Pub date August 14, 2012


Just a couple years ago, it seemed like the golden age of marijuana in San Francisco, the birthplace of the movement to legalize medical pot and a national leader in creating an effective regulatory framework to govern an industry that had become a legitimate, respected member of the business community.

More than two dozen patient cooperatives jumped through a variety of bureaucratic hoops to become licensed dispensaries, most of them opening storefront businesses that were often the most attractive, clean, and secure retail outlets on their blocks, sometimes in gritty stretches of SoMa, the Tenderloin, or the Mission.

“Pretty much everyone involved agrees that San Francisco’s system for distributing marijuana to those with a doctor’s recommendation for it is working well: the patients, growers, dispensary operators, doctors, politicians, police, and regulators with the planning and public health departments,” I wrote in “Marijuana goes mainstream” (1/28/10).

Since then, San Francisco’s medical marijuana industry has only become more established and professional, complying with new city regulations (such as changing how edibles are packaged to avoid tempting children), paying taxes and fees — and making very few waves. According to city officials, there have been almost no complaints from anyone about the dispensaries — and in San Francisco, people complain about everything.

But in the last six months, the full force of the federal government has brought the hammer down hard on this budding business sector, forcing the closure of eight brick-and-mortar dispensaries and instilling paranoia and insecurity in those that remain.

In just the past few weeks, two of the city’s oldest and most respected dispensaries –- HopeNet and the Vapor Room -– were forced to close their doors.

There’s been little rhyme or reason to which clubs get those dreaded letters warning operators and landlords to shut it down or be subject to asset forfeiture and prison time — and the officials involved have refused to explain their actions, except with moralistic anti-drug statements or unsupported accusations.

“These are people who played by the rules and paid their taxes, and now they’re being punished for it,” said Assembly member Tom Ammiano, a leader in creating a state regulatory framework to govern the distribution of medical marijuana, which California voters legalized in 1996. “This is pure thuggery. They are ignoring due process out of blind prejudice and ambition.”

Ammiano met with Melinda Haag, the US Attorney for the Northern District of California, who has coordinated the local crackdown from her 11th floor office in the Federal Building near City Hall, shortly after she announced her intentions to go after medical marijuana. He said she was like a throwback to a less enlightened era.

“In talking to Haag, not only is she a bit of a bully, but she’s totally uneducated about the issue,” Ammiano told us. When she told him that her office has received many complaints about the dispensaries, he asked to see them -– even making a formal Freedom of Information Act document request –- but she has yet to produce them. “Her duplicity is very moralistic, it’s like going back 100 years.”

Neither Haag nor anyone from the White House or Justice Department would grant an interview to the Guardian to discuss the reasons for and implications of the crackdown, or to answer the list of written questions her office asked us to submit. Instead, Haag gave the Guardian this statement and refused to respond to our follow-up questions:

“Although all marijuana stores are illegal under federal law, I decided to use our limited resources to address those that are in close proximity to schools, parks and playgrounds and operations so large that they constitute marijuana superstores. I hope that those who believe marijuana stores should be left to operate without restriction can step back for a moment and understand that not everyone shares their point of view, and that my office has received many phone calls, letters and emails from people who are deeply troubled by the tremendous growth of the marijuana industry in California and its influence on their communities.”

But in San Francisco, where more than 80 percent of residents consistently support medical marijuana in polls and at the ballot box, most people don’t share Haag’s point of view. And city officials contest many of her claims, from saying the dispensaries are “left to operate without restriction” to her implication that they promote crime or endanger children to the haphazard way she has targeted dispensaries to the characterization that many people are “deeply troubled by the tremendous growth of the marijuana industry.”

In fact, to talk to city officials, virtually nothing Haag says is true.

“We’re not getting nuisance complaints [about the dispensaries],” Dr. Rajiv Bhatia, the city’s medical director who oversees regulation of the dispensaries by the Department of Public Health, told the Guardian. “We’ve had very few complaints over the years and good cooperation with the storefront part of the regulations.”

Almost across the board, city officials and club operators praise one another and the cooperative relationship they’ve established over the last four years. Some of San Francisco’s biggest dispensaries have somehow avoided Haag’s wrath, but their once-open operators are now afraid to speak publicly, warily checking the mailbox each day. A thriving industry eager to pay its taxes and submit to regulation is being driven back underground, with all the uncertainty and hazards that creates.

