One of San Francisco’s 16 permitted cannabis delivery services has decided to shut down next month, the San Francisco Examiner has learned.
The Green Cross, founded by Kevin Reed, a long-time medical marijuana advocate who uses cannabis to manage chronic back pain, initially opened its doors in San Francisco in 2004 as a storefront in Noe Valley. But after being forced to close its doors amid complaints from residents, Reed morphed the business into a delivery service in 2006.
In 2013, The Green Cross “finally” re-opened as a storefront at 4218 Mission St. in the Excelsior District. The storefront will remain open, but the delivery service will end.
Reed has notified the San Francisco Health Department that his delivery service will close Dec. 16.
“Due to the proliferation of unlicensed delivery services, IRS 280E rules, and the overwhelming amount of competition in a for-profit industry, we have decided it is best for us to be the first delivery business to close down after the passing of Prop. 64,” Reed wrote in an email to to the Health Department, which he provided to the Examiner on Wednesday.
“It has been a pleasure operating a delivery service in San Francisco for the past 10 years, and we are still extremely proud to be The City’s first permitted medical cannabis dispensary (permit #0001).”
Reed continued, “We do, however, look forward to serving the citizens of San Francisco through our Outer Mission storefront location for many years to come.”
On Tuesday, the Board of Supervisors approved recreational cannabis regulations that will allow existing permitted medical dispensaries and delivery services to begin selling retail cannabis as early as Jan. 5 if they meet certain requirements.
Those requirements include obtaining a temporary 120-day state license and, if they have 10 or more workers, ensuring that 30 percent of hours worked are by employees who were impacted by the war on drugs, as defined an equity program that was also approved Tuesday.
With the passage of Proposition 64 last year, recreational cannabis becomes legal in California on Jan 1.
In a text message to the Examiner, Reed expanded on his reasons for shutting the delivery service.
“Delivery has never been a profitable model,” he wrote. “It was truly a means of survival for us after the closing of our original location and ultimately a free service we provided after we opened the storefront in the Outer Mission. With all the overhead coming at us under these new regulations there’s absolutely no way our organization can sustain these costs.”
He added, “For more perspective, delivery was down 45 percent in sales this year!”