from nbc buy area, this is "today in the bay." good morning. it's 7:00 on saturday. look at this beautiful, live shot of the golden gate bridge ahead of the beautiful saturday we have ahead of us. a very different story for tomorrow. good morning. thanks for joining us. i'm kira klapper. anthony slaughter has a look at that microclimate forecast where we'll be seeing one day today in a very different day tomorrow. >> completely different story tomorrow. waking up with fog this morning.

we are clear in some parts but this is san bruno, covered in fog. and that's the same deal for most of the coastline. if you keep that in mind, some of us are clear. south bay, you can see we are waking up to sunshine. yes, clear for some, foggy for others. but with temperatures this warm over the past week, we have a lot of that pollen that's starting to bloom. one of the dogwoods that i took a snapshot of this week. yes, going to continue to be in full bloom over the next few days. cooler days on tap. in fact, starting tomorrow and more cloud cover start to inundate the bay area because a slight chance of shower activity is possible tomorrow across some of our foothills. we'll talk more in detail coming up. see sky cameras, 40s and 50s. later on, temperatures going to cop out in the 70s. 69 in san francisco, 71 for the north bay. 71 south bay. nice day wherever you go. rain in the forecast tomorrow. we'll talk more about that. >> i like that, a little bit of

this a little bit of that. >> and matches the calendar. >> matches the calendar, finally. we begin this morning with a developing story in the east bay, port of oakland is back in business. business is across the bay area are celebrating now that that costly shutdown appears to be over. a source of a lot of hurt for businesses and now after nine months of negotiation, a tentative five-year contract has been reached to cover west coast dock workers. the dispute disrupted international trade at seaports that handle $1 trillion of cargo a year. president obama sent u.s. secretary of labor thomas perez here to california to encourage the two sides to resolve their differences. perez made the announcement over the phone. >> the agreement is fair for both workers and the businesses operating at the ports and brings to an end what has become a significant headwind for american economy poised for continued strong and steady

growth. >> port of oakland officials say it will take up to two months for the port to get back to normal. trucks will be moving containers in and out of the port and ships that have been hanging out at sea can finally come in. the labor dispute costs businesses millions. a message on social media hass hass hassan ma taye copolice stepping up. two recent gang related shooting in the north part of the city. police don't know if the threat is credible but say they're not taking any chances. >> san jose police have identified two men arrested in the killing of a security guard who was trying to save someone else. prosecutors say they are connected to the deadly shooting last week. they now face murder charges. security guard died after stepping into the line of fire to save a co-worker. the shooting stemmed from a burglary at a liquor store. shots were fired as the suspect

jumped into a waiting car. >> personal use of a firearm specific to mr. hernandez but both of them are charged with all of those same crimes. >> police say they expect to make more arrests in that case. the search is on for a hit-and-run driver who killed one pedestrian and injured another. it happened in oakland on 32nd street and san pablo avenue. the driver of the gold lexus took off running after the crash. the surviving victim is still in the hospital. a mother and her toddler are in the hospital this morning after they were hit by a car. it happened yesterday in san francisco's richmond district at 7th and gary. a bicycle, police say, mother and child were riding a bike when a driver ran a red light and hit them. >> i didn't see the bicycle until airborne. i saw them -- three of them -- in the air, young lady, the little tot and the bicycle doing

cartwheels. >> mom suffered a broke enleg. the little girl had bumps and bruises and the driver's cooperating with investigators. new details, bill cosby canceling performances the once beloved comedian won't be bringing his act to the bay area after a petition started by two women forced the show to be called off. as recently as last week, more women have come forward accusing cosby of sexual assault. there are more than 30 alleged victims. although he's not been charged nor convicted, two bay area venues announced cancellations of cosby's shows yesterday. the flint center and the wells fargo center postponed and not rescheduled cosby's june 6th and 7th shows. after a change.org campaign pressured venues into cancelling. >> there was a strong sentiment from the community college district that it was their

feeling that, given the allegations that were surrounding mr. cosby, it was their preference not to host the event. >> it's unfair and incorrect. we are presumed innocent until convicted. >> the change.org petition received more than 4,000 signatures. both venues here in the bay area had sold about 500 tickets per show. they're now in the process of refunding tickets. new area code is being added to the bay area. 4015 used up. get ready for 628 today. anyone in the 415 area will get a recorded alert unless they dial the full ten numbers, including area code 415. using a landline also will have to add the "1" at the beginning of dialing a number. 415 area code once stretched from the bay area all the way north to the oregon border. but because of supply and demand, there are no longer enough 415 numbers to go around.

