Longtime Marin County cannabis advocate looks back on legacy of California legalization

California cannabis tax revenue

Cannabis revenue for the third quarter as of Nov. 16 was $322.34 million. That includes these taxes:

Excise tax: $168.97 million

Cultivation tax: $42.41 million

Sales tax: $110.96 million

Second-quarter total tax revenue was $345.12 million.

Source: California Department of Tax and Fee Administration, Nov. 23

Lynnette Shaw, who founded Marin Alliance CBC, believed to be the state’s first medicinal marijuana dispensary, wiped away tears recalling Tax Day 1994, when dispensary patients linked arms around the San Francisco Cannabis Buyers Club to avert a law enforcement raid.

“Thousands of people went around the block to protect us. Their bodies were frail, with their little skinny arms,” she said with her voice cracking. “Some were grandmas.”

The paddy wagons pulled up, and the crowd yelled: “Boo,” Shaw said. Law enforcement personnel paused. “They never got out of the van. After a long time, the big black van pulled away,” she added.

Many of the people who confronted police that day in San Francisco were AIDS patients trying to secure their source of relief, a drug considered illegal. As far back as the early 1980s, these users, several lining hospital hallways, were enduring a fatal, debilitating disease — Acquired Immune Deficiency Syndrome — and pot helped fight painful symptoms.

The stakes were much higher than the federal government simply saying it doesn’t abide by a few dozen states providing open arms to cannabis. Those were the days when all levels of law enforcement — from city and county to state with the feds — cracked down on growers, distributors and even users who had access to dealers.

It was tough to be any type of advocate of a product back then referred to as solely marijuana, which was once considered a “gateway drug” to other substances such as heroin.

In the 1980s, the U.S. government told wannabe users to “Just Say No” at the urging of First Lady Nancy Reagan. Coordinated tactical teams of sheriff’s and U.S. Drug Enforcement Administration officers swooped into towns to undergo massive drug raids, making multiple arrests. Many lost homes, property, businesses and their freedom during these raids.

The threatened raid in San Francisco at the cannabis club in April about 27 years ago that placed Shaw, fellow activist Dennis Perone and other advocates on edge never happened.

Two years later, and 25 years ago this year, they got what they sought. Voters passed Prop. 215. The landmark measure paved the way for cannabis dispensaries, allowing some patients to buy substances derived from the controversial plant that the U.S. Drug Enforcement Agency officers spent years cracking down on.

Shaw, who was instrumental in the Yes on Proposition 215 campaign, vividly remembers the experience leading up to its passage and the subsequent growing pains and progress establishing cannabis’ role in society.

“(Prop) 215 changed the world,” she said.

The 67-year-old Fairfax woman started her journey 53 years ago selling marijuana as a teenager in Antioch, even though her father was an Internal Revenue Service agent and operated by the book.

Shaw said she was undeterred by her father’s overbearing nature and started smoking pot a few years later.

“I was a loner in school with a way-out IQ — just a weird kid with no social skills,” she said.

But her sales skills and “connections” led to a steady income in college at Diablo Valley in Pleasant Hill and UC Berkeley and beyond.

“I knew what sucked and what was great — and that it has to be fresh and cured properly,” she said.

Shaw described for the Business Journal decades of a whirlwind world in which she absorbed much of the brunt of those efforts by law enforcement officers bent on putting her behind bars.

“Back then, you could lose your house over one seed,” she said.

Despite going underground in places from Los Angeles to Garberville in Humboldt County — at the heart of the Emerald Triangle, her pot selling did manage to catch up to her.

“I lost everything when I was in jail,” she said of the 80-day stint in 1991 in a Contra Costa County Jail.

But about that time, she had met Perone — who organized pot clubs in the Castro district of San Francisco since he saw how it benefited AIDS patients, which included his partner.

While maneuvering around law enforcement’s radar, Shaw threw on her “power suit” through Perone’s urging and weaved in and out of the California Legislature to get the Compassionate Use Act on the books. She formed the Marin Alliance in 1990 and helped open a Proposition 215 campaign headquarters in both San Francisco in September 1995 and Fairfax in July 1996. She was licensed to operate legally about 11 months later.

