Pipe Dreams Dispensary – a Jar and a Dream and a Decade of Legality

By Brian Bahouth

The road to opening the first licensed cannabis dispensary in Lincoln City, Oregon, begins on a waterway in Florida. Randy Mallette and his wife, Kelly, had been living an ultra-low-stress life on a sailboat since moving to Florida from the Oregon coast in 2002. Six years later, Kelly became pregnant and they moved back to Lincoln City to be near family.

Randy worked as a waiter in Lincoln City until the tips dwindled during the winter months. Then he managed a restaurant in Newport—an ultra-long-hours, stress-filled job that quickly became unsustainable with the birth of his first child in January 2009.

Shortly after their return to the Oregon coast, Randy started suffering from chronic nausea and vomiting. He began cultivating cannabis as a registered medical patient and grower in order to alleviate his symptoms. The cause turned out to be a benign tumor in his chest, and once that was removed, his symptoms went away.

Around that same time, Randy’s mom was diagnosed with a terminal form of cancer. He went on medical leave and became her caregiver. And he found that cannabis was helpful to her too.

I recently visited Pipe Dreams dispensary and spoke with Randy Mallette.

“I would make a little chicken broth for her and a little bit of cannabis in that, and it would help her stomach. She couldn’t really eat. When she was in the hospital, all she could eat was blended foods. She couldn’t eat anything, but she could sip that, and it helped.

“And then she didn’t have to take these little morphine pills, so she wouldn’t just be sitting there like she was in a coma. Basically, she wanted to be alert enough to talk and share family stories. And cannabis was magic for her.”

“Mom was in her seventies back then, and I figured she probably had a lot of friends that were in the same sort of situation where cannabis might help them with [disease symptoms or] even aches and pains the way it helped Mom.”  

Mallette is quick to say that cannabis doesn’t work for everybody and for every malady, but the plant’s beneficial impact on his own health and his mother’s final quality of life was a profound lesson for him.

Oregon voters approved ballot measure 67 in 1998, an initiative that legalized the cultivation, limited distribution, and consumption of cannabis for medical purposes. In light of their own positive experiences with cannabis, Randy and Kelly began to muse about the potential to operate a medical cannabis dispensary in Lincoln City, although the state did not issue the first license for a medical dispensary until March 2014.

Initially, the Lincoln City government said no to medical cannabis dispensaries.

“My wife and I, we went to the City Council meetings, didn’t miss a one. We argued for the right to exist and went for coffee with the mayor. [Then–Lincoln City Mayor] Dick Anderson used to do that a lot. And at one point he said to us, ‘Well, if you don’t get to open now, you can open maybe next year or something, if we do it then.” 

“And I was like, ‘Well, let me explain to you how this works. I have a baby at home,’ and at that point we had a new baby, our second. ‘I have used up every cent I have just to have the building and the space we’ve rented.’”

But Oregon law mandates that a cannabis dispensary must be at least a thousand feet from a school. 

“Originally we were down at another spot, but St. James [Church] opened a school 976 feet from the property that we had rented. Ironically, that’s where our kids went to school for years, but they kind of shut us down before we even opened,” Mallette explained. “So we spent all this money over there that we couldn’t recoup. 

“My attorney at the time explained how easily we would lose that case in court when they pull up a map and they do a measurement, and it’s ‘If/then.’ There’s no gray area.”

Finding a retail location for the first cannabis store in Lincoln City and Lincoln County was a minefield. There are numerous zoning restrictions and facility requirements, and in 2014, the notion of a licensed marijuana retail outlet was groundbreaking. Federal illegality combined with the stigma of cannabis use presented immense obstacles.

“We scrambled, and nobody would rent to us,” Mallette said. “They were afraid. One guy said it would ruin his excavating business if he rented to us. He was afraid of the backlash, and he had a place at the south end of town. ‘Okay, no hard feelings, I guess.’  We were gonna sign papers. But his wife heard of it and said no.

“Okay, I respect that. I get it. I’m married, I understand. That was the fear behind it. People didn’t want to rent [to us]. 

“But Joe Tam, we met him here, and he had a For Rent sign in the window. And he was a little skeptical at first. He’s like, ‘Well, is it legal?’

“‘Yeah, absolutely it’s legal,’ I told him ‘I’m not trying to break the law. I just want to help people.’ And he said, ‘If it’s legal, okay.’ 

