Plaza Encroachment

A new downtown outpost of Santa Fe cannabis mainstay Best Daze opening this month may be the last dispensary in the Plaza area. That’s because a city ordinance requires that new cannabis retail spots be no closer than 400 feet to each other.

Best Daze’s new location on W. Palace Avenue, which will be the company’s fourth in the city and which brings the number of dispensaries in Santa Fe to more than three dozen, sits about a block away from the Plaza.

Eli Goodman, who runs Best Daze with his father Len, tells SFR he doesn’t expect to see any more competition near the Plaza, aside from the existing Minerva Canna less than half a mile away.

“Between the two of us, we’ve more or less edged out availability,” Goodman says.

Sidewalks between Minerva’s E. Water Street store and the Plaza call for about a 1,000-foot walk to the center of the square, but as the crow flies, the store measures just a few hundred feet from the edge of the Plaza.

Minerva Canna CEO Erik Briones tells SFR the downtown location, which opened about two months before sales expanded beyond medical-use, has proven to be successful due to high foot traffic.

“When there’s a lot of tourists in town, it’s a great day. When there’s not, it’s an average day,” Briones says.

Briones agrees the 400-foot proximity zoning rule, in addition to long-term tenants and the Palace of the Governors that already front the Plaza, keeps the likelihood of closer cannabis slim. (The city measures the distance between the main entrances of new stores to determine zoning eligibility.)

Other factors also make it hard to have a go near the Plaza. Tai Bixby, a director at Real Estate Advisors LLC, tells SFR rent rates on and around the Plaza range from about $40 to $60 per square foot.

“The closer you are to the Plaza, the more expensive it is,” Bixby says.

But, he adds, trying to rent a space for cannabis retail comes with its own unique baggage. Some property owners, Bixby says, don’t see cannabis sales as “savory” enough for the many downtown visitors. Property owners who are OK with taking rent from weed shops might be also bound by lenders.

“There’s a lot of things structurally that are built into the debt and equity structures or real estate investments where the lenders don’t allow that type of activity,” he says.

While several dispensaries have opened within walking distance to the Plaza, not all companies are putting a ton of resources into making it a priority. Verdes Cannabis CEO Rachael Speegle says her company’s downtown store at 220 Shelby St., which is the next closest shop to the Plaza, is more focused on educating customers than racking up sales, partly because of the fluctuating tourism season and partly because of the company’s focus on wellness. Cannabis Control Division data shows the downtown Verdes store has made nearly $1.5 million since April 2022. The Southside Verdes location reports just under $603,000 in sales since its opening in November 2022.

“I think that there’s this fantasy that the Plaza is going to be very lucrative for businesses,” Speegle says. “But we never expected that. We did a lot of research and we put together a prospectus for our Shelby [Street] location, and knew that our intention was just to educate the public, and that’s the point of that store.”

During the summer, the store sees an influx of customers, but sales drop off during the spring and fall months. Further, she says, she doesn’t think out–of-towners are all that interested in proverbially flying to the moon. The store’s most in-demand product is a CBN gummy, which does not contain full-octane THC.

“People want to sleep,” she says. “They get on vacation, they want to rest, they want to relax, they want to have a good night’s sleep without feeling overly intoxicated in the morning.”

Goodman, Briones and Speegle all agree, however, that Santa Fe approaches, if it has not already arrived at, the verge of cannabis retail oversaturation. Goodman says the nearly 40 dispensaries in Santa Fe prove that even with distance restrictions, “zoning is pretty easy.”

Briones says he’d like to see the Regulation and Licensing Department stop issuing cannabis establishment licenses, because “there’s way too many already.”

Speegle believes the number of stores for a city with a population less than 100,000 borders on irresponsible behavior by the industry.

“As a member of this community, I think it’s a disservice to our community to continue to pop up dispensaries wherever we can, as an industry, " she says. “People don’t want to drive down the street or walk down the street and see dispensary after dispensary. These rows of them are comical at best and insulting to the community at worst.”