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FEDS PUT MISSION POT CLUB IN CHOKEHOLD

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."