Eighteen years ago, Sultan “Sam” Alkhraisat was at the top of his game. He was in the business of buying and selling cafes in the city. He did so well that at one point he owned 15 restaurants and cafes. He was able to support his close and extended family, all from Jordan.
“We did good,” he said. “I provided for me, my wife—everyone.”
So when his business partner suggested investing in a cannabis dispensary in the Mission District, he jumped at the opportunity.
He took out loans and equity from a house he had purchased for his retirement and then successfully made it through a maze of regulations and permitting. Business was booming.
For five years Alkhraisat ran the dispensary, Valencia Caregivers, from the back of his Ceasar’s Café on 208 Valencia Street. It did well. Even as the federal government started cracking down on dispensaries and forced some of his competitors out of business, Alkhraisat and his business partner thrived.
In fact, business was so good, that Alkhraisat decided to purchase the six-unit building that housed his cafe and dispensary for $1.8 million. He agreed to cover $300,000 in cash in three years and in early 2011, he put down $50,000, he said.
But his timing was “bad,” he said. Just as he had agreed to buy the building the federal government had begun cracking down on medical marijuana dispensaries.
Federal laws prohibit cannabis dispensaries from opening within 1,000 feet of a school or recreational youth center. When the Friends School moved into the area in 2008, U.S. Attorney Melinda Haag began targeting the dispensaries nearby that did not comply with federal law.
John Oei, the building owner, received letters from the federal government advising him to comply with federal law, which meant the dispensary had to go, according to court documents.
But Alkhraisat and Oei thought they could fight the impending eviction, Alkhraisat said. They hired lawyers and thought their chances of winning in court were good: Their lease clearly stated the intended use and they had done everything by the book.
Once they had won that battle, they thought, Alkhraisat could acquire the building without issue and continue to run both the profitable cannabis club and the cafe.
The plan had been engineered and the legal proceedings would soon begin.
“It was going to be a game to please the federal government for having a CD [cannabis dispensary],” Alkhraisat said.
However, on May 6, 2012, a four-alarm fire struck the building next door that changed everything. It severely damaged the 208 Valencia building.
The day after the fire, Alkhraisat received a three-day notice of eviction from Oei, according to court documents. He fought it: he still had 12 years remaining on his 20-year lease.
Oei told Alkhraisat that the damage was too expensive to fix, Alkhraisat said. Tenants in the six units had to relocate.
Oei refused to comment for this article.
Alkhraisat received a $40,000 insurance settlement for his business losses, he said. But, he added, it wasn’t enough to cover his costs or debts.
“My insurance was bad,” he said. “I had a total of $40,000 for everything. I got it in different payments.” By the time he got the money, he was “already behind,” he said.
Without a profitable business he could no longer afford to purchase the building.
Oei told him he would not refund Alkhraisat’s $50,000 and his investment would be lost, Alkhraisat said.
But there was still the question of the lease and the eviction.
Oei tried to settle the eviction case in court for $25,000, Alkhraisat said. But Alkhraisat turned down the settlement offer because it was too low, he said.
Alkhraisat felt confident he would win more money in court. But then he lost the case due to a scheduling snafu, he said.
Alkhraisat’s lawyer at the time, Steven Schectman, failed to provide him the correct appearance date, according to court documents. Schectman misunderstood when the trial would be continued, court documents state. Because of the misunderstanding, Alkhraisat failed to show up to court on the hearing date and lost the case by default, according to court documents.
“I’m in a really tough situation,” Alkhraisat said.
Tariq Alazraie, Alkhraisat’s business partner, who was also on the lease, is trying a new avenue. Alazraie plans to appeal the court’s ruling against Alkhraisat.
Joseph Elford, Alazraie’s lawyer, hopes to win the eviction case and have Alazraie either return to the renovated space with a restored lease or to receive a compensation, Elford said.
As for Alkhraisat, with no stable income and no business in sight he has taken to drive for Lyft.
“I want my business back, and I don’t know how to get it back,” he said. “Everything was there for me and now there is nothing.”
Justice for Sultan the cannabis dispenser!