Dispensary threatened with closure plans to challenge feds 

click to enlarge Catherine and Steve Smith are fighting a federal order to shut down San Francisco's oldest continuously operating medical marijuana dispensary, HopeNet Cooperative. - CHRIS ROBERTS/SPECIAL TO THE S.F. EXAMINER
  • Chris roberts/special to the s.f. Examiner
  • Catherine and Steve Smith are fighting a federal order to shut down San Francisco's oldest continuously operating medical marijuana dispensary, HopeNet Cooperative.

A San Francisco medical marijuana collective plans to fight the law after receiving a shutdown notice from the U.S. Department of Justice.

HopeNet Cooperative, The City’s oldest continuously operating storefront dispensary, has occupied ground-floor commercial space at 223 Ninth St. in South of Market since 2004, city records show. On Feb. 21, Northern California U.S. Attorney Melinda Haag sent HopeNet’s landlords a warning that the dispensary must close within 45 days or the property could be seized and the owners sentenced to prison time.

Similar letters from Haag have led five other San Francisco dispensaries to shut down since Oct. 7. The letters warn of 40-year prison terms and asset forfeitures if the “marijuana distribution” is not stopped.

But HopeNet plans to remain open past the Friday deadline, operator Catherine Smith said.

“We’re staying,” said Smith, whose dispensary received a similar letter from Joe Russoniello, Haag’s predecessor, in 2007. HopeNet also was raided by the Drug Enforcement Administration in 2005.

Property records indicate Clay Investments LLC is the owner of HopeNet’s property, which is a tenancy-in-common building. Clay Investments is connected to a realty firm operated by Ben Hom. Neither Hom nor his partners responded to requests for comment.

HopeNet appears to be the first San Francisco dispensary to challenge the federal government.

Smith, along with husband Steve, faxed a stack of 1,200-odd petitions, along with protest letters, from cooperative members and neighborhood supporters to Haag’s office, Catherine Smith said.

The dispensary asked city leaders to sign the petition. They declined, but plan to speak in support of dispensaries at a City Hall news conference Tuesday, Catherine Smith said.

Jack Gillund, a spokesman for Haag, said the U.S. Attorney’s Office had no comment on HopeNet.

Haag’s office began forfeiture proceedings against a Marin County dispensary that had not left its property by the 45-day deadline. That dispensary ended up leaving willfully after its landlord began eviction proceedings. Eviction proceedings, however, are performed in state court, where medical marijuana law is valid. A to-be-evicted tenant also can request a jury trial, real estate attorney Dave Crow said.

This theory -- that a federally threatened dispensary could win during the eviction proceedings, prompting federal prosecutors to take further action -- has yet to be tested.

Also, there’s another legal wrinkle.

“We’re a cooperative,” said Catherine Smith. “Even if I wanted to shut down, there are 1,200 votes saying we should stay open.”

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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