By Omar Sacirbey
Medical cannabis pioneer Lynnette Shaw is back in business – or, at least, trying to get back in business.
In 2011, the federal government prohibited Shaw, who founded the first licensed medical cannabis dispensary in the country, from working in the marijuana industry ever again as part of a court settlement.
But after winning one of the most significant legal cases against the government over marijuana in October, Shaw is trying to get back to doing what she loves best: run a dispensary.
The 61-year-old believes the legal win gives her the ability to work in the cannabis industry again, and that’s exactly what she is now trying to do.
Shaw plans to apply for one of four new dispensary licenses in Marin County, California, and also has her sights set on reopening her former dispensary, the Marin Alliance for Medical Marijuana, at its previous location. That could potentially require another legal battle, but victory would be a fitting end to the story of one woman’s fight against the federal government.
“Now I can get on with my life,” said Shaw, whose tussle with the government left her with huge debts, facing foreclosure on her home and living on welfare. “I think I deserve a place of my own. Ideally, I’d like to have two dispensaries.”
Shaw opened Marin Alliance in the town of Fairfax in Marin County in 1996, when the cannabis industry was first emerging from the shadows. In 1998, however, the federal government filed an injunction prohibiting Shaw and the dispensary from selling medical marijuana.
Shaw was able to resist until 2011, when the federal government went after her landlord as part of a bigger crackdown in California, threatening to use asset forfeiture laws to take away his property because he rented it to a business violating federal law.
Rather than let her landlord, Farshid Ezazi, lose his property, Shaw voluntarily closed her dispensary. Under the settlement, Ezazi agreed that he would never again rent to Shaw, while Shaw was barred from working in the industry.
Shaw kept up the legal fight, however.
Her efforts finally paid off on Oct. 19, when a California district court judge issued a ruling that said the federal government does not have the right to enforce an injunction against Marin Alliance.
The judge based his ruling on a new congressional law – the Rohrabacher-Farr Amendment – that prohibits the Department of Justice from spending funds on prosecuting cases against medical marijuana providers and patients in states where medical marijuana is legal.
“They’re not going to prosecute any more dispensaries, they can’t,” Shaw said. “They’ve got to obey the law. This is a big deal. I think this is the end of the medical marijuana war.”
Indeed, marijuana advocates saw the case as a precedent, and federal raids have mostly ceased under the Obama administration.
Shaw believes the Rohrbacher-Farr Amendment could help her move back into her old location – and that the law could be cited to prevent the federal government from enforcing the settlement that says Ezazi is forbidden from renting to her.
“We have to go to court and have the settlement declared unenforceable,” said Shaw, who added that Ezazi wants to pursue the case. “We’re raising money for the lawyers.”
That, however, could take several years.
While that situation plays out, Shaw also has her eyes on a two-floor restored farm house in western Marin County on sale for about $700,000. The building meets the county’s requirements for how far dispensaries have to be from schools, parks and other venues, Shaw said.
The problem, however, is that retail operations have to operate in a so-called commercial-village zone, while the farmhouse is located in a commercial zone.
Shaw believes county planners could be persuaded to modify the zoning to allow her to open a dispensary. She is seeking an investor to provide about $20,000 so she can put a hold on the house for a few months while she works on getting the zoning modified and waits to see whether she’ll receive a license.
“If the locals love what we do, and I think they do, then I think we have a good chance,” Shaw said.
If she can’t buy the property outright, she will seek a lease-to-buy option, Shaw said. Should Shaw land the farmhouse, she intends to set aside space for patient counseling and also sell accessories like T-shirts.
She’s also enamored with the new technology that’s been developed for the marijuana industry in recent years, such as sales tracking programs, THC testing and extraction equipment.
Shaw estimates that her startup costs for the new dispensary would range between $800,000 and $1 million dollars, including the $700,000 barn purchase, as well as product, computers, payment processing systems, and starting utility and labor costs.
That’s quite a difference from her first dispensary. Shaw needed less than $10,000 to get started that one started in 1996. Back then, she started by pooling together money from a small number of patients, buying the product herself and building a base of patients from there. Today, she’s hoping investors step up.
While Shaw hasn’t been allowed to work in the medical marijuana industry for four years, she said she has spent time watching other dispensaries. Among the lessons learned? Put good security cameras in areas where employees process and package cannabis.
“No matter how good your employees are, you’re going to lose stock,” Shaw said. “The honor system doesn’t work that well.
Omar Sacirbey can be reached at [email protected]