Lala Herzog trims marijuana leaves at Medicine Man marijuana dispensary, which its owners say has ambitions of becoming a national brand. (Hyoung Chang, Denver Post file)

Family’s business ambitions: Become Costco of marijuana (series)

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The brothers took a $125,000 investment from their mother and her husband and leased a warehouse at 4750 Nome St. in an industrial section of Denver’s Montbello neighborhood. There are so many grows nearby, the area is known as “Potbello.”

A dispensary needed to be in the plan because the state required grows to be connected to a store rather than operating as wholesalers.

The Williamses set that goal of becoming the Costco of marijuana, offering 70 strains at competitive prices and nothing too fancy.

But mostly, the brothers poured money into perfecting their grow.

There are nine grow rooms, where a forest of plants is flowering. One 150-foot-long room called The Green Mile holds row upon row of plants in a vegetative state, “the factory that feeds the machine.”

At every turn is a lighting rig, drainage system or other contraption invented by Pete, a born tinkerer who likes to sit in front of his fireplace at home, smoke cigarettes and jot ideas on napkins.

The trim room where workers wearing ear buds cut the flower from the plant sounds like a barber shop — snip, snip, snip.

On one desk, a computer displays trim performance metrics, with squiggly lines for each employee tracked against production goals. Andy is a numbers guy, a process obsessive. The data is analyzed monthly.

Sixty-five video cameras are trained on the property. Security guards patrol the alley and monitor cameras inside. A $35,000 charcoal air filtration system eliminates pot smell coming out of the building.

“We really are trying to industrialize a hippie process,” said Pete, 43, whose two grown children also work at Medicine Man.

According to Andy, Medicine Man is the single largest dispensary in Colorado. Other companies sell more through multiple locations, but no one location moves more pot, he said. He declined to provide figures, citing competitive concerns.

With success has come outside interest. Last fall, Andy walked into an ornate ballroom at the Denver Athletic Club and along with other budding pot moguls pitched his businesses plan to the ArcView Investor Network.

The 3-year-old endeavor, based in California, brings together investors willing to bet on marijuana-oriented businesses.

Williams said he walked away with about $1.4 million in loans from seven people. Because out-of-staters cannot own a stake or hold shares in Colorado marijuana businesses, the investors earn their profit from interest — in this case, 18 percent.

After the investment pitch, the guy who grew up dirt poor attended an after-party on the pool deck of the Four Seasons hotel.

Nomadic childhood

As young children, the Williams siblings were nomads, following their mother from marriage to marriage and town to town, from Washington state to upstate New York to California and Colorado.

There was a period living in a trailer park, when meals of noodles with butter were the norm and Spam on Sunday night was a treat.

Their mother, Michelle, held down three jobs at one point, including working the graveyard shift at a sewing factory. She would fall asleep at stoplights. The kids would yell “green light!” to wake her.

Those early years were formative, the Williams siblings said, instilling in them a survival instinct and drive to succeed.

Andy said all the moving — the kids changed schools three times one year — made him a good enough fighter that no one hit him. Pete learned to make friends easily. Sally, the eldest, became the protector, a role she never gave up.

The family settled for good in Denver, putting down roots that eventually led the brothers into business with each other.

Not everyone was convinced of their plan, including Sally, who rebuffed their invitation to invest. She was always the steadiest of the bunch — homecoming queen, valedictorian, head cheerleader.

“Andy had so many failed businesses in the past,” she said. “I just wasn’t sure whether he was capable of doing it or sustaining it. Pete … both of them are such risk-takers that I thought it might not be a good combination to have risky behavior times two. I didn’t necessarily advise against it. But I wasn’t willing to give them money.”

She eventually joined the company in May, coming out of semi-retirement after working in pharmaceuticals, real estate and running a continuing education business to work as Medicine Man’s controller.

Sally Vander Veer is 46, married, lives in a nice suburb, has a 14-year-old daughter, a 16-year-old son and a car that smells like weed.

She said she had reservations about working in the industry because of the stigma and impact on her children. Vander Veer tells them it’s their choice whether to smoke pot, but they must wait until they are 21. She views it as a positive her job leaves her little choice but to talk about it.

“I kind of used to apologize for it,” she said. “Now it’s just a statement of fact I work at my family’s dispensary, and that is why I smell like pot.”

Countdown to Jan. 1

The buildup to Jan. 1 was a mad rush — applications, hearings, inspections, a quickie renovation to add temporary additional space for recreational sales, making sure 5,000 plants got radio-frequency tags so the state can track inventory through the process.

Medicine Man did achieve its goal of opening at 8 a.m. on Jan. 1, which Andy believed was imperative to winning and keeping customers in what is shaping up to be a cutthroat business.

Driving to work that morning, Andy Williams felt a pain in his chest. He was anxious, short of breath and wired from having slept all of 2½ hours.

It was still dark, not even 5 a.m. He pulled out a cigarette to calm his nerves, part of a pack-a-day habit. A blue suit Sally had picked out for him at Men’s Wearhouse hung in the back seat.

Snow was in the air, and a line had formed at the door when Williams pulled into the employee parking.

There were so many unknowns. Would five people show or 500? Would supply hold up? How would Medicine Man be portrayed on CNN and French television, both of which had cameras in the lobby?

“Good morning,” Williams said, greeting his customers like a politician working a rope line. “Happy Independence Day.”

There were some glitches. Power was knocked out briefly in the back, and cash registers on the medical marijuana side of the business stubbornly refused to accept recreational purchases.

By day’s end, Williams said 680 people purchased pot at Medicine Man on Jan. 1, three times the amount of the medical dispensary’s best day.

He said the store moved 15 pounds of marijuana and took in $93,000.

Denver City Council members, regulators from the state Marijuana Enforcement Division and a state legislator stopped by, and several told reporters nice things about how mellow the crowd was.

Late in the afternoon, Andy Williams could finally take a breath. He had long since changed out of the suit he wore for TV interviews, slipping into one of the countless short-sleeve polyester and rayon Medicine Man-embroidered shirts he wears no matter how cold it is outside.

The line to get in still wrapped around the building. Ninety minutes before closing, anyone still waiting in the cold and snow was handed a coupon and invited to come back another day.

Williams was so focused on getting open, the significance of the occasion didn’t hit him until he talked to customers and heard the cheers as they walked out the door Jan. 1.

“The common theme I heard was, ‘freedom,’ ” said Williams, who does not use marijuana. “People were celebrating — relieved.”

Williams was more relieved than anything. The strategy of stockpiling weed and an accompanying price hike seemed to work.

While other stores ran low and restricted sales or even shut their doors, Medicine Man has kept the bud coming. Williams increased prices again — from $45 for an eighth to $50 — in response to market forces.

Even with those steps, Williams said the weed is not likely to last, especially if customers shut out elsewhere head to his shop.

Williams projects he will likely run out of supply by March. His grow expansion into vacant space next door will not be complete until spring. The first harvest will probably not be until June.

But at least for a moment, he could relax.

On Green Wednesday, the family-owned pot shop passed its first big test.

Eric Gorski: 303-954-1971, or

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