Sacramento’s pot king opens a dispensary near Arden Fair unlike anything in the city. And it’s huge

Sacramento’s largest marijuana entrepreneur has opened the area’s largest cannabis dispensary – a megastore unlike anything the city has seen before.

The Kolas megastore features multiple video screens displaying cartoons, videos of rock concerts and scenic spots, pop artwork on the walls and electronic music playing in the background. It’s all part of a new experience aimed at enticing consumers to buy an array marijuana products placed in spacious display areas.

But at a Wednesday night preview party for the megastore, the boxes containing edibles with cannabis, vape pens and pre-rolled joints were just props or empty boxes. City of Sacramento officials only approved the opening of the facility hours earlier and the permit to open to the public wasn’t to be ready until Thursday morning.

The Kolas megastore, nearly across the street from the Arden Fair mall, is the latest venture by Garib Karapetyan.

Karapetyan and business partners own six dispensaries in Sacramento and several large cultivation facilities in the city, which supplies several thousands pounds of marijuana each year to dispensaries throughout California.

A new hemp division supplies CBD products including in states where marijuana is not legal.

All together the defacto pot king’s empire employs around 500 people in Sacramento, including the 20 to 40 that will be working in the new dispensary.

“We want to put Sacramento on the global cannabis map,” said Karapetyan, who believes the fun atmosphere will help generate cannabis sales.

Karapetyan is no stranger to scrutiny

There has been some controversy along the way for Karapetyan, who entered the medical marijuana industry in Sacramento in 2007 after a career in the wholesale leather garment industry.

A 2020 report from the Sacramento city auditor found that lax city regulations allowed Karapetyan and four business partners to switch ownership shares and control of their dispensaries in 2018 and earlier years, allowing the company to dominate the recreational marijuana marketplace in Sacramento with multiple locations.

City rules had limited dispensary ownership to one per ownership group, a fact that Karapetyan disputes.

The city auditor report came after The Sacramento Bee published the results of an investigation that found that city rules were being violated in the transfer of businesses by Karapetyan and other dispensary owners in the city’s legalized dispensary business.

Karapetyan insists the city policy changed in 2019 without warning and he always followed the rules.

Regardless, Karapetyan faced no penalties, and is opening the new dispensary, even though the city’s 30 standard dispensary licenses are already taken. The city has granted 10 new licenses, but those licenses are reserved specifically for victims of the war on drugs before marijuana was legalized.

Sacramento officials allowed Karapetyan to open his new, nearly 8,000-square-foot dispensary in exchange for closing a smaller dispensary of around 1,800 square feet on Florin Perkins Road in an industrial section of Sacramento.

“This is a relocation of the business,” said city spokeswoman Jennifer Singer.

The new cannabis megastore is almost three times larger than any other cannabis dispensary in Sacramento.

The Arden Fair area location was a challenge

What’s unusual about the new dispensary besides its entertainment component is it sits in a shopping center across from Hobby Lobby, Famous Footwear and Petco, instead of an industrial area.

Sacramento dispensaries are located mostly in industrial sections with an exception being a cluster of dispensaries in midtown, because city officials were initially reluctant to have them in visible areas.

Karapetyan said, and city records confirm, that it took four years to obtain permission to open the dispensary in a shopping center. He said the long process was because of attitudes that cannabis businesses had to be hidden.

“It’s unethical to pay taxes. It is unethical to have employees. It is unethical to go above and beyond and do everything right, but yet be treated as if you’re some sort of a vice or some sort of illicit business,” said Karapetyan who immigrated to the United States from Russia as a child with his family.

He said the renovation of the vacant bank building cost $500,000 alone and that his ownership group had been paying rent for several years while it awaited regulatory approval.

The Sacramento City Council approved allowing dispensaries in shopping centers in 2020, but Karapetyan also needed a zoning variance. The shopping center housing his dispensary was considered a development not eligible for a cannabis business.

An April 2021 Sacramento Planning and Design Commission approval concluded that the dispensary was in line with city rules that “promote the development of high-density urban centers that are readily accessible by transit and contain a dynamic mix of retail, employment, cultural, and residential uses.”

New concepts – and new markets

The several hundred people who attended the opening party Wednesday night included top customers of other Kolas dispensaries. They were given $100 gift certificates to come back Thursday or on a future days to buy marijuana products, since the cannabis could only be purchased after Karapetyan and his associates had the final city permit in hand.

The new facility also includes a discussion and demonstration area, though under state law, demonstrations about cannabis are limited to discussions. On Wednesday night, a representative from Lolo, a company that supplies the rolling paper for joints, touted the superiority of her company’s products.

Karapetyan is hoping the new dispensary concept will help broaden his customer base.

“We want to bring seniors that are interested in learning about the products for anything that might be of value to them on a therapeutic level,” Karapetyan said.

A little help from a former Sacramento King employee

To create the immense experience inside the dispensary, Karapetyan hired Scott Monaco, the former senior director of fan experience at the Sacramento Kings.

Monaco, who attended the pre-opening party, said dispensary visitors who see a different experience during visits because videos and artwork will rotate.

A subcompact German smart car sitting on the dispensary floor will be wrapped by different artists every several months, part of the art experience, he said.

“We want people to have fun when they come here,” Monaco said.

The artwork includes pop artwork depicting former President John F. Kennedy smoking pot, an assertion that some argue is true, but has never been proved.

Is this the future of dispensaries?

As for his other cannabis dispensaries in the industrial area of Sacramento, Karapetyan said he is working on a plan to eventually close them and reopen larger, new locations in more shopping centers and other visible parts of Sacramento.

He said he expects his competitors will do the same.

“I think if we’re doing anything with this location,” he said, “it’s showing cannabis stakeholders that this is an evolution that continues.”

Kolas Arden will be open daily from 7 a.m. until 9 p.m.

This story was originally published July 14, 2022 at 12:49 PM.