Lynnette Shaw, the self-styled godmother of medical marijuana dispensaries in California, announced this week that she will reopen her medical cannabis dispensary in Fairfax.
Proving the wisdom of Alexander Graham Bell’s maxim — “When one door closes, another opens” — Shaw broke the news at a public hearing Tuesday during which county supervisors denied 10 applications to open medical cannabis dispensaries in various locations throughout unincorporated Marin.
There are no licensed businesses selling medical cannabis or medical cannabis products from storefronts in Marin, although a number of medical cannabis collectives deliver into the county.
“I’m happy to be a pressure-relief valve for the county,” Shaw said.
When Shaw opened the Marin Alliance for Medical Marijuana in 1996, it was the first medical marijuana dispensary in the state to operate under the auspices of Proposition 215, California’s Compassionate Use Act. But in 2011, a crackdown launched by Melinda Haag, the San Francisco-based U.S. attorney for the Northern District of California, shut down the Marin Alliance.
Now Shaw says she has resolved all of her legal problems and she plans to pick up where she left off, possibly as early as next week, operating the dispensary at the same site, 6 School St. The dispensary will be open from 9 a.m. to 9 p.m., seven days a week.
Shaw required no approvals from the town to reopen the dispensary because her use permit was still valid.
“Normally, if you close your business and don’t operate it for six months your use permit expires,” said Fairfax Town Manager Garrett Toy. “But in this case it was an involuntary closure so that meant her use permit was still active.”
Fairfax Councilwoman Renee Goddard, who serves on the board of the Ross Valley Healthy Community Collaborative, said, “I’m OK with Lynnette operating again. I think that she was a responsible dispensary owner, and she certainly didn’t violate the terms of her use permit. She has provided an important medical service for people.”
Goddard said other people have recently inquired about applying for a license to operate a medical cannabis dispensary in Fairfax. The town’s ordinance allows for up to three.
Denise Bowman, who spoke in opposition to a medical cannabis dispensary opening in Forest Knolls during Tuesday’s hearing, said, “I believe Lynnette is going to be the answer to West Marin’s problem — if there is a problem. We know we have to drive over the hill for everything so we can stop by Lynnette’s and pick up our medical marijuana.”
Speaking about Shaw’s Fairfax dispensary during the same hearing, Supervisor Katie Rice said, “That business operated for years very well in Fairfax.”
Shaw said she warned some of the applicants seeking a county license that “neighbors in Marin like peace and quiet.”
She said she held on to her patient records and hopes to recoup many of her former customers. Shaw said when she was forced to close the dispensary, about 100 patients a day visited the storefront with each visit lasting 10 to 15 minutes. At the time, her dispensary was one of the largest sales tax contributors in Fairfax.
While Shaw’s dispensary didn’t feature an armed guard at the entrance as some do, it did have a security camera. It is situated close to Fairfax police headquarters.
“The town of Fairfax police can run there in 45 seconds, which is faster than driving,” Shaw said.
She said there are now many more delivery services operating in Marin than when she was forced to close, but she doesn’t fear the competition.
“I know how the business works,” Shaw said. “I know where the price points are, and I think the people of Marin have been getting overcharged for the last five years.”
She said delivery services are charging an average price of $18 a gram for medical cannabis. She plans to charge $10 a gram and may make free deliveries.
Alex Poggio, who operates Delta 11, a delivery-only dispensary based at 70 San Pablo Ave. adjacent to the Civic Center, said his lowest price for a gram of medical cannabis is $9.99 with delivery included for free.
“I can’t speak to other delivery services, but I doubt that they are charging much more,” Poggio said.
Return From Exile
For Shaw, the reopening of her dispensary is like a return from exile. When her business was shut down she lost everything.
U.S. attorney Haag threatened Shaw’s landlord, Farshid Ezazi of Orinda, with confiscation of his School Street building if he continued to allow the dispensary to operate there and required him to sign an agreement that he would never again rent to Shaw. The Fairfax dispensary was among dozens statewide that federal prosecutors said they targeted due to their proximity to parks, schools and other facilities used by children.
At about the same time, Shaw said she was notified by the Internal Revenue Service that she owed more than $10 million in back taxes; the IRS was disallowing all of the Marin Alliance’s business deductions. She was forced to declare bankruptcy.
Shaw couldn’t work for other medical cannabis collectives because she had been operating the Fairfax dispensary despite a federal injunction against her dating back to 1999; federal law continues to list cannabis as a controlled substance.
“My car got repossessed; my house was foreclosed on; I couldn’t work anywhere, and I had federal agents following me — they’re the ones that have the Ivory Ford Crown Victorias with DEA special agent stamped on the side,” Shaw said.
The tide began to turn, however, in 2015 when U.S. District Judge Charles Breyer ruled that the injunction barring Shaw from working in the medical cannabis business is unenforceable as long as a congressional prohibition on expending funds for challenging California’s medical cannabis law remains in effect.
The final hurdle for Shaw to clear was her former landlord’s agreement not to rent to her. Shaw said in March an out-of-court settlement was reached with U.S. attorneys that lifted the ban.
She said that when Haag attempted to use the same strategy to close Harborside Medical Center in Oakland and Berkeley Patients Group, they had the financial resources to fight back in court.
“After battling for several years, they worked out a deal that the land would not be forfeited over a licensed dispensary,” Shaw said. “We used their case as the model for our settlement.”
But Shaw stills owes the IRS money, even though the IRS eventually accepted her deductions for buying cannabis, reducing her tax debt by $3 million. Shaw said she was able to negotiate her debt down further after declaring bankruptcy.
“It’s manageable,” she said.