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Shady On Ocean: The City's Diciest Pot Club Operator Is Back 

Wednesday, May 14 2014
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It's not easy to get a license to sell weed in this town. It takes a lot of time, even more money, and a big dab of luck. The wrong neighbors or the wrong city bureaucrat on the wrong day can sink even the best-laid pot-club plans.

But once you have the marijuana dispensary permit in hand? You're gold. Untouchable, apparently. You can even nearly burn down your dispensary with a fire from an illegal indoor grow — caused by stolen power from a jumped PG&E box — plus have cops seize a firearm (also illegal), and be in the clear.

This is the lesson of Ocean Avenue.

The mostly quiet, often-foggy collection of low-slung restaurants, produce markets, nail salons, and more than a couple vacant storefronts — bookended by City College and SF State — sees business mostly from students and neighborhood locals. But there are two draws that bring outsiders. Both are cannabis clubs, the closest places to buy weed for anyone living in the southwestern corner of the city.

The club at 1545 Ocean has a history. For a little more than three years, the building — owned by the Jews, as in disgraced former supervisor and current jailbird Ed Jew — has housed Waterfall Wellness Center. That club has a decent reputation. Better than it did under its old name, NorCal Herbal Relief Center.

The Yelps from the NorCal days talk about a "thuggish" place with spotty weed behind thick bars. It got worse on Dec. 26, 2010, when an overtaxed power system for an indoor grow set up in an upstairs office set a couch on fire. The blaze caused about $750,000 of damage, according to the Fire Department report — and sparked an SFPD investigation. (Nothing seems to have come of it; a police spokesman last week couldn't say why.)

It also changed the guard at the club. The man in charge before the fire, Daniel Mendez, took his name off the permit. In his place stepped Greg Schoepp, who in 2010 tried and failed to open up a dispensary on Taraval Street in the Sunset.

The burned building got a major physical facelift — away went the bars — and NorCal was rebranded Waterfall Wellness.

This is where it gets messy.

According to some people in the room, the Department of Public Health — which regulates pot clubs and hasn't seen fit to revoke a permit over the last five years, and possibly not ever — told the dispensary in January 2011 that Mendez had to go or the permit would be revoked. Verifying that is hard. The DPH officials in that meeting have all moved on, and the only record is a tape, which hasn't yet been located.

Nonetheless, away Mendez went... for a while. Corporate records on file with the California Secretary of State show that Mendez was named "director" and "CFO" of Waterfall Wellness in April 2012, a little over a year into the pot store's new era without him.

And when Waterfall signed a new lease with the Jews late last year, agreeing to rent the storefront for an eye-popping $12,600 a month for five years, it was Mendez who signed the paperwork.

Mendez sure seems back. Meanwhile, Schoepp is out. Exactly what happened depends on whom you ask. Schoepp says that Mendez, who was kept on as a "consultant" and grower, wanted back in after Waterfall proved successful. Schoepp got pushed out after Mendez and his people muscled back in.

Mendez's people say that Schoepp engaged in shady business dealings including withholding sick days, and that on his last day, this past January, he pulled $31,000 from the dispensary's safe. That allegation is in a suit filed earlier this year in San Francisco Superior Court.

There was a schism in the works before the suit. In April 2013, a year after Mendez's official return, Schoepp filed paperwork to go his own way and open up his own dispensary at 1423 Ocean. It took 13 months for the application to be heard by the Planning Commission.

On May 1, the commission delayed approving the new club, because this Wednesday, May 14, health officials are deciding on a change of ownership application for Waterfall. Mendez's name isn't on the permit. It's Tiara Mitchell — Mendez's daughter-in-law.

One last wrinkle: If Waterfall's permit under Mitchell and Mendez is approved, Schoepp's permit for 1423 Ocean will almost certainly fail under new rules forbidding "clustering" of pot clubs on Ocean. The folks who lined up to oppose Schoepp's permit — including Mitchell and Mendez — were almost exclusively associated with Waterfall.

The above is complicated and byzantine. That's the weed business for you. But what's clear is that for some reason, a guy who broke the law, stole power, and nearly burned down his business is back.

About The Author

Chris Roberts

Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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