SF Cannabis Vet Tariq Alazraie Has Seen It All, Including Cops Standing By As His Shop Was Robbed

San Francisco first approved the use of cannabis in 1992. Over three decades the industry has evolved into a much different beast, and Tariq Alazraie, who opened his first SF dispensary in 2003, has witnessed much of that evolution.

Most recently  he joined the growing list of cannabis retailers victimized by brazen and often violent robberies.

Stunning footage obtained by the SF Chronicle last fall showed police officers standing and watching as thieves ransacked Alazraie’s Bay Area Safe Alternative (BASA) dispensary on Grove Street in the North of Panhandle neighborhood. (The shop was closed; no one was hurt.)

The security woes add to a long list of hurdles for this particular industry. It is still federally illegal, which means owners like Alazraie must either use costly small banks that are willing to absorb legal liability for a fee, or operate exclusively in paper currency.

With the added security costs, as well as high taxes and regulation from California’s Prop 64, which legalized cannabis for adult recreational use in the state, corporate players are increasingly the only ones that can afford to keep up.

We spoke to Alazraie (who declined to be photographed) about his “speakeasy” roots, the limitations of SF’s social equity policy, his forgiveness for the cops who failed to thwart the robbery, and the business outlook as the city emerges from the pandemic and the mayor pours resources into an economic recovery.

This interview has been edited and condensed.

The Frisc: What did you do before working in cannabis?

Tariq Alazraie: Originally I trained to be a fighter pilot in the Royal Jordanian Air Force. But when I moved to the U.S., I did not pursue flying. Instead, I went to business school at San Francisco State. Then I opened an internet cafe back in 1998, very famous back then, called Cafe.com. At some point we were the largest internet cafe in San Francisco.

How did you switch to cannabis? Did you have a business under Prop 215, which first legalized cannabis for medical use in the state?

It was actually because of the internet cafe that I was able to get into the Prop 215 medicinal market. It became a speakeasy, if you will. Underneath the cafe was a dispensary, from 2003 to 2010. I picked the location on Mason Street because it had a basement. This was very frowned upon back then, with the DEA and raids. So we operated in a way where nobody would know we were open outside of our patients.

Sounds like a different world than today. What are the biggest challenges facing SF dispensaries now?

More outlets than the market can bear. There used to be 37, before 2018, and by the end of 2022 there’s going to be around 100. Staying in business is going to be hard, because the pie will be divided.

There’s also no banking, which makes everything an extra cost. To accept credit cards, most retail businesses would pay about 2 percent of sales. But in cannabis, we have to pay almost 10 percent, and we can’t do without it, because nobody carries cash. Doing business in SF is expensive, and in cannabis even more expensive.

It’s all fine with me now. People make mistakes.

Tariq Alazraie, on how police officers stood and watched when BASA was robbed last fall.

Let’s talk about taxes. Gov. Gavin Newsom got people excited in January when he said he’d look at cannabis tax reform to “stabilize the market.” What changes are you hoping for?

Many industry leaders and business operators signed a letter asking the governor to do away with the cultivation tax. I also hope they will reconsider the excise tax.

Currently, you can buy a pound of cannabis for $300, and the total tax on this will be $161 or $162 — more than half. It becomes so costly it’s no longer worth it.

It’s taxed at all levels — local, county, and state — at beginning and end. We’re talking growers paying taxes on one end, as well as consumers and retailers on the other.

What about the local SF tax?

The city gave us this year as a holiday from local taxes, and 2023 is when it’s going to restart. It’s going to be substantial — a gross receipt tax.

Humboldt County, in recognition of the plight of cannabis farmers, has reduced its taxes by 85 percent. I really hope the San Francisco government also understands. A lot of businesses closed, and that’s without the gross receipt tax this year. The industry is at risk of collapsing.

Prop 64 also allows local governments to nix the sale or cultivation of cannabis in their areas, with at least 300 out of California’s 482 cities doing just that. State Sen. Scott Wiener is trying to reverse this and allow deliveries for medical patients, at the least. Would anything change for SF dispensaries, which already can deliver cannabis?

It doesn’t make a big difference for us, since we can already deliver in the North Bay, South Bay, and East Bay. But the majority of California counties currently ban cannabis, so it’s a big deal for them.

I will say that Senator Wiener is one of the most active people on behalf of cannabis. I’m excited about a bill he just introduced, SB 1336, which would introduce considerable excise tax credits for our business.

It seems like most SF policy is focused on making the industry more equitable, especially for victims of the War on Drugs. Is that what you’re seeing?

There should have been a cap on businesses for the purposes of social equity. It would be a lot more equitable if they limited it to one license per person, because then you could have distributed licenses to a lot more people. Right now the market is becoming not just oversaturated, but over-concentrated by a few big retailers. You see one company own four stores, like Stiiizy, for example.

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The BASA robbery last fall prompted an investigation of the police officers’ conduct. How do you feel about that today?

With regard to the way the police department dealt with it, it’s all fine with me now. People make mistakes. And honestly, back then, the police had a lot of pressure on them. If you did the wrong thing, you’d be prosecuted.

I think it was more a sociology issue than a thing the city had control over. When an opportunity arises, things happen. Things have become a lot better these past few months. There’s a lot less “someone’s breaking into your car while you’re driving it” kind of incidents in the news. A lot of the robbers got arrested, and hopefully we can arrest more, because I think it’s a deterrent.

What do you think about the provision 10A program that allows businesses to hire sheriff’s deputies and police at 150 percent of their normal pay. Sup. Ahsha Safaí says it would help prevent retail robberies.

The intention, obviously, is good. The police are [already] being used, why not also the sheriff’s deputies?

But you see, only large retail stores can afford this. For small businesses, it’s very challenging. Those officers will be at least $60 to $70 an hour, probably more, and that’s prohibitive to small businesses.

[When] we pay a gross receipts tax, that’s expected to be compensation for the city services. But 10A is offering something we can pay for in addition.

I also hope that 10A does not get used politically. If two businesses apply for permits, and one has a lot of money and the other doesn’t, this can become a problem. If you put on your application you’re going to hire all this extra security and stuff, that would get you through the permit process much faster.

I’m impressed with how calm you sound about the robberies. I don’t know if I would have the same composure.

If you wore my shoes, you would feel the same way. I’ve been wearing these shoes quite a bit, operating in this kind of tough environment. Experience has quite a lot to do with it. And a lot of luck to survive to talk about it.