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After the Crackdown: America's Oldest Dispensary Hangs in There - By - October 28, 2014 - SF Weekly
SF Weekly

After the Crackdown: America's Oldest Dispensary Hangs in There

Charley Pappas shortly before the feds put the TL pot shop owner out.

With its organic nurseries and converted auto body shops selling artisanal barbecue, Berkeley's San Pablo Avenue hardly resembles a war zone.

But step into a clean and well-lit former mechanic's space, where a bubbling fountain placed just inside the door offers a hint of peace, and you're on the front lines of the war on drugs.

This is Berkeley Patients Group. By virtue of turning 15 years old this Friday, the dispensary is now laying claim to the title of California's oldest medical cannabis dispensary, which also makes it the longest-running legal dealer of marijuana in the United States.

That's 15 years in a competitive, semi-legal industry fraught with risk. The last three years have been the hardest, as the federal Justice Department has been working to put BPG out of business.

It's a passive kind of conflict. BPG used to inhabit a bigger, space age-style auto showroom a few blocks away. There, it sold more than $16 million worth of marijuana in 2009, according to documents dug up by California Watch. Then the Justice Department's statewide crackdown on marijuana businesses began.

Melinda Haag, the local United States Attorney and a Berkeley resident herself, tried to shut BPG down in 2012 with a forfeiture action. That succeeded only in chasing the dispensary down the street. Happy to play whack-a-mole, the government is now laying claim to the current location with a drug-related asset seizure.

That's locked up in court right now, on indefinite hold while BPG's savvy attorney trades pretrial motions with Haag's prosecutor (the government is currently trying to access BPG's tax records; a judge rejected that request earlier this month). BPG has reason to stay and fight. All the seers say California is on its way to legalizing marijuana in 2016 (when the right billionaires will be generous enough to fund a ballot initiative). Having a successful marijuana operation in place beforehand is a wise business move.

And BPG has been buoyed by the local power structure. In addition to vocal support from the mayor and the local congresswoman, legal help from the city attorney has been offered. It doesn't hurt that the dispensary is one of Berkeley's bigger taxpayers.

As brisk business continues as if nothing were amiss, there is talk that the government is looking for an exit strategy, a way to cede the field gracefully. The feds might actually lose this war of attrition.

From his home not far away in the Berkeley hills, Charley Pappas sees this and seethes.

Not long ago, Pappas was one of the Tenderloin's most beloved drug dealers. From the seat of his wheelchair (he was shot in a robbery 40 years ago which left him a quadriplegic), Pappas, his partner, and about 15 employees sold some of San Francisco's best marijuana from a small Geary Street basement storefront.

By all accounts, they were model citizens. The crack and heroin dealers were less visible, the block a little cleaner, and aside from at least one daytime rip-and-run of the product, the 900 block of Geary was a bit safer with city-licensed cannabis dispensary Divinity Tree in business.

That's all over now. The difference between Pappas and BPG is that he did as he was told. And, as he's finding out, he had the bad luck of doing business in San Francisco.

When the feds came down on him three years ago saying that the pot shop was too close to one of the Tenderloin's playgrounds and had to go, he shut down. Roughly one-third of the city's pot clubs went with him.

(One other city pot club, Shambhala Healing Center, is also fighting the feds. That club also hired BPG's lawyer, who stopped taking Pappas's phone calls about two years ago. “I wasn't paying him, I guess,” he says.)

Now Pappas is trying to reopen. Divinity Tree is the only pot shop closed during the crackdown to make a serious effort to return, and the city isn't helping.

Instead, the city is making it harder.

A permit to sell marijuana in San Francisco in 2014 is akin to getting a license to print money. Unknown to Pappas, his permit also had an expiration date.

Marijuana shops closed down for whatever reason (in his case, some extreme, extenuating circumstances) must be re-opened within 18 months. Otherwise, they're considered “abandoned,” city zoning bureaucrats say.

That came as a shock. Until that point, “We were never told that we had to re-open in 18 months,” he says.

This means restarting the permitting process all over again. That can take years, after a suitable location and willing landlord is found.

Pappas has support from his local supervisor, Jane Kim. Otherwise, he's had no help from City Hall, he says.

He's hoping for “some sign of support from the city.” Or ideally, “I'd still like to have the permit,” he says. “I think we deserve it.”

He'll go before a city appeal board early next year to beg for his dispensary license back. By then, he'll have been closed for more than three years.

Maybe it would have been smarter to call the government's bluff. In some places, that's been good for business.