Thursday, April 29, 2010

Million-Dollar Oakland Cannabis Dispensary Spat at Climax

By David Downs
Thu, Apr 29, 2010 at 12:42 PM

Hundreds of Oaklanders who frequent one of the city's four permitted dispensaries may have to go elsewhere this week, as city officials force the closure of the Oakland Patient Center due to a spat over who owns the valuable enterprise.

Oakland official Arturo Sanchez said the city's four medicinal marijuana dispensary permits cannot be bought or sold, but that is what original Oakland Patient Center owners Steven and Stacey Petras did when they turned over operations of the struggling business to veteran dispensary operator Dona Frank in late 2009. When the city learned of the deal, they revoked the permit for the Oakland Patient Center in January, 2010. The Center at 705 Broadway continued to operate, so the city recently threatened the landlord of the facility with $1,000-a-day fines starting this week. Sanchez says he expects the landlord to issue a three-day eviction notice this week, effectively closing the Oakland Patient Center after months of bitter dispute.

Attorneys for current operator Dona Frank say they'll fight the eviction, and have also responded by suing the city to get their permit reinstated. They're also suing former owners Steven and Stacey Petras to gain full control of the disputed dispensary. For their part, the Petrases say they are the victims: a family with serious health problems that forced them to sell a minority share of their dispensary to one person, then another. The new partners were wolves in sheep's clothing, the Petrases allege, and the Petrases were literally locked out of their own club.

The allegations between the aggrieved parties are too complicated to untangle here, but it essentially comes down to money. Frank's attorney Gygax says the rare permit to operate a dispensary in Oakland made the business worth around $1.7 million. Dispensaries likley will be worth many more multiples of that number if cannabis becomes a legal, commercially taxed and regulated product this November. As permit-holders, the ailing Petrases planned on getting paid $60,000 a month while someone else operated their business. How much they got paid became a subject of massive dispute that ended up in the courts and cost them their livelihood.

Dona Frank's lawsuit to restore the permit will continue into the summer, while her lawsuit against the Petrases could be resolved much sooner. Stacey Petras is very ill, the family cannot afford an attorney, and Gygax said they've failed to appear at two recent Contra Costa County Superior Court dates on the matter.

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