San Francisco medical marijuana industry on upswing following string of club closures 

click to enlarge Kevin Johnson and the other co-owners of the Barbary Coast Collective will be opening their doors soon at 952 Mission St. - MIKE KOOZMIN/THE S.F. EXAMINER
  • Mike Koozmin/The S.F. Examiner
  • Kevin Johnson and the other co-owners of the Barbary Coast Collective will be opening their doors soon at 952 Mission St.

Ask any small-business owner: Starting a new venture, getting in the black, growing and expanding — it’s not easy.

And that’s without the risk of federal law enforcement swooping in at any time, seizing everything, shutting down the operation and then tossing the owners in prison for good measure.

Yet there appears to be no shortage of entrepreneurs willing to risk all of the above and get into the once-stymied, now-growing-again San Francisco medical marijuana trade.

Last year, three new storefront dispensaries opened in the Mission district, Outer Mission and downtown.

Two more, on Mission Street and Jessie Street in South of Market, opened in January, putting the total number of licensed marijuana clubs in San Francisco at 22. Another plans to debut by June in the Excelsior district. And more have filed initial operating paperwork with the Department of Public Health.

This follows what seemed in October 2011 to be a crisis situation for The City’s licensed and taxpaying medical cannabis dispensaries. Back then, the U.S. Justice Department mailed letters to dispensary landlords warning of property seizures and stiff prison terms if the illegal “pot shops” were not shut down.

Within a year, eight dispensaries closed. But almost a year has passed since the last letter.

Initial investments can reach hundreds of thousands of dollars before the first day of sales, dispensary operators say.

One challenge is that city and state law prohibits a cannabis club from opening within 1,000 feet of a park, school or other area where youths are served. That leaves nearly 90 percent of San Francisco off-limits. Within the limited area, the so-called “green zone,” a compliant landlord must be found and a storefront rented before an operating application can be filed.

The operators of the Barbary Coast Collective, at 952 Mission St. near Mint Plaza, received initial approval from the Planning Department to open for business in 2011. Then the federal crackdown came.

Almost two years later, the dispensary — the second union shop organized by United Food and Commercial Workers in San Francisco — is ready to open. But there’s lingering reluctance and fear — the operators did not want their full names used by The San Francisco Examiner, and of the new collectives doing business in The City, only Barbary Coast consented to an interview.

The dispensary is paying for armed security and cleanup crews, along with community improvements in Mint Plaza. These are concessions dispensaries often make in order to appease neighbors.

It’s a risky business as well as an expensive one, but, “We want to be on the right side of history,” said Brendan Hallinan, an attorney for Barbary Coast, which has already received “over 1,000” registrations from people with prescriptions to use marijuana.

There also is a feeling that the U.S. Justice Department has, in the words of President Barack Obama, “bigger fish to fry” than medical marijuana clubs, and that the country’s attitude toward the drug is changing since Colorado and Washington residents voted last year to legalize marijuana.

“I believe we’re witnessing the end of prohibition as we know it,” said Dan Rush, national director of UFCW’s medical cannabis and hemp division, “and the beginning of regulation.”

About The Author

Chris Roberts

Chris Roberts

Chris Roberts has worked as a reporter in San Francisco since 2008, with an emphasis on city governance and politics, The City’s neighborhoods, race, poverty and the drug war.
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