“I saw you on ‘Pot Barons!’” a customer says at the Brighton Boulevard marijuana shop Starbuds as she spots owner Brian Ruden.
Ruden, a former tax lawyer, has appeared on three episodes of MSNBC’s documentary TV show, which focuses on Denver-area marijuana entrepreneurs. He poses for a photo with the woman before she steps out of the store.
Ruden, 39, is one of the co-owners of the Starbuds chain of medical and recreational cannabis stores. And he’s got a plan to keep growing his reach.
Ruden intends to open two new stores in Colorado by the end of the summer, bringing the total to six. He’s also expanding Starbuds’ grow operation with a 2,000-square-foot warehouse that will have 40 1,000-watt lights.
Starbuds’ two new stores will be in unincorporated Adams County and Pueblo.
The Pueblo shop, which Ruden has leased for the last six months, will be ready to open in May.
“We just got our recreational license approved by the city last month,” Ruden said. “We still need to have contractors bid on the project.”
The situation surrounding the Adams County Starbuds is a little hazy. Ruden has found a location for the store but is still negotiating the terms of the lease.
Starbuds’ license to sell marijuana in Adams County was serendipitous, according to Ruden. On Jan. 27, Adams County randomly selected three licensees to sell recreational pot out of a pool of 1,608 applicants.
“They basically pulled names out of a hat,” Ruden said. “Luckily, someone that I know was drawn.”
That applicant didn’t have the infrastructure or expertise to run a recreational store, so Ruden and his friend Salim Wahdan offered their services in exchange for co-ownership.
Ruden is financing the expansion by reinvesting Starbuds’ cash flow into the new locations.
“It’s a little scary, but it’s a calculated risk,” he said. “You can never forget the fact that it is illegal, so that presents a lot of challenges. The business is also becoming more competitive and there are more players in the industry.”
The interiors of both stores will be based off of the design of the Aurora shop. That store, which opened in November, was designed by Starbuds from the ground up instead of being converted from a previous pot shop like the other locations.
“It’s like designing my dream dispensary,” Ruden said.
The average marijuana store sells about 30 pounds of pot a month, according to Ruden. To ensure that both stores will remain stocked, Ruden is expanding Starbuds’ cultivation base with the addition of a 2,000-square-foot facility.
“I’m expanding my grow by about 40 lights, probably in the next 60 days,” he said. “That’s specifically because I have an outlet – that’ll be Pueblo and Adams. If I didn’t have that, I wouldn’t be expanding my grow operation.”
Producing more pot isn’t necessarily the key to success for marijuana stores today. Most growers churn out as much product as they can in huge operations, which has left the market high on its supply.
“At the beginning of 2014, wholesale price of pot was $7,000 a pound,” Ruden said. “Now it’s $1,200 to $1,300 for a pound – that’s less than a quarter of what it was.
“The issue isn’t keeping up with demand, the issue is where to sell your inventory.”
Ruden opened the first Starbuds location with his business partner Ghada Joudeh on Brighton Boulevard in August 2013. Ruden then purchased another store in Louisville, Joudeh rebranded her Citi Med store near DU to Starbuds and the duo built the newest store from the ground up in Aurora.
Moe Joudeh, the manager of the DU Starbuds, came up with the chain’s name.
“As soon as I heard it I knew that was the name,” Ruden said.
Before becoming a pot baron, Ruden was a tax attorney at Omni Financial. He is a graduate of DU’s Sturm College of Law.