S.F. Medical Marijuana Dispensaries Close: Jobs, Taxes Go Up in Smoke

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Flickr user animaetrix00
So long
Charles Pappas creates jobs and pays his taxes, to the tune of about 12 full-time, full-benefit positions which start at $20 an hour, and over $200,000 a year to the state Board of Equalization.

The problem is Pappas is chairman of the Divinity Tree, one of the three San Francisco medical marijuana dispensaries which received letters from the federal Department of Justice at the end of September. The letters instructed the dispensaries -- which were too close to either a playground or a school for the liking of federal law, despite "unambiguous" compliance with state law -- to close by the end of business today or face stiff penalties.

Lawyers this week asked a federal judge for a temporary restraining order, a move that could have stayed the government's hand, but a hearing won't be held until next week. So rather than risk the seizure of his landlord's property or the 40 years in prison threatened by U.S. Attorney Melinda Haag, Pappas closed shop.

"Until this latest injustice subsides, there's nothing else we can do," he said, adding that Divinity Tree may join in one of the two lawsuits currently filed in federal court against the feds.
Two other dispensaries received letters from Haag, and are currently weighing their options.

Mr. Nice Guy on Valencia Street and Medithrive in the Mission District also received letters from the feds. It is said that Mr. Nice Guy has become a delivery-only pot dispensary, according to Pappas. However, Medithrive, which is one of San Francisco's biggest, is still "weighing its options," according to a dispensary spokesman.

"It's obviously an extremely difficult time for them," spokesman PJ Johnston said. "They have patients and employees about whom they care very much."

Medithrive is open Friday and plans to be open Saturday, according to Johnston.

Calls to Medithrive's CEO and dispensary manager were not immediately returned. The line at the dispensary was busy when SF Weekly called. A lawyer representing Mr. Nice Guy did not immediately return a telephone message seeking comment.

Jack Gillund, a spokesman for US Attorney Haag, did not immediately respond to an e-mail seeking comment (but considering his last dozen or so responses have been, "No comment," readers can probably fill in that blank with more blank).

SF Weekly will update with more information as it trickles in, but in the meantime, it's certain that the local economy will take a hit.

Pappas estimated his dispensary grosses about $2 million or more annually. At 9 percent sales tax paid to the state, that's $180,000 less to California per year -- plus the 12 to 15 full-time jobs with benefits, and rent to the landlord. Oh, and don't forget the money that went to PG&E to run the lights that grew the medical marijuana.

With a narrow space in the Tenderloin, Divinity Tree is considered one of the city's smaller dispensaries. If all three close, it will mean the loss of dozens of jobs and well over $500,000 in tax revenue.

"It's just sad how smoothly it's all going for the feds," said Pappas, who said he's written to Rep. Nancy Pelosi as well as Gov. Jerry Brown -- who, as the state's attorney general last year, authored a set of guidelines by which dispensaries could operate legally -- without receiving a response.

"We did what you wanted, Jerry -- and now you can't say a word?"

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18 comments
Dee Dee Russell
Dee Dee Russell

The most rude, COLORIST and misogynist thug employees I have met in all of my years of living in San Francisco work at the Divinity Tree! - it  was something out of an Apartheid or Civil rights movie (the thugs are "people of color"!) -they'd treat me and other dark girls like crap then turn and smile to white people.  I wrote a review of the DT on Yelp.  Then some misogynist thug sent me a violent personal note on Yelp which I reported. I don't know how they've gotten away with that horrible standard of customer service. 

 I stopped going there spring 2011 due to stank service. How about treating ALL "patients" the same -with respect, consideration and COMPASSION? 

They closed? Won't be missed by me and the other happy dark girls who they chose to diss.

Isaac Anthony
Isaac Anthony

I've got a great idea, why don't we get our weed from Mexican drug cartels.  What could possibly go wrong?

srslystoplyingtoyrself
srslystoplyingtoyrself

The biggest problem is that people try to circumvent prohibition with the ridiculous idea that marijuana is medicine.  Weed doesn't cure anything except boring movies and terrible music.  To me it's difficult to believe these entrepreneurs who are apparently grossing nigh on 7 figures can't get their shit together and put their "dispensaries" in an area that doesn't bother the majority of the population (ie near schools/kids) and they deserve to have their stores closed.  Also, this "it's so sad they're taking away jobs and losing state revenue" is absolute bullshit.  These guys are just moving down the street.  Trying to sensationalize this closing is exactly what is wrong with the current state of marijuana law.  One one side you have simple-minded idiots like Chris Roberts whose every thought is focused on keeping the status quo of "patients" getting access to "medical marijuana" and on the other hand you have the perfectly rational response of the federal government, whose job it is to UPHOLD THE LAW.  If you want access to marijuana it needs to be generally accepted by the population and reasonably controlled and taxed.  The citizens of this state have voted in the past and do not want legal marijuana.  It becomes the job of the marijuana activists to prove to the citizens that it is beneficial to legalize.  Instead, we have have this ridiculous system of bad doctors giving bad recommendations and a few entrepreneurs capitalizing on the situation under the guise of compassionate care.  There is absolutely no question why the feds are stepping in.  It has gone over way over the line of "looking the other way" and they can't simply ignore the fact that anybody who wants to can smoke marijuana legally in this state.  There is a fucking dispensary across from Bloomingdales for christ sakes.  The continued pretense both by smokers and non-smokers that these dispensaries exist for the sick is the biggest problem that we have and it will likely benefit us all to have a lot of them close.

