Green rush, interrupted

It’s been more than a month since the feds cracked down on medical cannabis. How are California dispensaries doing?

Protesters converged on downtown Sacramento’s federal courthouse at I and Fifth streets last week to protest the federal crackdown on medical cannabis.

Protesters converged on downtown Sacramento’s federal courthouse at I and Fifth streets last week to protest the federal crackdown on medical cannabis.

Photo By Steven Chea

Northern California’s embattled medical-cannabis industry is cautiously open for business again this week, and remains busy dispelling rumors of its demise.

Perhaps half the dispensaries in Sacramento County have reportedly shut their doors either permanently or temporarily, according to field reports. Fewer closures were reported in the city of Sacramento.

Two of San Francisco’s 29 clubs—Medithrive and Divinity Tree—closed November 11, in response to the October 7 press conference by federal prosecutors targeting medical-marijuana users. After threatening perhaps hundreds of dispensary landlords across the state with forfeiture, federal prosecutors forced the relocation of Oakland dispensary Coffeeshop Blue Sky. A similar round of saber-rattling caused half the clubs in San Francisco to close in 2004. The forfeiture letter tactic was last used under President George W. Bush in 2007.

However, many NorCal-area dispensary operators are reporting business as usual, while fact-checking what the feds are up to and urging patients to protest what watchers are calling a law enforcement PR stunt.

“Patients are coming in really scared,” said Harborside Health Center founder Steve DeAngelo. “The top three rumors are: Harborside is going to close, all the dispensaries are going to close and the feds are going to end safe access to cannabis in California.

“Our message is real clear: Harborside Health Center has no intention of closing,” he continued. “We made a commitment with our patients when we opened five years ago.”

The largest club on the West Coast has a long legal fight ahead of it since the IRS disallowed its business deductions, slapping the nonprofit with $2.5 million in back taxes, DeAngelo said. Backed by a national legal fund, the fight against the IRS could take two years, he said.

In Sacramento, Americans for Safe Access regional liaison Courtney Sheats said clubs are closing out of fear, while others were hit with bank-account seizures that forced their closure, and others have received landlord letters forcing their eviction. “It’s a multifaceted attack. I would assume it’s coordinated.”

ASA state spokesman Kris Hermes said the capital’s foul enforcement climate mirrors worst-case scenarios playing out in San Diego. “I think Sacramento is one of the areas that’s been hit the hardest, from what I understand, dozens of facilities in the unincorporated county have been shut down. It’s our little San Diego in Northern California.”

A targeted city operator who asked for anonymity said, “All the patients are really freaked out. People that work at dispensaries are freaked out. People involved in anything related to dispensaries—insurance, packaging—are afraid of their livelihood being taken away.”

He said federal authorities have singled out model operators like Harborside and Northstone Organics for enforcement as a way to send a message to all clubs that no one—not even locally permitted businesses—are safe from federal law.

The actions have also made the Sacramento City Council suspend its process to further permit more dispensaries.

“I think they want the dust to settle,” Sheats said.

Elsewhere in NorCal, cities like Oakland continue to process applications. In Berkeley, major dispensaries such as Berkeley Patients Group and BPCC were open. A Berkeley Patients Group receptionist said their medication lounge—singled out by federal authorities—was open as well, though patient verification procedures have been ratcheted up.

In San Francisco, popular clubs such as SPARC, the Green Door, the Vapor Room, Waterfall Wellness and others remained open. The Green Door’s Sacramento location closed, but its San Francisco shop still serves patients.

On the other hand, “pot shops” in battleground California counties remain under heavy fire. In San Jose, patients are up in arms, not because of the federal actions but because of local opposition.

San Jose is the home turf of the California Narcotics Officers Association, and dispensaries there are fighting an existential threat, said Matthew Witemyre, an organizer for the United Food and Commercial Workers labor union.

A group of dispensaries has filed more than 50,000 valid signatures to stop the city council from forcing all clubs to close, he said. “San Jose patients already feel like they are under attack.”

Witemyre said he was unaware of any federal raids, but several threatening landlord letters have gone out in the area. Some clubs in San Jose have preemptively closed their doors, according to scattered reports.

With some 1 million patients and an estimated 2,000 clubs in California, the best the federal authorities can do, watchers say, is target egregious profiteers and exporters, make an example of industry leaders, and fire off threatening letters to everyone else.

In October, Coffeshop Blue Sky operator Lee said that the federal crackdown amounts to “rear-guard” action in the face of overwhelming opposition to the drug war. “They want to drag it out as long as they can.”

On October 20, California Attorney General Kamala Harris finally spoke up on the issue, releasing a statement urging federal officials to “focus their enforcement on ‘significant traffickers of illegal drugs.’”

Witemyre called it a good first step. “But I think it’s not enough, considering that if we had a national referendum, legalizing marijuana would beat [President] Barack Obama.”