San Francisco pot clubs face uncertain future


ABC7 has learned that pot clubs which received a letter from the U.S. attorney two months ago, have voluntarily shut their doors. It was a unique strategy by the government that appears to have worked -- side-step the pot clubs and go after their landlords.

A closed sign posted on the front door of the Divinity Tree Pot Club in the Tenderloin District says it all. The medical cannabis dispensary chose to close rather than fight eviction by their landlord.

In early October, the four U.S. attorneys in California said they were cracking down on profiteers who had infiltrated the medical marijuana business. In San Francisco, U.S. Attorney Melinda Haag went after four pot clubs operating too close to schools and parks. She threatened their landlords with arrest and seizure of their property if they didn't kick the dispensaries out.

"It looks like the U.S. attorney has won this round," San Francisco attorney Brendan Hallinan said. "They've succeeded in shutting down the four dispensaries that they targeted."

The Sanctuary Dispensary, a couple of blocks from the Divinity Tree, was still busy with customers, but it will close its doors next month.

Medithrive and Mr. Nice Guy, both in the Inner Mission, have already shut down. Medithrive now has a delivery business.

Hallinan does admit that Haag was more measured in her actions than her other counterparts in the state.

"In San Diego, they chose to shut down all the dispensaries and take a very aggressive stance," Hallinan said. "In the eastern district in Sacramento, they've been in the middle. They shut down some of the larger dispensaries, probably about 50 percent."

A recent court ruling poses even more problems for pot clubs in the city.

"The question that was addressed in this case is whether local governments can regulate medical cannabis dispensaries," Matt Dorsey with the San Francisco City Attorney's Office said. "The court of appeal in a case in Long Beach decided that federal law pre-empts so that local governments don't have the ability to do that."

"This would effectively undermine all of the progress that we've made to regulate medical cannabis in California," Hallinan said.

San Francisco has now suspended all applications for new permits from pot clubs. That freeze affects about six new applications for permits in San Francisco. And of course, the court decision itself applies to all cities in the state which have dispensaries.

The ruling is now on appeal to the California Supreme Court. They are expected to decide next month whether to hear it. But for now, no new pot clubs in San Francisco.

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