“I knew we were going to win. They had weak arguments, and we had tremendous public support,” she said of the opposition.

Even after the win, federal law enforcement didn’t loosen its grip on Shaw, she said. To this day, the federal government classifies cannabis illegal. Interestingly, Shaw has discovered Democratic administrations favored pursuing her. Under U.S. Republican leadership, she has fared better selling the fed-illegal drug.

“Trump fired the prosecutor (who was coming) after me,” she said laughing.

The feds’ pursuit of her lasted decades. She endured a federal civil case lasting 19 years as the test case to stop the cannabis industry. She won in U.S. District Court in San Francisco the right to operate in 2016.

When asked why she believes law enforcement pursued her for so long, she hesitated, saying: “We had 100 years of prohibition. I knew the fight was not over in 1996.”

To this day, Shaw maintains a sharp wit, optimism and sense of humor — rubbing the belly of her dog, Rudy, and acknowledging the good work of her staff at the Marin Alliance CBC. (CBC stands for cannabis buyer’s club, a tip of the hat to her mentor, friend and inspirational muse, Perone, who died a few years ago.)

“I miss him every day,” she said, as a softened look came over her eyes and a staff member sauntered into her 6 School St. cannabis dispensary office.

“You know, if it wasn’t for Lynette, there would be no Proposition 215,” employee Debra Tsouprake said.

New guard and generation of cannabis

Indeed, Perfect Union dispensary chain CEO David Spradlin said he has opened 13 cannabis dispensaries from Sacramento to San Francisco and onto Napa with thoughts of how Shaw carved the path for him to follow.

“The whole progress made in Marin pushed us there. Unfortunately, she caught all the heat from the feds. That’s how it was for medical patients. It came from a place of love,” Spradlin said.

The quest to provide the ailing with cannabis products affected Spradlin’s own journey. When he was doing research for his cannabis operation and visited some underground, less-than-inviting dispensaries, he made a vow to make his stores as welcoming as possible to the weak and the frail among us.

“It was mind boggling how law enforcement dug in. People would be amazed by how much science goes into (cannabis medicinal) properties. We were worried that when adult use passed the medical science would go away. But it’s only magnified,” he said.

Still, Spradlin admits that states like California have come a long way from Shaw’s early days of offering cannabis products in hideaway clubs.

“We’re light years from where we were,” he said.

Spradlin opened his latest store in Napa in October. He plans to unveil another in Redding in December add one in San Francisco in January.

“We’re lucky to have come up in this space at this time,” he said, calling Shaw’s early years as “hard fought.”

It’s a long road

Lezli Engelking, as the CEO of a Phoenix company that provides cannabis regulatory services, believes even with medicinal cannabis’ approval in 1996 and recreational authorization in 2016 there are still issues when it comes to acceptance.

“We can’t seem to get beyond the stigma that’s still there,” she said, qualifying the ongoing battle as a “fear of THC,” the psychoactive compound of cannabis properties.

“The industry still has challenges,” said Jonathan Storper, a Hanson Bridgett law partner in Marin County.

“I think the regulatory industry is trying to do the right thing and create a better industry, but when adult use passed, I thought the taxes would go into education and enforcement,” Storper said.

California voters in 2016 passed Proposition 64, which legalized the drug for adult recreational use. The measure laid the groundwork for a licensing program released in January 2018 to identify legal growers, distributors, retailers and other subsets of cannabis businesses that form a complex network.

The biggest overall change in the cannabis world may come down to a name, as Storper points out.

“What we’ve been seeing is the professionalism of the industry. ‘Pot” and ‘marijuana’ are thought to be disparaging words now for the industry. It now uses ‘cannabis,’” he said. “To me, there’s a lot of opportunity. But the industry has growing pains. Maybe that’s to be expected.”

California cannabis tax revenue

Cannabis revenue for the third quarter as of Nov. 16 was $322.34 million. That includes these taxes:

Excise tax: $168.97 million

Cultivation tax: $42.41 million

Sales tax: $110.96 million

Second-quarter total tax revenue was $345.12 million.

Source: California Department of Tax and Fee Administration, Nov. 23

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