>> i grew up in san francisco and i've always had a 415 number. it's sort of identified with san francisco. >> i have to go through all of my contacts and put in 415, that's definitely going to be a pain for sure. >> new telephone lines and services will be assigned the new 628 area code beginning march 21st. >> underwater explosions could help in the demolition of the old bay bridge. caltrans says it's the fastest, cheapest, most environmentally friendly way to tear down the largest foundation of the eastern span of the bridge. crews would attach hundreds of controlled charges to appear underwater and then detonate it. if approved, detonation would happen in november, when fish and marine life members are low. more ahead on "today in the bay," bruce bochy recovering from a heart procedure. his son gives us an update on his progress. plus -- >> good thing if you want to catch perpetrators, people not

supposed to be out and about. but it's also invading your privacy. >> another bay area county wants to be able to track cell phones. a battle of safety versus privacy.

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you're watching "today in the bay." welcome back. we appreciate your joining us 7:10 on saturday morning. live look over somewhere in the bay area. just kidding. that's san francisco below those clouds from san bruno. we will be seeing fog move away and a warm day across the bay area today. tracking our cell phones to fight crime. is it safety or is it spying? is the ability to zero in on a murderer or child molest ter worth the risk of your privacy? our business and tech reporter scott budman tells us more about the debate. >> reporter: we can't hear what this man is saying but we can tell you he's talking on his

phone at the mercado shopping center in santa clara. if the sheriff's department gets its way, they'll be able to track people using the gps in their smartphones. they say they'll only use it to find people of interest. >> it's important for at-risk missing people, that can narrow down the location, find out where they can be to save them, for hunting down somebody who is a murderer or child molest ter or rapist who's a danger to the community. >> we're concerned about how technology's used by law enforcement. >> reporter: as soon as the 500 grant from homeland security to go towards tracking machine was announced, privacy groups reacted with suspicion. >> invasion of privacy issues, concerned with civil liberty issues, how this may be used to target civilians. >> reporter: the sheriff's department insists it won't track what anybody says and it still has to get permission from the county board of supervisors

before it can buy the machine. the public is not so sure about it. >> i don't like being tracked. >> it's a good thing if you want to catch perpetrators, people that are not supposed to be out and about but then it's also invading your privacy. >> reporter: the proposal will go before the board of supes next tuesday. scott budman, nbc bay area news. >> more ahead on "today in the bay." coming up -- the raiders unveil new stadium plans in southern california. and the sharks test the ice at levi's stadium ahead of today's sold-out game. >> talking about 70s. notice we have some fog this morning across the coastline and into san francisco. we'll break down your saturday forecast and tell you about a chance of rain that's headed our way for tomorrow. everything online.r house, t

and our old internet just wasn't cutting it. so i switched us from u-verse to xfinity. they have the fastest, most reliable internet. which is perfect for me, because i think everything should just work.

