SAN JOSE — A cannabis dispensary that’s opened its doors at a high-profile downtown San Jose site has helped bring customers, retail sales, foot traffic and jobs into the city’s urban core.
Purple Lotus Downtown San Jose Dispensary is now operating at 66 West Santa Clara Street and its owner and founder, Matt Krishnamachari, is seeing encouraging signs in the cannabis retail outlet’s early days of being in business.
“People are super happy to see a cannabis store that’s not in an industrial area,” Krishnamachari said. “A lot of people who work downtown and live downtown are excited to see this kind of business close to them.”
Located a few blocks from bustling San Pedro Square, the Purple Lotus cannabis dispensary is in a prime spot to entice customers.
“We have very little merchandise retail left in downtown San Jose,” said Mark Ritchie, president of Ritchie Commercial, a real estate firm that arranged the Purple Lotus lease. “Cannabis clubs are part of mainstream retail. This kind of retail brings more people and customers to the downtown.”
Purple Lotus leased 2,100 square feet on the ground floor of a commercial building at the corner of West Santa Clara Street and Lightson Alley.
“Downtown San Jose has a lot of events going on here, the comedy improv, street fairs, nightclubs and restaurants,” Krishnamachari said. “That helps bring people to the downtown and our store. We get a lot of people coming in who are just walking by.”
The downtown location for Purple Lotus will be an addition to its current operations. The dispensary will maintain its San Jose location at 752 Commercial Street, where Purple Lotus maintains a thriving in-person and delivery retail business.
As a result, the downtown site represents an expansion for Purple Lotus and a very different type of retail operation than the Commercial Street site.
Purple Lotus employs 139 people, including the two retail stores. The company, which is San Jose’s No. 1 weed dispensary, is in hiring mode.
“We have ramped up hiring,” Krishnamachari said. “We have hired an additional 20 team members and we are still hiring. Most of our employees are San Jose locals.”
If Purple Lotus boosts the downtown San Jose economy, that would be a welcome turn of events for the city’s urban core.
As with many central business districts nationwide, downtown San Jose is battling to recover from the brutal economic dislocations ushered in by wide-ranging business shutdowns to combat the spread of the coronavirus.
Even after the end of the shutdowns, workers have returned to the office, especially in downtown districts, at an uneven pace.
“We have to adjust to a lower population and reduced employment base in downtown, so we need unique kinds of businesses like Purple Lotus,” Ritchie said.
Ritchie pointed to the success of the Urban Putt miniature golf course venue and the upcoming Unofficial Logging ax-throwing business as other examples of unique merchants for downtown San Jose.
Business and political leaders are scrambling to find ways to drum up merchants, visitors, residents and office workers for downtown San Jose.
Purple Lotus appears to be filling that need in its early weeks of operation in downtown San Jose.
“We have had a lot of people who don’t necessarily use cannabis who go inside to check it out,” Krishnamachari said. “The canna-curious have been coming in.”
On April 30, the U.S. Justice Department took an initial step to make marijuana use a less serious federal crime and remove it from a category that includes heroin.
Cannabis would be officially classified as a Schedule Three drug, meaning it would be deemed to have a moderate to low potential for physical and psychological dependence.
The proposed changes, if they become final, would potentially reduce criminal penalties for marijuana use as well as encourage private investment in the sector.
The brighter landscape for marijuana companies could spur sales for cannabis retailers.
“It increases the amount of cash we can take to reinvest in our business,” Krishnamachari said. “We hope to get better banking terms. It’s part of the normalization of our industry.”
Short-term, Krishnamachari hopes the new store will be a bright spot locally.
“Our store provides an economic boost for downtown San Jose,” Krishnamachari said. “There are certain things people want to have downtown, and the presence of a cannabis store will encourage things even more. We can be a driver for activity downtown.”
