sauce, which would

be presented alongside the meal

in a sealed container, open it

themselves and dose appropri-

ately. (The sauce also would have

“With cannabis, we are build-

ing the boat as we’re on the

water,” said Jackie Subeck, who

plans to open a cannabis spa,

clinic and cafe and serves as the

chairwoman of the cannabis leg-

islative subcommittee for the

West Hollywood Chamber of

Commerce.

States that have legalized rec-

reational cannabis will be watch-

ing how the city pulls it off.

Colorado Gov. Jared Polis

(D) signed a bill in May allowing

cannabis lounges. If legalization

continues apace, cannabis res-

taurants might eventually be-

come as normal as wine bars.

“Whatever West Hollywood

does now,” said Sean Black, co-

founder of Lowell Herb Co., the

cannabis company opening the

cafe, “the rest of the blue states,

at least, [do] three years later.”

P

roposition 64 legalized can-

nabis in California, but con-

suming it in public is still

prohibited. When the West Holly-

wood City Council held a study

session on the topic in 2017, it

determined that access to places

to smoke was a social-equity is-

sue.

“A lot of people in this city are

renters, and they may not be able

to smoke in their apartments,”

said John Leonard, the city’s

community and legislative affairs

manager. “They’re forced to

smoke in public places or smoke

in their cars, and they face a

greater risk of being arrested for

that.”

However, that wasn’t the only

reason the council approved an

ordinance allowing public con-

sumption lounges.

People “enjoy the nightlife of

West Hollywood. So we thought

this was kind of a natural evolu-

tion that, you know, you can stay

in West Hollywood in a hotel, you

can go out to our bars and our

restaurants, and now you can go

to a cannabis consumption cafe

as well,” said Leonard.

There are public cannabis con-

sumption areas elsewhere in Cal-

ifornia and in Colorado, but

many are lounges attached to

dispensaries or vape clubs remi-

niscent of a dingy basement.

They are pretty different from

what West Hollywood had in

mind when it opened up applica-

tions for 16 on-site consumption

licenses (with 24 additional li-

censes for dispensaries and deliv-

ery) in May 2018.

The process drew more than

300 applicants, who were scored

on factors such as innovation and

social equity. The top eight in

each of five categories were al-

lowed to proceed.

Drummer’s application,

among the highest scorers in the

category for consumption lounge

(smoking, vaping and edible),

outlined a “bright and airy oasis”

with tableside “flower” service —

cannabis buds hand-rolled into

joints. It also called for a menu of

infused food, which Drummer

has been making for years as a

private chef whose clients have

included comedian Chelsea Han-

dler. The business has several

partners, but its main support

comes from Lowell Herb Co.,

with its rustic branding and ce-

lebrity following.

But as soon as the licenses

were approved, the compromises

began.

The first problem was the dis-

crepancy between city and state

licensing. Although the city al-

lows licenses for consumption

lounges that aren’t attached to

dispensaries, “There is no such

thing as a cannabis cafe license

from the state,” which will license

the businesses as dispensaries,

Black said.

The next problem was the

food. Although West Hollywood

permits it, California prohibits

cannabis businesses from selling

anything other than cannabis,

with the exception of accessories

such as bongs and pipes, and

branded merchandise such as

T-shirts. The purpose “was to

make sure that dispensaries did

not become convenience stores

CANNABIS FROM A

W. Hollywood cafes get creative to pair a joint with a toque

BY DANIELLE

DOUGLAS-GABRIEL

The Consumer Financial Pro-

tection Bureau, once one of the

most aggressive regulators of

education loan companies, is sig-

naling a retreat from oversight of

federal student loans by limiting

the duties of its new ombuds-

man.

Last week, the bureau an-

nounced the appointment of

Robert G. Cameron as its om-

budsman for private education

loans, charged with receiving,

reviewing and resolving borrow-

er complaints. But those respon-

sibilities previously extended to

federal student loans as well.

The new emphasis on the pri-

vate market is a turn for the

bureau, which has jurisdiction

over loans made not only by

banks and financial firms but

also the federal government. The

move limits the scope of the

bureau’s work at a time when the

federal government originates

more than 90 percent of student

loans, and as borrowers have lost

faith in the Education Depart-

ment’s ability to rectify problems

in the sector.

The consumer bureau did not

immediately respond to requests

for further comment on the di-

rection of its student loan over-

sight.

The selection of Cameron, who

hails from the federal student

loan servicing company Pennsyl-

vania Higher Education Assis-

tance Agency, also rankled con-

sumer advocates. Liberal law-

makers, consumer groups and

borrowers have criticized the

company’s management of the

federal Public Service Loan For-

giveness and TEACH Grant pro-

grams. The company and its sub-

sidiary FedLoan Servicing have

been the subject of consumer

lawsuits and state investigations

tied to those federal programs.

The company declined to com-

ment.

One of the most critical reports

about FedLoan Servicing was is-

sued by the Consumer Financial

Protection Bureau in 2017, under

then-Director Richard Cordray.

The bureau said flawed payment

processing, botched paperwork

and inaccurate information from

FedLoan was derailing hundreds

of public-sector workers from

receiving student loan forgive-

ness. It also promised greater

supervision of the program.

“It is outrageous that an execu-

tive from the student loan com-

pany that has cheated students

and taxpayers, and is at the

center of every major industry

scandal over the past decade, is

now in charge of protecting bor-

rowers rights,” said Seth Frot-

man, the previous student loan

ombudsman at the consumer bu-

reau who resigned last year in

protest of the Trump administra-

tion.

Frotman, who now is executive

director of the Student Borrower

Protection Center, has been advo-

cating that states play a bigger

role in protecting student bor-

rowers from predatory behavior

in the market. Consumer groups

say states may now be the last

line of defense for borrowers.

The Trump administration in-

sists that federal student loans

are solely the purview of the

Education Department. The di-

rector of the consumer bureau,

Kathy Kraninger, has made that

argument to Congress when

questioned about the bureau’s

oversight of the student loan

market. In May, several unions

and the Student Borrower Pro-

tection Center urged the director

to use the bureau’s full authority

to regulate the entire student

loan apparatus.

[email protected]

Consumer watchdog signals hands-off approach on federal student loans

PHOTOS BY ORIANA KOREN FOR THE WASHINGTON POST

LOWELL FARMS

At the Lowell Farms, a cannabis cafe that will soon open in West

Hollywood, Calif., proprietor and chef Andrea Drummer, at top,

will pair dishes such as lamb chops with mango-plantain salsa with

marijuana that diners will smoke. She had initially planned to sell

infused foods, but because of state regulations, desserts such as

caramel corn, ice cream sandwiches and s’mores will be pot-free.