Berkeley Patients Group on San Pablo Avenue: may be forced to move. Photos: Frances Dinkelspiel

The owner of the building that houses the Berkeley Patients Group has put it up for sale, further fueling whispers that the federal government sent a letter ordering the cannabis dispensary to shut down.

Gordon Commerical Real Estate is listing the property at 2747 San Pablo Avenue, which is owned by David Mayeri, as a development site for $2.55 million. The 17,500 square foot structure, built in 1953, is an old car dealership, and has a distinctive rounded front room with curved windows that once displayed automobiles. The property has permits in place for a five-story mixed-use building.

The East Bay Express reported in February that the head of NORML, a marijuana advocacy group, said that BPG had gotten a letter from the federal government telling it to shut down. Officials from Berkeley Patients Group have declined to confirm or deny the reports that Mayeri received a letter from U.S. Attorney Melissa Haag. But well-informed sources who asked not to be named tell Berkeleyside that Mayeri got a notice in late November.Mayeri declined to comment.

Haag and other U.S. Attorneys in northern California have sent out a number of letters to property owners who rent to cannabis companies, giving them 45 days to stop the sale and distribution of cannabis on their property or face steep fines, criminal prosecution, or forfeiture of their property. Many of the letters have gone to dispensaries that operate within 1,000 feet of a school or playground.

A excerpt from a letter sent to a San Francisco property owner. Image: KQED

Berkeley Patients Group sits 907 feet from Ecole Bilingue on Heinz Avenue.

If BPG, Berkeley’s largest cannabis dispensary shuts down, the closure will have significant implications. BPG currently employees 75 people and serves thousands of cannabis patients each month.

Finding another site in Berkeley may not be easy. BPG has been trying to find a larger spot for years, and made an unsuccessful bid to move into the old Scharffen Berger building on Heinz in 2010. The plans were scuttled after Wareham Development bought the building, preempting the move.

“In this climate, it is going to be hard to get a landlord to rent to you,” said Charley Pappas, whose San Francisco Divinity Tree dispensary closed late last year after receiving a federal letter. He is a member of Berkeley’s Medical Cannabis Commission and would like to open a dispensary in Berkeley. “If I were a landlord I would think twice about renting to a dispensary.”

Berkeley Patients Group: employs around 75 and serves several thousand customers

It is unclear if Berkeley Patients Group would have to apply for a new dispensary permit if it moves from its current location. Zach Cowan, the Berkeley city attorney, said he could not comment on whether BPG would have to apply for a new permit because he does not know under what circumstances it would have closed.

“I would want to look very closely at what the federal government said before I say anything about it,” said Cowan.

Currently, there is no established permitting process for new dispensaries. Measure T, which Berkeley voters adopted in November 2010, expanded the number of possible permitted dispensaries from three to four, established the Medical Cannabis Commission and gave it the responsibility to draft a permitting process. The City Council would have final say on any new regulations.

But the Medical Cannabis Commission just started to meet in September and is still working on new rules. They most likely will not be finished until the summer, said Pappas.

The federal letter is just the latest in a series of challenges confronting Berkeley Patients Group. The state of California informed the organization in February 2011 that it owes $6.4 million in unpaid sales taxes and interest. BPG is currently working out a payment plan with the Board of Equalization.

BPG is suing former executive Rebecca DeKeuster for breach of contract and non-payment of more than $600,000 in loans. BPG sent DeKuester to Maine to help open some dispensaries there but she abandoned her partnership with BPG and formed a new business alliance. BPG accused her in July 2011 of stealing trade secrets. DeKeuster’s new business, the Northeast Patients Group, filed a countersuit against BPG.

Berkeley orders two cannabis collectives to shut down [02.22.12]
Councilmember: Look at unauthorized cannabis collectives [12.06.11]
Commission ponders growth of unlicensed pot clubs [11.4.11]
Concerns raised about new medical cannabis collective [10.27.11]
Rapid growth of cannabis collective raises concerns [9.29.11]
Berkeley cannabis lawsuit reveals bitter infighting [07.18.11]
Pot club move halted [04.2910]
Pot au chocolat: The Scharffen Berger decision [02.08.10]

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Frances Dinkelspiel, Berkeleyside and CItyside co-founder, is a journalist and author. Her first book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman Created California, published in November...