San Diego’s Medical Pot Industry Going Up in Smoke as Feds Force Dispensaries to Close

The worst-case scenario is playing out for the MMJ industry in San Diego, which has become a focal point of the federal government’s war on medical weed.

In the past two months, 139 San Diego medical pot dispensaries have officially shut their doors in response to stepped-up pressure from U.S. district attorneys in the state, according to federal officials. That represents a whopping 62 percent of the 222 marijuana centers operating in San Diego as of October, when federal official sent warning letters to dispensaries and their landlords threatening prosecution.

The actual number of closures is likely much higher, though. James Slatic – who runs Potbottles.com, which sells marijuana containers and other types of MMJ packaging – told MMJ Business Daily that he estimates 162 collective have closed, a number he arrived at by calling or checking out the websites of all 222 dispensaries that were open two months ago.

And more closures are certainly on the way. Authorities said they plan to shutter another 20 dispensaries by mid-December. The businesses still standing will be at risk too, as the government sent more warning letters out in recent days, according to the San Diego Union-Tribune.

The closures have put more than 1,000 dispensary employees out of work, and that’s not even counting the people who lost jobs at vendors and suppliers to the industry. Those job losses will most certainly have a ripple effect in San Diego, hurting businesses in other sectors as former MMJ workers curtail spending on everything from eating out to shopping.

Slatic said he recently supplied products to as many as 450 dispensaries but that the number is “dropping fast” as dispensaries close. He believes that lawmakers and public officials have it out for medical pot centers, even though the industry has played by the rules.

“They beg to be regulated, pay taxes, and provide jobs to people and medicine to desperate patients,” Slatic said. But the powers that be “don’t want this industry and will apparently spend much time and scarce budget dollars to get rid of it.”

The Obama administration has taken an uneven approach to medical marijuana in California and across the country, creating severe doubts about the future of the industry. The crackdown in San Diego is aimed at the entire MMJ sector, and the ultimate goal seems to be the eradication of all dispensaries within the city. That could realistically happen, given that a judge recently ruled landlords can break contracts with MMCs and boot them from their properties.

In other California cities, however, the government’s actions have been less intense, focused mainly on dispensaries that are breaking state laws and those that are located too close to schools and recreational centers. The government’s recent raids in Washington State and Montana also targeted dispensaries violating various laws – such as money laundering – but left alone those operating under state MMJ rules.

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