Your Money or Your Livelihood: Pot Dispensaries Decide to See How Serious the Justice Department Is

In the drug war, San Francisco is more like no man's land than it is a combat zone. Or it could be territory already lost to the enemy, if you're a prohibitionist or a drug warrior.

In 2011, the federal Justice Department started sending marijuana dispensaries around the state a simple message: Close down, or we seize the building and throw you in jail. That threat, issued via registered mail, shut down about a third of San Francisco's licensed and taxpaying pot stores and hundreds more across the state.

Yet some wondered if it was a bluff. Would the feds really follow through with an asset forfeiture proceeding and take over Bay Area real estate?

We might find out in January.

Only four Bay Area dispensaries have decided to see if the feds are serious by taking them to court: Harborside Health Center's two locations in Oakland and San Jose, and Berkeley Patients Group in that city — which happen to be three of Northern California's busiest and most-successful weed stores — and Shambhala Healing Center in the Mission District.

Harborside and BPG, both of which have enjoyed letters of support from their cities and their mayors, are still in court — the legal process will have ground on for two years as of July — and are still selling weed and paying taxes in the meantime.

Shambhala, which has not had help and has fought its legal battle alone since it began a year ago, has to shut down by January. If it doesn't close, and/or if the dispensary's landlord can't pay a $150,000 fine, the feds say they'll take the building, a vow they made in court documents filed last month.

But here's the thing: The club has to somehow be convinced to end the fight and close the shop willingly. The landlord can't throw it out.

The dispensary is in a modest, nondescript single-level commercial space in the Mission Miracle Mile, a stretch of once-gritty real estate that thanks to the tech boom might as well be paved with gold.

Ebrahim Poura, the dispensary's Beverly Hills-based landlord, would rather eat glass than have some of the country's hottest real estate taken away from him and sold at auction by the federal government. He stands to profit mightily from a sale, judging by property records: The space's assessed value, limited by state law at the price of last sale, is under $140,000. On the open market, it could be worth 10 times that or more.

But Shambhala has signed a long-term lease, locking it in place until 2017. Poura's tried to evict the dispensary already, saying that selling weed breaks their rental agreement. And it might, in other states. But this is California: You can sell weed here. A state judge ruled the lease legal and threw the eviction proceeding out.

Through his attorney, Eric Safire, Poura has declined to comment. Dispensary operator Al Shawa (who ran a clothing store in the space before shifting to weed) and his attorney are also staying quiet.

Before he went mum, Shawa asked me to write about his main beef: Not that his dispensary was getting shut down — though he was definitely no fan of that — but that it was getting the boot while other pot clubs, including one a block away, were doing a booming trade with no problem.

And indeed, Purple Star MD — one fixie-pedal up Mission Street, in the same building that used to house legendary rooftop bar Medjool — is proving popular. It has a great selection of concentrates, a buy-one-get-one special, and gets plenty of business for cheap eighths of bud, an industry insider who works for another dispensary told me. “They're killing it lately,” he said.

Selling weed is still a dicey investment in 2014. No one's really sure why the feds have gone after those particular businesses. The local U.S. Attorney has claimed it's all about the kids, with playgrounds and schools nearby, though that didn't really make much sense when two of the clubs shuttered were in the Tenderloin.

It's not a war zone, but the random salvo still takes people out. Slowly.

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