works? works. works! works? works. works. you're watching "today in the bay." giants' manager bruce bochy is out of the hospital this morning

but many questions remain about his health and his recovery. the 59-year-old released from a scotsdale hospital yesterday after complained of chest pain. the doctors inserted two stents, it's a common heart procedure. bochy's son tells us his dad's doing fine and he wanted to return to spring training asap but doctors will continue to monitor bochy. no word on when he'll return to the team. the mayor of carson, california, planning to bring the raiders and chargers to southern california to share a new stadium. christie smith talked to the mayor of oakland who says it's not a done deal and plans to keep the raiders. >> reporter: the future home of the raiders? shared with the san diego chargers. oakland fans are hoping it never gets off the drawing board there in oakland, nowhere else. >> raiders are in full negotiation mode. >> reporter: mayor says they've

been working hard with the team. >> i am optimistic about the raiders staying here in oakland. we have made significant progress over the last month in putting together a privately financed deal that built the raiders a new great stadium and keeps them near oakland. >> reporter: both teams say they will continue to work to find a plan to stay in their current markets. scott mckibben approved as executive director of the alameda coliseum authority. >> i'm confident i believe, when et cetera all said and done, we're going to be able to come to some sort of resolution that oh works for everybody. without question, without question, mark davis would prefer to stay in oakland as would senior management team. we'll do everything we can to try to move that ball forward. >> the sense of urgency in the room i think is evident. >> reporter: chris dobbins with the coliseum authority, raiders season ticket holder since 1995. >> i want to say no but as a raider fan, we've heard this

story time and time again, we're concerned. >> reporter: christie smith, nbc bay area news. >> believe it or not, it's game day. live look for you now at levi's stadium in santa clara. the stadium series showdown at levi's stadium is finally here. the sharks take on defending stanley cup champion l.a. kings. here's a live look in santa clara for you. we are less than 12 hours away from the puck drop. it will be a warm night for that, which will be good. yesterday team teal tested the outdoor ice acclimating them to the rink. crews say the humidity was the biggest challenge in prepping the venue. but the reviews were good from sharks players. it's a home game unlike any other for san jose, skating in front of 70,000 strong. >> you're in this beautiful stadium, you know, production at the nhl and sharks have put on, tomorrow will be even more spectacular with all of the fans here. >> the professionals weren't the

only skaters at levi's. family and friends allowed to get the feel for what it would be like skating in front of a capacity crowd. if you weren't able to score a ticket, see the game on nbc sports network. i should say it's going to be a warm saturday. anthony slaughter will give us a look at our weekend forecast and what it will be like tonight. >> talking about the biggest problem, the humidity or the lack thereof. we don't ever have humidity in the south bay. could be a big problem. they have insulators around the its to keep it cold. >> i didn't even know that. i figure skated for ten years and i didn't even know that. >> i dpn know it either until i did research. >> power of google. >> talk about this forecast. saturday, notice, i don't know if you've been noticing, sneezing, coughing, it's not spare the air but the pollen. goodness. it has been in full bloom this past week because of the rain we saw though it was a couple of days. that was enough to send all of

our pollen really all of our flowers, trees, everything into bloom. moderate to high category as we head to next week. not go to catch a break on the front. unseasonably warm weather, we have a chance of rain in the forecast tomorrow. right now looking at notice every microclimate very different this morning. south bay, clear, 45. the peninsula, san bruno mountain cam shows fog as far as the eye can see covering some of the coastal mountains, even the city below. over to the golden gate bridge, no fog. clear through that area. you can see, not really any fog there, but look off in the distance in the north bay, that's what we have more fog. up thwarts point ray, covering the coastline. that's the story this morning. fog for some of us. but look at these temperatures. later on, sunshine for everybody. 71 north bay. 69 san francisco. 71 peninsula.

71 south bay. yes, warm, ten degrees above average for many of us. things are about to change starting tomorrow. let's take you into the microclimate. saratoga, 69. almaden valley 71. sunnyvale 697 santa clara 70 later on. the peninsula, what you'll find, closer to the water, temperatures won't be as warm but still comfortable. half moon bay 66 today. millbrae, 67. redwood city, spike up at 70. into the city, if you're headed that way, getting out, maybe do sightseeing, family visiting town, 6 in richmond. 65 for the outer sunset. soma 66. twin peaks 65. from mid 60s to low 70s. you have the day off and want to celebrate the lunar new year that happens today at sf botanical gardens 9:00 to 3:00. the year of the sheep.

