The story of one SF Mission dispensary and how it beat the Feds

Khader “Al” Shawa Photo by Lola M. Chavez

Update (1/8/18): On Monday afternoon, Shambhala received its state license to sell recreational cannabis to adults. 

Six San Francisco dispensaries open their doors today for adults looking to imbibe on nugs, fatties, dabs, brownies — you name it — free of federal wrist-slapping. 

The city gave seven dispensaries permission to seek a state license and begin adult recreational sales today. Two Mission District dispensaries, Medithrive and Shambhala, received city approval.

While Medithrive has obtained its state license and will begin selling today, Shambhala still waits. Shambhala’s owner, Khader “Al” Shawa, told Mission Local Saturday that the state has requested one last form from him before he can open the store to all adults.

This is especially disappointing to Shawa, as he is in the home stretch of a long journey that involved a tense conflict with the Feds. Still, he expects to open for recreational use very soon.

“I was taking a shower and thinking back, and my tears came,” he said. “It’s really wonderful to see — to go back to the journey where I started and where we are today.”

Shawa’s story is, in many ways, a Mission District story — an immigrant’s tale of resilience and hard work. Born and raised in Gaza City, Palestine, he landed in the Mission in March 1981.

“The first place I ate was Pete’s BBQ,” he said.

His first job was selling clothes on Mission Street, and he quickly learned that he had a knack for sales. By 2001, he had built 20/20 Fashion into a Bay Area-wide brand with nine locations.  

Then the global economic apocalypse of 2008 struck and, one by one, Shawa’s stores failed. He was forced to move his remaining inventory into a space at 2441 Mission St., where he remains today.

After a short time running a clothing store out of the space, Shawa discovered that the building was eligible to house a medical cannabis dispensary.

“In the beginning, I’m not going to lie, it was greed, it was the money,” he said when asked why he decided to get into the weed business.

Shawa had tried marijuana only once when he was very young. “I had never seen a marijuana plant in my life until I got into the business,” he said. But “I smoked it, and I’m really sorry I didn’t smoke it when I was much younger.”   

He obtained his permit in 2010, and opened Shambhala in 2011.

The next year, however, Shawa — as well as three other Mission District dispensaries — received cease-and-desist notices from Melinda Haag, then the U.S. Attorney for the Northern District of California. The letters were part of a sweeping federal crackdown on Bay Area medical pot clubs, and they were given 45 days to close.

By June, he had indeed closed.

In November of that year, as Washington and Colorado legalized cannabis within their borders and pot-friendly Barack Obama settled into his second term, Shawa decided his time had come.

“I called my lawyer and said, ‘I’m opening my doors,” he said. “I called the landlord, and the landlord said ‘I trust you — you haven’t done me wrong.’ And I opened.”

It took only six months for the feds to send a forfeiture notice to Shawa and his landlord. They threatened to seize the building if Shambhala remained open.

“I had a chance to walk, or to fight,” Shawa said.

He fought, and so began two years of “litigation and money-bleeding and fear.” Shawa hired star cannabis attorney Henry Wycowski and sued the federal government. They argued that the feds could not override a legally obtained lease.

During the battle, however, business suffered. Shambhala’s patients were wary of spending money at a store so watched by the federal government.

Shawa also worried constantly about being raided, and whether he and his employees — or even his family — would be sent to jail.

“It was a horrible horrible two and half years,” Shawa continued. “I think I’m still traumatized about that time — me and my family.”

On Dec. 8, 2014, a judge ruled in Shawa’s favor, tossing out the feds’ attempt to seize the building. With the ruling, Shawa became the first San Francisco dispensary owner to take on the federal government and prevail. “I won,” he said multiple times during our interview.

Now, anticipating the torrent of eager stoners to flow through his doors, Shawa is adding nine new employees and ramping up his supply “more than the normal,” he said.  

What’s more, he’s planning a nearly $400,000 renovation to the store’s interior, with plans to add an upstairs lounge for consumption, complete with a coffee bar, ping pong tables, arcade games and even a space for live entertainment.

He will rename the store Mission Cannabis Club when the renovations are complete — hopefully by April 20 or, as many know it, 4/20.

Still, for Shawa, all the recent ups and downs remain bittersweet.

“I feel bad for a lot of patients because they’re going to lose their privileges, their access like it used to be,” he said. “It was their own private club and they’d take their time.”

“But with legalization, it’s going to be challenging, because it’s going be busy and … they’re going to be paying 15 percent more than they usually do,” he added, referring to the state’s tax on cannabis products.

But Shawa said there will be a place in the store dedicated solely to patients. It will be called Shambhala.

Five years ago, he never thought he would be expanding his business. “This is exactly where we wanted to be,” he said. “Hopefully it continues like that.”

It may not. This week, U.S. Attorney General Jeff Sessions announced that he would rescind an Obama-era directive that largely cleared the way for states to legalize and foster a marijuana industry.

Shawa is unafraid.  Sessions’s announcement, he said, is “not going to change anything.”

Photo by Lola M. Chavez.

Photo by Lola M. Chavez.




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