Discuss as:

Two more medical marijuana clubs fold in federal crackdown

Medical marijuana dispensaries in San Francisco, Calif., say they are closing their doors amid mounting pressure from the justice department. KNTV's Joe Rosato Jr. reports.

A pair of San Francisco prominent medical marijuana businesses closed their doors Tuesday, a sign of the federal government’s recent crackdown on medical cannabis dispensaries.

HopeNet and the Vapor Room announced they would cease operations in response to threatening letters sent to the business’ landlords by the federal government.

“The Justice Department sent our landlord one of those nasty letters,” said HopeNet co-founder Catherine Smith. “So this is our D-Day, we have to leave.”


See the original report  |  More from NBCBayArea.com

Smith and her husband founded HopeNet in 1998 on Ninth Street in the city’s South of Market. The business was held out by medical marijuana advocates as an example of a legitimate pot club working within the city laws. Smith worked alongside city legislators, served on San Francisco’s Medical Marijuana Task Force and helped craft the city’s landmark marijuana ordinance.

“Hard to believe we did all these things and accomplished all these things in the City and they’re shutting us down,” Smith said.

Since November, the Justice Department has sent out 600 letters across California threatening landlords who rent space to medical marijuana operations. Since November, nine San Francisco pot clubs have shut their doors.

Stay informed with the latest headlines; sign up for our newsletter

The closures haven’t just affected marijuana clubs but also ancillary businesses. Ray Chico whose company Doob Tubes sells plastic containers for medical marijuana, said the litany of closures has hurt business.

“We have an employee that we had to let go, or at least lay off two weeks ago,” Chico said, “since the Harborside forfeiture letter and Vapor Room.”

The sprawling Harborside medical marijuana complex in East Oakland is vowing to fight federal efforts to shut it down. Chico said he was saddened to see HopeNet close-up shop.

“They are like a cornerstone to the little community here,” Chico said. “I think they’ve worked very diligently with local authorities and do everything you need to do to run it above board.”

Smith said the business would continue to run its delivery service, but wasn’t optimistic at finding another location for its dispensary and on-site smoking room.

“The word is out about the Justice Department sending the landlord letters,” said Smith. “The real estate people don’t want to deal with you anymore.”

Watch the most-viewed videos on NBCNews.com

Longtime patient Ramon Flores said HopeNet represented more than just a pot club.

“A lot of people that come here are mental health patients, or they have physical afflictions,” Flores said as he sat in the club clutching a guitar. “They come here for the marijuana which is also medicine, but they also come here for socialization.”

Since last fall, the Justice Department has cranked up its campaign on California’s medicinal marijuana industry. The governments views the glut of medical pot businesses in violation of California’s voter-passed 1996 law.

The movement was dealt another blow last week when the Los Angeles’ City Council voted to tentatively ban the city’s 762 marijuana clubs.

With the medical marijuana movement facing a seemingly unfriendly tide, Smith looked around her club, watching as customers hugged each other and said their goodbyes.

“I don’t have much hope right now,” she said.

More content from NBCNews.com:

Follow US News from NBCNews.com on Twitter and Facebook