i've been hearing different things, year of the ram, year of the go. it's all the same but i'm not n astrologist. tonight, levi's stadium, talking about hockey here. this is what i was telling you about, kira. you can see the insulated pads around the ice, blue tarps, how they're keeping ice cool. but it's going to be nice, regardless, clear skies. temperatures into the 50s. talk about tomorrow. a system coming in from the northeast. this is called inside slider because it goes up and around and then works its way back around. so we're not going to get the brunt of the system but going to get a few isolated showers. this is tomorrow, 3:00 in the afternoon. still a lot of that stuff out across the sierra towards central valley. as it moves in we could see a brief spot shower through the day tomorrow and on monday as well. thing about it, not everybody's going to see rain. it will be mostly concentrated across the east bay foothills and south bay as well. today, warm, sunny.

tomorrow, cloud cover and cooler. and that cooling trend's going to continue into monday, tuesday, wednesday of next week. so even though we're going to get a little bit of showery activity tomorrow, looks better for us as we head towards next weekend. another system could possibly bring us more rain. little bit of rain, sun, something for everybody. back over to you. >> love that. it's an equal opportunity weather forecast. >> right. >> thanks. we have much more ahead on "today in the bay." coming up -- >> okay, i have all of these restaurants and we've been successful. but if we don't improve quality of life of someone, i don't think it really matters. >> chicken and waffles with a side of second chances. restaura restauranteur makes us bay area proud.

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♪ yoplait. with a smooth and creamy taste your whole family loves. don't miss yoplait's exciting new flavors -- creamy caramel and cookies 'n cream. you're watching "today in the bay." >> can chicken and waffles turn your life around? the answer apparently is yes. a popular east bay restaurant is inspiring and employing a lot of

people. people with limited skills or even a checkered past. but their boss is willing to give them a second chance. "today in the bay's" garvin thomas has this morning. bay area proud. >> derek jonsson says, growing up in oakland he managed to stay out of trouble for the most part. he says he didn't remember what it was exactly he did that caused his mother to take him on a trip to visit a family friend in prison. he decided that was not the future he wanted. for those that did end up there, though, well, he wants a different future for them, too. >> reporter: home of chicken and waffles, oakland's jack london square is a place where second chances never tasted so good. >> hello, welcome to chicken and waffles. >> reporter: derek johnson opened the restaurant 11 years ago. at the time, derek says he knew almost nothing about running a restaurant but knew a whole bunch about his hometown of oakland. >> grew up in the city. i grew up in acorn.

how are you doing? >> great. >> reporter: he opened the restaurant wanting it to be a place where customers from all walks of life were welcome. the same went for put together his staff. >> i knew i would get urban applicants, i knew i'd get applicants all mainly from low-income areas in oakland. >> reporter: applicants with criminal records, even those having spent some time doing hard time. that didn't matter to derek. >> i saw people really wanting and eager to work. that's all i needed to see. >> reporter: it is something he saw in this woman. >> making character decisions. served my time. >> let me show you the correct way to do it. >> reporter: less than year working, she's derek's assistant manager, helping to give others the second chance that she got. >> it's amazing. sometimes i go home and i just say, thank you, because you don't get a second chance

sometimes especially with the mistake i made. that's hard to get back into the world. >> reporter: derek says, ex offends are make up majority of his staff. because he says they have proven to be the most loyal, hardest working people he has ever hired, and grateful, too. >> it was very fulfilling to watch a grown man cry when i handed him a check. i was like, why are you crying? people don't cry when they get a check. he's like this is the first time i ever received a collect in my life. >> reporter: derek wishes more businesses knew what he knew because this is one recipe for success that shouldn't be kept a secret. derek says, this isn't just something that benefits the employees. he says in an industry like restauranting with a really high turnover, his employees, well, they stick around for a long time. garvin thomas, nbc bay area news. >> if you know of someone doing something nice for others, garvin would love to hear from you. go to our website,

nbcbayarea.com, and search bay area proud. much more ahead on "today in the bay." coming up -- buyer beware. police issue a warning after one family's trip to disney land takes a surprising turn. plus -- >> supposed to be paying -- >> all of the taxes you're supposed to be paying? >> hidden cameras take you inside a showdown over marijuana taxes in the south bay. the growing controversy over marijuana, the law and millions in unpaid tax dollars.

