It's not easy to open a medical cannabis dispensary in San Francisco, but it's very easy for patients to purchase their medicine from the comfort of home — even if the service is illegal.
Delivery services operating in seeming violation of city law advertise in print and on the Web, and operate in full knowledge of city officials, who say their hands are tied.
Meanwhile, the U.S. Department of Justice has shut down five licensed storefront dispensaries in The City since October, yet has not taken action on unlicensed delivery services.
San Francisco law requires vendors distributing marijuana to 10 or more people to obtain a medical cannabis dispensary license from the Department of Public Health. State medical marijuana law provides for nonprofit collectives or cooperatives to provide cannabis to people with a doctor's recommendation, but does not specifically address delivery services.
More than a year ago, Kevin Reed of The Green Cross -- which was then San Francisco's lone licensed delivery-only dispensary -- asked city officials to "level the playing field" between businesses such as his, which must pay local and state taxes and $8,656 in dispensary permit fees, according to The City's 2005 Medical Cannabis Act, and the roughly 19 delivery services at the time that advertised here.
Unlicensed delivery vendors escape paying fees by being based or claiming to be based outside city limits, according to Dr. Rajiv Bhatia, director of occupational and environmental health at the health department, which "did not anticipate" the legal wrinkle.
"These delivery establishments may be operating outside the bounds of state law," Bhatia said in an e-mail, adding that "confirming the nature and location of these operations require the use of surveillance and investigational tools not available to the Department of Public Health" and is the purview of law enforcement.
Melinda Haag, the U.S. attorney for Northern California, has shut down five of San Francisco's 26 licensed storefront dispensaries since an October news conference where she announced medical marijuana providers violating state and local law would be prosecuted. Spokesman Jack Gillund said Haag's office would not comment on the delivery services.
San Francisco currently has three licensed delivery-only dispensaries: The Green Cross, Medithrive and Divinity Tree. The latter two went delivery-only after the Justice Department shut down their storefront locations in the Mission and Tenderloin neighborhoods, respectively.
Two delivery services operating without city permits in San Francisco do have business licenses on file with the Office of the Treasurer and Tax Collector, policy and legislative manager Greg Kato said — Foggy Daze Delivery is registered as "Business Services, Except Advertising," and Nature's Relief has a license for "Other Retail Stores."
Foggy Daze Delivery has a business address in San Jose, according to records on file with the secretary of state.
Representatives for SF Green Delivery and Foggy Daze declined to comment on their businesses.
Other municipalities in the Bay Area regulate delivery services based outside their city limits. San Francisco's Medical Cannabis Task Force, a City Hall body created to recommend policy to the Board of Supervisors, included a recommendation to regulate out-of-town delivery services in its annual report, issued in the fall. To date, no legislative action has been taken.
Unlicensed delivery services "play in a legal gray area, and it isn't fair," said Shona Gochenaur, a marijuana activist with low-income patient network Axis of Love who sits on the task force. "This loophole needs to be closed."
Medical marijuana collectives doing business in San Francisco are required to pay taxes to both the state and The City.
$381,000 Local sales tax revenue in 2011 from city's 26 dispensaries
$8,656 Dispensary permit fee charged by SF
$4,019 Dispensary license and annual inspection fee in SF
$0 Cost to deliver medical marijuana in SF while based outside The City
$0 Tax collected from such delivery services
Source: Ted Egan, city's chief economist
Medical cannabis delivery services offering marijuana to patients in San Francisco. None have operating permits from the Department of Public Health.
SF Green Delivery
California Green Medical
The Union Collective
The Greener Side
Mr Purple Skunk