BEVERLY — A plan to open a marijuana dispensary on Cabot Street has gone up in smoke.
A company called Seagrass was planning to open a dispensary at the site of the current Cafe Salerno restaurant. But the company’s CEO said Wednesday that the two sides were unable to reach a lease agreement for the site.
“For a variety of reasons we just weren’t able to get to closure on 73 Cabot St.,” Seagrass CEO Chip Tuttle said.
The dispensary was approved by the state’s Cannabis Control Commission last July and received final approval from the Beverly Zoning Board of Appeals in August. The plan called for Seagrass to lease the Cafe Salerno building from Todd and Michael Rotondo, who have owned and operated a restaurant at the site since 1997 and would have moved it to another location in Beverly.
Todd Rotondo said Wednesday that the approval process for the dispensary took so long that “the numbers no longer worked.”
“Time killed the deal,” Rotondo said. “It’s been over four years now and the industry has changed.”
Tuttle said that while the market for recreational marijuana has changed, he and his company are still interested in opening a dispensary in Beverly if they can find another location.
“The market is clearly different now than it was two or three years ago, but we still think that there’s room for a third dispensary in Beverly if the development and business parameters make sense,” he said.
Tuttle said the dispensary that Seagrass operates in Salem, which opened in 2020, “continues to thrive, even in a market that’s more challenging than a couple of years ago.”
Seagrass would have been Beverly’s second marijuana dispensary. The first one, Panacea Wellness, opened on Enon Street last April. Another dispensary is under construction at 350 Rantoul St.
Seagrass first applied to the city to open a dispensary in 2019 at the former Beverly Glass building at 282 Rantoul St. but was not selected. City regulations say that marijuana stores cannot be located within 2,000 feet of each other, so Seagrass had to look for a new location after the 350 Rantoul St. site was approved.
Mayor Mike Cahill signed a host community agreement with Seagrass for the Salerno’s site in July 2022. The agreement called for the company to pay the city an annual “impact fee” equal to 3% of the store’s gross revenue, the same percentage the other dispensaries have agreed to pay. Seagrass also planned to invest more than $600,000 in improvements to the Salerno property.
Cahill said he did not know why the deal between Seagrass and Salerno’s fell through. But with five dispensaries in Salem and a potential for four in Beverly, “There was going to be a saturation point at some point,” he said.
“I don’t know if that is being reached. But it seems to be a quieter sector than people initially thought it would be,” he said.
Todd Rotondo, who is Beverly’s Ward 1 city councilor, said he and his brother now plan to stay at 73 Cabot St. and continue operating the restaurant there.
“We’re disappointed that it didn’t happen,” he said of the dispensary deal.