from nbc bay area this is "today in the bay." >> 7:30 saturday morning. a live look at levi's stadium. 7:00 p.m. tonight, stadium series showdown. san jose sharks take on l.a. kings. good morning. thanks so much for joining us. i'm kira klapper. anthony slaughter has a look at

our microclimate forecast. a warm saturday. >> yeah. >> a different sunday. >> completely different. cool, cloudy. as you saw from the cam, haze over the stadium now. good to see blue sky. even in san bruno, fogged in across the bay this morning. you can't even make out san francisco below. it's hit and miss, this fog. even in downtown san jose, clear skies but haze trying to form. yes, story, clear for some, patchy fog for others. but later on this afternoon we'll all see sunshine, temperatures comfortable. i snapped this shot yesterday. a dogwood that's already starting to bloom. can you believe it? >> wow. >> the second week of -- third week i don't know -- i have kids. but you know what? >> it's february 21, 2015. >> the last week of february. goodness. cooler and cloudy weather on the way for tomorrow. we have a slight chance of showers across foothills tomorrow. more in detail. temperatures in the 40s.

later on, delightful weather. 71 north bay. 69 san francisco. 71 south bay. it will be nice whatever day it is, whatever week it is. but if you have kids you know what i'm talking. >> if you have kids you're lucky i'm here. >> always on time. thanks. we begin with a developing story in the east bay. port of oakland is back in business. businesses across the bay area are celebrating, of course, now that that costly shutdown appears to be over. we have a live look at the port. it was the source of a lot of hurt for local businesses. now after nine months of tense negotiations, a tentative five-year contract has been reached to cover west coast dock workers. the dispute disrupted international trade of seaports that handle $1 trillion of cargo each year. president obama sent thomas perez here to california to encourage two sides to resolve their differences. perez made the announcement over the phone. >> the agreement is fair for

both workers and the businesses operating at the ports. brings to an end what has become a significant headwind for american economy poised for continued, strong and steady growth. >> port of oakland officials say it will take up to two months for the port to get back to normal. trucks will be moving containers in and out of the port and ships that have been hanging out at sea can finally come in. the labor distribute costs businesses millions. san jose police have identified two men arrested in the killing of a security guard who was trying to save a life. prosecutors say juan hernandez and richard cruz are connected to the deadly shooting. they now face murder charges. the security guard died after stepping into the line of fire to save his co-worker. the shooting stemmed from a burglary at a liquor store. shots were fired as the suspect jumped into a waiting car. >> personal use of a firearm is specific to mr. hernandez but both of them are charged with

all of those same crimes. >> police say they do expect to make more arrests in this case. california farmers will be facing some tough decisions this upcoming planting season. once again, it's because of the drought. the snowpack is dismal, which means little water to be delivered to farmers. more fields left unplanted unless more rain comes. the california farm bureau says it will take years to recover from this dry spell. >> we're in for another tough year, regardless of what happens in the next five or six weeks. we get more rain and snow in that time it would make it a little less -- little less difficult for people. >> last year the federal central valley project didn't deliver any of the water it promised farmers. it's expected to issue its first outlook for this year in the next few days. well, another reminder be

wear when buying through craigslist. one family's vacation to disney land got off to a rough start. buying four discounted disney tickets only to find out when she got to disney land, the tickets were fake. >> you have to be aware and do your homework, you know, make sure you don't fall into the trap. >> not only did she lose the money on the tickets but had to spend even more money to buy legitimate tickets. the seller has been caught in a sting by mountain view police. he apparently sold an undercover detective fake tickets as well. starting monday, youtube will release a new kid-friendly app. the program will offer shows like sesame street plus kid safe youtube channels and a timer to limit screen time. this is what it will look like. the free app, free, will be called youtube kids.

