Another One Beats the Feds - April 6, 2016 - SF Weekly
SF Weekly

Another One Beats the Feds

If you needed more proof that boom times are here again for the medical cannabis industry — and here to stay — look no further than 15th Street in the Mission District.

When Barack Obama was first elected in 2008, the California marijuana industry exploded. The president said medical marijuana would be left alone; people interpreted that to mean it was open season on weed. The Justice Department, which issued a memo in 2009 stating that “limited federal resources” shouldn't be used to bust cancer patients growing a handful of pot plants, as they were under Bush, only seemed to egg them on.

After the state flirted with legalization and then decided against it at the ballot in November 2010, that same Justice Department started sending letters to select medical cannabis dispensaries' landlords. They weren't friendly: the clubs were too close to schools, the letters said. Shut it down, or be prosecuted and have your building seized.

At the time, nobody quite knew what to do. Some cannabis dispensary operators wanted to fight. After all, they were just following state law — they kept saying, over and over again — and nobody ever proved they weren't. But how? Weed was federally illegal, and no elected officials in San Francisco would take a stand on their behalf. (Watching mayors and city councils in Oakland and Berkeley speak out and call on Obama to lay off only made it sting harder.)

I remember standing in a downtown law office one fall morning, listening to a marijuana lawyer pontificate about states' rights, the fallacy of the drug war, and Obama's broken promises, while his clients — who would a few months later voluntarily close rather than risk prison — stood silently off to one side. Approached for questions, they managed only tight-lipped smiles and platitudes. They had double jeopardy: they owned their building, as well as the marijuana store.

A year later, about one-third of the city's medical marijuana storefronts would close — not a lot, you might argue, but Uncle Sam was shuttering more local-law-abiding businesses than at any time since (the other) Prohibition. It would get worse: Four years ago, in April 2012, federal agents raided Oakland-based Oaksterdam University's offices and grow houses, as well as a private home. (The only person ever charged with a crime was one of the protesters who showed up, busted for shoving an agent.)

Now, in 2016, weed is a winner. All the presidential candidates are varying shades of down. There's talk that Obama will remove cannabis from Schedule I of the Controlled Substances Act on his way out of office, officially reclassifying it as suitable for medical use and scientific study.

And after watching newcomers as well as the lucky survivors rake in some of the reported $2.7 billion Californians spent on marijuana in 2015, some of the dispensaries that the federal government closed almost five years ago are coming back.

Only one San Francisco dispensary — Shambhala Healing Center, near the New Mission Theater — had the gall to fight the feds in court. Rather than seize the property — a nuclear option that was probably always a bluff — the feds eventually took a cash settlement from the dispensary's landlord, which, a judge ruled, meant the weed sellers could stay. Another dispensary further down the road on Mission, shut down after only a few months in business, quietly reopened under a new name and new operators. The feds, if they noticed, did nothing.

To make its return to business last month, Medithrive — at Mission Street near 15th — had to play the waiting game. (Disclosure: Medithrive is an SF Weekly advertiser.)

Medithrive shut down its storefront but kept a delivery service going. This was smart — it meant its city-issued licensed to sell cannabis was still “active,” in bureaucratese. (Other shuttered clubs trying to come back have been told by the city their old permits are no longer good.) They also had the good fortune of owning their building, meaning their old space was still available (and not rented to someone else at double or triple 2011 rates).

Last fall, after the state passed medical marijuana regulations — and after a U.S. District judge ruled recent budget moves by Congress meant the Justice Department was barred from taking further action against a marijuana business obeying state law — the green light was on for good.

Misha Breyburg, one of Medithrive's operators, was one of the people standing quietly in the law office that day. “I think I told you then, 'We're in this for the long haul,'” he told me recently. “I always believed it was a temporary setback… I really did believe we were on the right side of history.”

It's hard to argue with that. San Francisco's marijuana industry is bigger every year. The city just added another dispensary in Dogpatch, and a dispensary in the Castro District is moving up the street to a new location almost double in size.

Obama's war on weed was always a half-assed affair, like keying your neighbor's car when you knew he was asleep.

At the time, then-U.S. Attorney Melinda Haag said the dispensaries were shut down because they were close to schools — and that she received many complaints from concerned citizens who wanted the clubs shut down. (A FOIA request filed by SF Weekly for these complaints turned up nothing.)

All the crackdown did was delay the inevitable. Makes you wonder why they ever bothered.