Pubdate: Mon, 13 May 2013
Source: San Francisco Examiner (CA)
Copyright: 2013 SF Newspaper Company LLC
Author: Chris Roberts


Justice Department's Attempt Is First Such Move in S.F.

The landlord's eviction proceedings against Shambhala Healing Center 
last year failed because the site complies with state, though not 
federal, laws.

The U.S. Department of Justice is moving to seize a Mission district 
building that houses a city-licensed medical marijuana dispensary - 
the first time such an action has been taken in San Francisco.

Melinda Haag, the U.S. attorney for Northern California, filed a 
forfeiture proceeding May 6 against 2441 Mission St., a commercial 
building between 20th and 21st streets where Shambhala Healing Center 
has operated on and off since early 2011.

The federal government can at any time seize cash or property 
acquired via the sale of illegal drugs. Medical marijuana, while 
legal in California, is a banned substance under the federal 
Controlled Substances Act.

Haag has moved to seize buildings in Oakland, Berkeley and Marin 
County because they housed cannabis dispensaries, but this is the 
Justice Department's first forfeiture action against a San Francisco 
landlord, according to records.

The dispensary was one of eight San Francisco pot clubs whose 
landlords began receiving letters from Haag, starting in fall 2011. 
The letters warned of stiff prison sentences and forfeiture 
proceedings if the clubs were not shut down.

Shambhala Healing Center shut down in summer 2012 after receiving a 
letter from Haag in February 2012. Property owners Ebrahim and 
Valentin Poura, of Beverly Hills, then attempted to evict the 
dispensary from the building they have owned outright since the 1970s.

However, since the dispensary had a long-term lease and did not 
violate state or local law, Shambhala could not be evicted through 
the state courts system, where eviction cases are heard, according to 
Eric Safire, an attorney for the Pouras.

"We did everything within our legal bounds to comply [with Haag's 
demands]," Safire said. "The tenant has a lawful business ... and a 
lawful, long-term lease."

The dispensary resumed operating as a storefront business in November 2012.

Staff at the dispensary contacted Thursday and Friday declined to 
comment to The San Francisco Examiner. Troy Wiggins, an attorney for 
Shambhala, did not respond to a request for comment.

The eight dispensaries recently shut down in the Tenderloin, South of 
Market and Mission districts were within 1,000 feet of parks or 
playgrounds, according to the Justice Department letters.

San Francisco's zoning law prohibits dispensaries within 1,000 feet 
of schools, recreation centers or other buildings that house youth 
services, but it does not specifically mention parks.

Haag targeted Shambhala because of its proximity to a minipark on 
Capp Street and Jose Coronado Playground at Folsom and 21st streets, 
according to court filings. City records, however, show that the 
playground is closed and is not currently operated or occupied by The 
City's Recreation and Park Department.

All of the dispensaries that have received letters also followed 
state and local law, including payment of state sales taxes, 
according to records. San Francisco dispensaries must pay about 
$10,000 in fees and receive permits from the Department of Public 
Health and the Planning Department before they can open. State and 
local sales taxes are due on all marijuana and marijuana products sold.

There are about 25 dispensaries in San Francisco currently in 
operation. Haag has issued letters to at least two of these 
businesses, according to sources. Two other dispensaries are 
currently seeking permits.

Mayor Ed Lee has remained mostly quiet about the federal crackdown, 
though Lee was one of several mayors of California cities to formally 
ask the state Legislature to revisit the state's medical marijuana 
laws. With few statewide regulations, the result is a patchwork of 
often-conflicting local rules.

"Our position is that The City needs to do something about this," 
Safire said. "They accepted the permit fees - we went through all the 
rigmarole to get the permits, and now they are sitting on their hands."

"All we're doing is operating lawfully," Safire said. "If we were 
violating the law, we wouldn't have a permit."
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MAP posted-by: Jay Bergstrom