“So he rented us this little spot when no one else would.”

Mallette’s medical cannabis dispensary, Pipe Dreams, was the first to be licensed in Lincoln County. Sales officially began on May 21, 2014.

In November 2014, Oregon voters approved Measure 91, an initiative that legalized the nonmedical cultivation, use and retail sales of cannabis to people 21 years of age and older.

Pipe Dreams started selling adult-use cannabis on October 1, 2015, which was the first day that Oregon allowed operating medical dispensaries to sell to an adult. Pipe Dreams was part of what the state called the Early Start Sales Program while regulators created a permanent licensing system. 

“I built all the counters, that shelf there. I did a lot to just get the place ready to open,” Mallette said. “And then we grew, and he [Joe Tam, the building owner] wanted to retire [and sell the building], and we had people walking around the building inspecting it and asking how much we were making.

“And I was like, ‘Look, I don’t talk to my friends like that. I don’t even know you.’ And I told my wife back then, ‘You see that guy’s shoes?’ We didn’t have any money. We were living on fumes and we’re local people, no different than most of the people around here. I told the wife, ‘That guy’s wearing shoes we can’t afford. I can’t afford his shoes, and the rest of the suit I can’t touch.’

“So the Tams came to me, and they’re like, ‘Look, we want to retire. I’ve had the building for sale for a while, and these guys are offering cash. They’re going to buy it. 

“‘But they let it slip that the only reason they want the building is they want your business.’”

“We had been doing it for a couple years at that point, and [Joe]’s like, ‘You guys are here every day, all day. You work hard. You’re a good family. There’s no pressure. You can say no. I can write you a lease for 10, 20 years, whatever you want, but people like this, they find a way to break that lease easily. So I’m just telling you, this is the situation. If you want, I’ll sell it to you.’”

Mallette knew he would not qualify to borrow the sum needed to buy the building, but Joe Tam had so much confidence in Mallette that he agreed to hold the mortgage. 

“He will forever be one of my favorite people. I have nothing but love for the Tams,” Mallette said with a smile.

Reminiscing about the early days, Mallette recalled, “It’s been a crazy ride. And what I can tell you is we opened to help people. We opened with a jar and a dream. It was a jar of something I’d grown, Shishkaberry, and I remember people came in, and this one guy was like, ‘All right, so what have you got? What are my choices?’

“I’m like, ‘Well, I got this Shishkaberry.’ That’s what I had. And they’re like, ‘I guess that’s what it’ll be, then.’ Our first day, we made $20, and I can remember calling the wife all excited when  we made a hundred bucks. And we grew, and as it went up, it was just exciting.”

Lincoln City is currently home to seven dispensaries. Initially, the city licensed four. Mallette put self-interest aside when civic protests against retail cannabis prompted the city to consider limiting the number of licenses to those four. An abiding commitment to the legal cannabis movement prompted him to speak out. 

“We were protested by churches, and that’s when I learned there’s 22 churches in the area, at least back then there were, and 12 of them were protesting us and our existence. There were four of us back then, and they didn’t want anybody else. And so they were going to limit it to four, which would have given us almost a monopoly, the four that were here. 

“I was the only one. I went to the city and argued against [capping the number], and most people look at me like you are right now, like, ‘Why would you do that?’ To me, it was more important for the movement. Remember, it was still a young movement. 

“And if we look at the Constitution and we look at a free market, limiting [licensing] to just us [four] didn’t feel fair, so even when it cost me a lot, I still went and argued [for more than four licenses]. And now there are multiple more in town. And not one of them has ever said, ‘Hey, thanks,’” Mallette said with a laugh.

Looking back on more than a decade of operation, Mallette sees Pipe Dreams as the fulfillment of a long-elusive vision.

“It’s been better than I could have ever imagined. We named it Pipe Dreams because everybody, and I mean everybody, even my family members, would tell me how stupid I was. ‘That’s just another pipe dream. Put it away.’

“So it was a fun way of saying, ‘Hey, family…’” Mallette chuckled. “Because every one of them and my attorneys, in years past, before we opened, said we would never get to a point where I’d be able to do this in America in my lifetime. That’s what I was told repeatedly. It was never going to happen in my lifetime. ‘Live a different dream. Find something else. It’s never going to be a thing.’ And here we are.”