“The question everyone is asking: Why here, why now, why these businesses? Nobody knows the answer,” Bhatia said. “We’re left to speculate and guess about motives.”


The federal crackdown has been stunning in both its speed and breadth, with various federal agencies coordinating their attacks. The IRS is auditing the biggest clubs and denying write-offs for routine business expenses, the DEA is threatening asset forfeiture efforts, and Haag and the DOJ are threatening prison time and court injunctions.

Underlying all of that is President Barack Obama, who pledged not to use federal resources to go after those in compliance with state law in the 17 states where medical marijuana is legal. Then, last year, Attorney General Eric Holder suddenly announced a new policy: “It will not be a priority to use federal resources to prosecute patients with serious illnesses or their caregivers who are complying with state laws on medical marijuana, but we will not tolerate drug traffickers who hide behind claims of compliance with state law to mask activities that are clearly illegal.”

When we sought an explanation and clarification from the White House Communications Office about why well-established medical marijuana collectives carefully operating under California law were suddenly deemed “drug traffickers” that wouldn’t be tolerated, they refused to answer and referred us to a statement Obama made to Rolling Stone magazine.

“What I specifically said was that we were not going to prioritize prosecutions of persons who are using medical marijuana. I never made a commitment that somehow we were going to give carte blanche to large-scale producers and operators of marijuana -— and the reason is, because it’s against federal law. I can’t nullify congressional law,” Obama told the magazine.

That simplistic explanation – which conveniently ignores how people are supposed to get this medicine – has infuriated local growers and patients. It’s particularly galling for those who supported Obama and took him at his word in the last election, and who don’t understand why he is suddenly escalating the federal war on drugs, ignoring local laws and values, and re-criminalizing their communities.


Hundreds of medical marijuana supporters gathered on Aug. 1 for a New Orleans-style funeral procession at the Lower Haight intersection near where Vapor Room had operated -– without incident and with praise as a model business from three successive district supervisors –- from 2004 until the previous day.

The mood was festive and defiant on that sunny afternoon, where advocates from both sides of the bay gathered to express solidarity with the closed clubs and resolve to battle through the recent setbacks.

“I’m feeling the fight,” Steve DeAngelo, star of the reality television show Weed Wars and head of Oakland’s Harborside Health Center, which received Haag’s shut-down-or-else letter last month, told the Guardian. “I don’t think we can allow taking a few hits to break our spirit….We started this struggle to win it and we’re not going to stop until we do.”

Local politicians and business leaders also came to offer their support.

“As president of the Lower Haight Merchants Association, I’m upset that Vapor Room had to shut down,” Thea Selby, who is also running for the District 5 supervisorial seat, told us. “The Vapor Room did a lot of good for this neighborhood and was a great business.”

Marchers, most clad in black, carried “Cannabis is Medicine: Let States Regulate” and other signs -– as well as a makeshift coffin and massive puppet depicting a scowling Haag -– and danced down the middle of the street as Brass Mafia horns belted out lively jazz tunes. By the time the procession reached Haag’s office at the Federal Building, a chill fog had darkened the skies and the mood.

DeAngelo took the bullhorn first and called out Obama directly: “Either you were lying, sir, or your employees are out of step with your policies.” Steph Sherer, executive director of the DC-based Americans for Safe Access, told the crowd, “We need to tell Obama to lose Haag or lose California.”

Ammiano and the other mostly Democratic Party politicians who spoke tried to avoid putting Obama directly into the crosshairs of the angry activists, although he did say those executing this crackdown “are harming Obama’s chances of winning.” He also urged activists to put the pressure on politicians in Sacramento and Washington DC: “We need to be a voice in reshaping what’s happened in these last few months.”

Ammiano said the crackdown “empowers the cartels and the people who use violence,” contrasting that with San Francisco’s civilized approach to regulating marijuana.

“We in San Francisco have been a model for how to regulate this industry and we have been successful. We are not going to let the federal government interfere with our rights in this city,” Sup. David Campos told the crowd.

Cathy Smith, the founder of HopeNet, who was still reeling from watching her club gutted and shuttered the day before, also sounded an angry and defiant tone, urging supporters to make their voices heard by Haag and others.

“Everybody that’s here needs to go up to this evil woman’s office tomorrow and tell them what we think,” Smith said.

The general feeling was that if the feds can target model clubs like HopeNet and Vapor Room –- which had deep community roots and generous compassionate care programs for low-income patients -– then all clubs are in danger.

