The mood was somber Monday at Berkeley Patients Group as the 12-and-a-half-year old cannabis dispensary got ready to shut its doors.
Like every day, patients streamed in at a steady rate, handing over a doctor’s prescription and driver’s license to get inside. But many of them were also greeted with a hug and expression of gratitude.
“I want to thank you ladies for coming on our last day,” Joshua, a supervisor in the safety department who was working the security detail at the front door said to two patients. He asked that his last name not be used. “You will always be in our hearts and minds.”
Berkeley Patients Group is closing because the federal government informed its landlord, David Mayeri, in November that it might seize his assets if cannabis operations were not stopped. The letter from U.S. Attorney Melinda Haag was part of a broad-based crackdown on cannabis operations around California, a push that has resulted in the closure of dozens of medical marijuana dispensaries. Berkeley Patients Group, which has 13,000 members, is the largest and oldest dispensary to be affected, however.
Berkeley Patients Group agreed in a legal settlement with Mayeri to stop all sales of cannabis by May 1. The collective will clean up and vacate the premises by June 1, according to Brad Senesac, a spokesman for the group.
Berkeley Patients Group is not going out of the medical cannabis business, however. It is planning to launch a delivery service while it looks for a new location.
A huge banner announcing the service hung Monday in the back of the reception area, right behind the desk where all patients check in. “BPG Express. Coming Soon!” read the sign. “Sign up now to be among the first to receive our Exclusive Delivery Deals and Specials.” The delivery service will launch in late May, said Senesac.
The collective is still looking for a new location and has a number of promising prospects, said Senesac, who acknowledged it has not been easy to find a new space.
“We’re looking to move a 13-year old business,” he said. “We’ve been looking to move for five years. For us to expedite the move within the parameters set by the federal government, the state and local laws, we want to make sure we have the right location.”
BPG’s current 69 employees will be paid through the end of May,” said Senesac. If no new location has been found by then, BPG plans to bring in employment counselors to help the workers brush up their resumes and strategize on finding new jobs.
“If it’s going to be impossible to move, we’ll have an additional 69 unemployed folks in the city of Berkeley,” said Senesac.
Many employees and patients expressed sadness Monday that BPG was closing. They bemoaned the fact that it will be more difficult to get good quality medical cannabis in a safe and clean setting.
“This is tragic,” said Joshua, who has worked at BPG for three and a half years. “It’s really heartbreaking. The thing that hurts most is the ‘Helping Hands’ patients who can’t afford to pay for medicine. We give it to them for free. A lot of them have serious illnesses and it is really heart-wrenching to think they might not get their medicine.”
Mary Elizabeth Davis, a nurse who uses medical cannabis to alleviate the pain from severe osteoarthritis in her knees, said she will miss the feeling of camaraderie at BPG.
“This is my family,” said Davis, who has been a nurse for 42 years. “There are probably 100 people inside there,” she said, pointing to the lounge of BPG. “We said it feels like Thanksgiving. We are all so thankful. We are going to miss the whole community.”
Another patient asked Joshua what he should do to try and get the federal government to back off its pursuit of cannabis dispensaries.
“What do we need to do?” asked the man, who did not give his name. “Who do we write to? Who do we call? Who do we email? We’ve got to do something. This is my second home.”
The closure of BPG is the latest blow to an organization that just three years ago was doing so well it planned to export its brand across the country. Executives at BPG helped pass Berkeley’s Measure JJ in 2008, an ordinance that streamlined and clarified the city’s medical cannabis regulations. As states around the country started to adopt looser medical cannabis laws, BPG positioned itself as a consultant. In 2009 it sent a top executive, Rebecca DeKeuster, to Maine to lay the groundwork for a series of new dispensaries.
But soon BPG and DeKeuster were in court, with BPG alleging that DeKeuster had breached her contract and stolen trade secrets. BPG sued to recover $632,195 it lent her to open new locations.
Also in 2011, the state Board of Equalization slapped BPG with a bill of $6.4 million for back taxes and fines. BPG has worked out a payment plan with the state, but it is unclear how those payments will continue if BPG no longer has income.
In November 2011, the co-founder and former president of BPG, Debby Goldsberry, filed a wrongful termination suit against the collective, alleging that its current leaders had inappropriately taken money from BPG to invest in the Maine endeavor, among other serious allegations. The lawsuit has since been settled, according to California Watch, which first reported the suit.
Local officials in Berkeley have been supportive of BPG, in part because it generates about $100,000 a year in taxes and donates as much as $200,000 annually to local charities. Critics of cannabis dispensaries, however, often contend that they are set up just to generate huge profits for their founders and that many of the patients are not sick but just use doctor’s prescriptions to get easy access to pot.
While BPG generates millions of dollars in sales each year, (California Watch reports that it brings in $19 million annually) most of that money goes to pay employees and is not used to line the pockets of the owners, Senesac said Monday.
While BPG is a corporation, it is a not-for-profit like Kaiser, he said. A salary survey conducted by a consultant hired by BPG determined that the executive salaries were in the mid-range of other executive salaries in the medical field in Alameda County, he said. (While Senesac did not reveal the results of that survey, legal documents filed against DeKeuster revealed she was paid $125,000 a year.) Senesac, who moved from Atlanta to Berkeley three years ago to work for BPG, added that he lives in an apartment, does not own a car, and rides his bike to work.
With all the uncertainty, all that BPG staff could do on Monday was convey to the dispensary’s clientele that things might turn around.
“We’re trying to let them know that although we are powerless here we still love them,” said Joshua. “I try to remind them that although we are closing, this is not the end. Hopefully we will find a new location and be up and running and serving medicine.”
Berkeley Patient Group says it is moving, not closing [03.16.12]
Berkeley’s largest cannabis dispensary to close May 1 [03.15.12]
Federal letter may make Berkeley Patients Group relocate [03.14.12]
Berkeley orders two cannabis collectives to shut down [02.22.12]
Councilmember: Look at unauthorized cannabis collectives [12.06.11]
Rapid growth of cannabis collective raises concerns [9.20.11]
Concerns raised about new medical cannabis collective [10.27.11]
Commission ponders growth of unlicensed pot clubs [11.4.11]
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