MrEricSir
MrEricSir

I think you need to loosen that tinfoil hat a bit, it's cutting off the circulation to your brain.

Guyfoxrevo
Guyfoxrevo

Watch "Run from the cure:A Rick Simpson story." Google Cash Hyde. Then you will see that cannabis oil cures cancer. It fights MRSA. And helps cut the dependancy on opiates when used in cojuction for pain management. Inform yourself before you go misinforming others.

Michael Arter
Michael Arter

 Obviously your level of understanding of the Chemistry and bio activity of marijuana matches the level of your manners.  Neither seem to be existent. Do read and get the facts or just keep your mouth shut in reference to topics you have no basic understanding of!

Jfd3vet
Jfd3vet

 To those who think that just because that politician is a Democrat, that they are therefore on our side, is a naive, foolish and  quite misguided belief. They feed from the same swill trough as the Republicans. 

 And as for that aboniation in the Governor's office, I will simply say that I never knew of any public figure with so many opinions who never believed a word of them.Because he does'nt believe in anything. He has not one conviction in his life except Edmund Gerald Brown junior.  

As for what to do about this sad situation, I would recommend supporting the only declared candidate that has been pro medical cannabis from the beginning- Congressman Ron Paul.  

Lorin Stoll
Lorin Stoll

RIP Divinty Tree - my favorite club in SF, they always had the best OG and other Kush varieties. 

Thirdthreshold
Thirdthreshold

why is no one talking about the chronically and terminally ill patients that rely on these dispensaries?? yes we do exist. Our pain is real. I suffer from Chronic Myofascial Pain Syndrome, and Complex Regional Pain Syndrome - 2 of the most painful conditions knownw to man... patients like me have THE lowest quality of life. Marijuana not only effectively treats my symptoms, providing immediate relief, but it has none of the harmful and dangerous side effects of pharmaceuticals. I don't know what i will do if these dispensaries go under. Please visit mpp.org and contact your policy makers. They make it super easy, it wont take but a minute. And please call the White House!! 202-456-1111 to express your opinions.

Guest
Guest

Anyone notice the name?  Hag?  That should tell it's own story...And none of our Congress men or women never seem to take Marijuana issues seriously...It seems to always take someone's family member suffering a dibilitating disease before we get ANY support from legal circles.  I'm telling you all, right now, our Constitutional rights are being trampled on..What ever happened to the right to pursue happiness, and life, and liberty?  Did anslinger, or one of the Bushes change the constitution while we weren't looking?  We are allowed to ship off our children to go off and die for oil, but Heaven forbid the SAME children are NOT allowed to use Marijuanna?  Oh, that's right...I forgot- this is the NEW CHIMERICA....

Chris Corleyone
Chris Corleyone

Can't the county Sheriff, stop this? Correct me if I'm wrong but any county Sheriff has local jurisdiction that supersedes the fed.

Guest
Guest

Sorry, friend, but Federal law supersedes all other law...which needs to be changed...

Nukle_up
Nukle_up

Federal law only Supercedes state law in the case of consttutional amendments, otherwise the 10th amendment lends rights to the citizens of each state to shape their state laws via their states election process.

Guest
Guest

Then please, PLEASE tweet or f/b CONGRESS, because I think someone forgot to tell them...I'm not wanting to argue, just saying if that IS true, then how are the feds able to shut down the dispensaries? 

Malcolm Kyle
Malcolm Kyle

An appeal to all Prohibitionists:

Colombia, Peru, Mexico or Afghanistan with their coca leaves, marijuana buds or poppy sap are not igniting temptation in the minds of our weak, innocent citizens. These countries are duly responding to the enormous demand that comes from within our own borders. Invading or destroying these countries, thus creating more hate, violence, instability, injustice and corruption, will not fix our problem. We need to collectively admit that we are sick. -- Prohibition is neither a sane nor a safe approach; left unabated, its puritanical flames will surely engulf every last one of us.

Most of us are aware by now that individuals who use illegal drugs are going to get high, 'no matter what.' So why do you not prefer they acquire them in stores that check IDs and pay taxes? Gifting the market in narcotics to ruthless criminals, foreign terrorists and corrupt law enforcement officials is seriously compromising our future. If you remotely believe that people will one day quit using any of these 'at present' illegal drugs, then you are exhibiting a degree of naivety parallel only with those poor wretches who voluntarily drank the poisoned Kool-Aid in Jonestown.

Even if you cannot stand the thought of people using drugs, there is absolutely nothing you, or any government, can do to stop them. We have spent 40 years and over a trillion dollars on this dangerous farce. Practically everybody is now aware that Prohibition will not suddenly and miraculously start showing different results. So why do you wish to continue with it? Do you actually think you may have something to lose If we were to start basing drug policy on science & logic instead of ignorance, hate and lies? 

Maybe you're a police officer, a prison guard or a local politician. Possibly you're scared of losing employment, overtime-pay, the many kick-backs and those regular fat bribes. But what good will any of that do you once our society has followed Mexico over the dystopian abyss of dismembered bodies, vats of acid and marauding thugs carrying gold-plated AK-47s with leopard-skinned gunstocks? 

Kindly allow us to forgo the next level of your sycophantic prohibition-engendered mayhem!

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