“I’m very upset that we’re losing two great medical marijuana dispensaries where patients could medicate on site,” said David Goldman, a local ASA activist and member of the city’s Medical Cannabis Task Force, noting how important that is for patients who live in apartments that ban smoking.

HopeNet and Vapor Room were some of the only dispensaries in town where smoking was allowed on site, because they were more than 1,000 feet from schools, playgrounds, or day care facilities, the city’s standard. Bhatia said that’s a very strict standard in a city as dense as San Francisco, which is why only four clubs ever met it.

Yet the feds saw things differently, ostensibly targeting HopeNet because a small private school opened two blocks away last year, and the Vapor Room because the feds didn’t use the city’s standard of being more than 1,000 feet from the playground at Duboce Park, instead deciding the dispensary was a community menace because it was a little under 1,000 feet from that dog-friendly park’s nearest patch of grass.


Vapor Room founder Martin Olive was a bundle of complicated emotions on the club’s last day in business (it will still operates as delivery-only, just like HopeNet, Medithrive, and a few other shuttered clubs have done). Initially, he didn’t want to talk to us: “I’m trying to keep a lower profile because it’s scary out there now.”

But he slowly opened up and tried to describe the feeling of watching his proudest accomplishment so rapidly undone by the one-two punch of a letter from the merchant services company cutting off credit card access (just like every dispensary in the city, returning pot sales to a cash-only status) followed days later by Haag’s shut-down letter.

“It’s complicated emotions that I’m feeling -– let down, confused. At the end of the day, I don’t understand why this is happening,” Olive said. “It’s a community tragedy, it really is.”

Vapor Room was a welcoming gathering place for its members and a supporter of a variety of community events and causes.

“I’ve always treated this as if it were just a nice coffee house. I’m not an outlaw,” Olive said. “I almost forgot I was breaking federal law. It was so normal, so legitimate.”

In fact, some club owners say their establishments helped clean up rough streets. “We took care of the entire block. Before us, it was all dealers, so there’s a safety issue,” HopeNet’s Smith told me as the once-welcoming club on 9th Street near Howard was reduced to bare walls.

Patients were also feeling the pain, including a 48-year-old ex-con who said he was paroled two years ago after serving 25 years in prison for attempted murder. “I have anger issues, big time. The only thing that keeps me calm and quiet and not blowing up is medical marijuana,” he told us, seething, before praising HopeNet’s “homelike environment” and supportive community. “It’s important to sit and relax in an environment that is comfortable and safe. All this is doing is pushing us into the streets.”


Before going through his latest official misconduct battles and fighting to return to his job as the elected sheriff, Ross Mirkarimi was the District 5 supervisor who sponsored the creation of the city’s medical marijuana regulatory system, the product of a long and arduous legislative process.

“We developed the system out of stark necessity because neither local government nor state government gave a roadmap to the dispensaries,” Mirkarimi said. “Prop. 215 legalized medical marijuana, but there were no rules around it.”

After an intensely collaborative process that lasted more than a year, the city in 2005 adopted a process for licensing dispensaries that balanced the needs of this nascent industry with concerns by police, patients, disability rights activists, neighborhood groups, and health officials. Mirkarimi said that maybe it’s time for city officials to consider an idea he floated a few years ago of having the city itself directly distribute medical marijuana through General Hospital.

“I still think that’s a good idea, particularly if the feds are going to force medical marijuana dispensaries back into the dark ages.” For all his praise of the city’s dispensaries, Dr. Bhatia will admit that the industry still needed better oversight -– dealing with issues such as standards for growing and transporting cannabis, fiscal transparency, and potency and dosage standards –- but the federal crackdown has scuttled his efforts to expand the city’s regulatory system.

“This DEA action stops us from making progress on the regulation of clubs that we need to make,” Bhatia said. “There are lots of issues, but we had just finished getting the clubs into their housing.” Now the industry is being driven back underground.

Ironically, Haag and other federal officials have accused dispensary operators of profiteering, which they’ll certainly be more free to do now that local officials have lost their leverage to begin regulating the finances of the supposedly nonprofit patient collectives that officially operate each dispensary.

“That was one of the areas that we never developed the tools or capacity to look at,” said Bhatia, who proposed more transparent record-keeping by dispensaries last year, only to have the operators express concern about how the feds might use that information, which turned out to be an understandable fear.