one downside it won't be available on ipads yet. right now it only works on google's android system. more ahead on "today in the bay." the warriors take on the defending nba champions at oracle arena. how the "ws" did.

here. a live look outside the levi's stadium. tonight, 70,000 fans will watch the sharks take on the kings in the stadium series. the puck drop at 7:00 p.m. the warriors have only lost twice at oracle arena and one came against the san antonio spurs in the second week of the season. last night it was their chance at redemption. the ws sporting chinese new year jerseys. the night, quite a show for the sold-out crowd. curry behind the back with klay

thompson who knocks down three. then curry around the back himself for the layup on the fast break. steph scored 25 points. klay added 20. 110-99 victory over the spurs thankfully into a new piece of hardware on display plast night. steph curry's three-point contest trophy shown off to the fans on the concourse. people were able to take photos while video of steph winning in the championship round played on the loop in the background. my friend has a picture and there was a cardboard cutout of steph. spring training in mesa, arizona, perry zito worked out with the a's after a year away from baseball. back for his second stint with the team that drafted him with the ninth pick in 1999. zito snuck out after practice but expected to speak to the media today. more ahead on "today in the bay." coming up -- we investigate why some cannabis

shops aren't paying taxes and getting away with it. this morning, getting away with lots of fog across the bay area. some of us looking up at clear skies. but everybody's going to see mild sunshine later on this afternoon. then a chance for showers tomorrow.

7:42 the time. what's it looking like, the golden gate bridge you, can see clear sky. the bridge, no fog here from this vantage point. san bruno, completely fogged. everybody, though, going to continue to see high pollen levels over the next couple of days with a little bit of rain that we saw in december and january. things starting to come out in full bloom. some of our highest allergens now. temperatures in the 40s. but there's the fog, across san bruno, can barely make out the peak of the bridge there. the fog extends over into the east bay and the north bias

well. in fact, as i just showed you, san francisco completely clear. but point reyes, coastal regions of the north bay, fog right up against the coastline. once this fog gets out of here later on, north bay 71. san francisco today 69. tri-valley 70. and the peninsula at 71 degrees. south bay temperature averaging at 71. let's take you in closer to some of the neighborhoods. sunnyvale, 69. later on, evergreen, 70 degrees. milpitas at 69. santa clara topping in at 70. off towards east bay, we take you. notice temperatures very comfortable. this will be where some of our warmest air is. antioch 727 livermore, dublin, sunol 60s. oakland will spike up to 70. two regions, east and south bay, a better chance of seeing showery activity for tomorrow. if you're thinking things to do, got you covered all day. nbcbayarea.com, you'll see more events there. this happening today, palace of

fine arts community noon to 10:00. and it's going to be broken up in intervals. but really, once we get through the evening hours, temperatures falling back into the 60s and 50. comfortable temperatures here. great event. marking the 100th anniversary of the panama pacific exposition. if you know about that, you'll know why they're celebrating that. levi's stadium happens this evening, san jose sharks taking on kings. outdoor rink set up. temperatures comfortable, falling into the 60s, back into the 50s by 9:00. this area of low pressure, this is one i was telling you about, expected to bring showery activity tomorrow. tomorrow morning 5:00 in the morning, this starts to slide down. snow to sierra and spotty shower to the foothills. by 3:00 in the afternoon, showers hang around even through monday. again, thing about this system, not a huge system, not going to bring heavy amounts of rain. really for that matter, we're going to see a good amount of

sun and clouds tomorrow. every now and again, brief light shower. the key is light. it's not a heavy shower. most of us won't see it unless you live across the foothills. they's where we have vast chance of seeing. san jose livermore, brief shower. back to seeing sunshine towards monday with comfortable temperatures, even though we're still going to fall out of the 70s as we head towards next week. kira, still going to be above average. we have been above average since winter started unlike the rest of the country. >> so are you saying we're going to have snow in june or something? >> no, no. not going that far. >> good. thanks. we have much more ahead on "today in the bay." coming up, where is the money? we investigate the multimillion dollar tax battle between san jose and marijuana clubs.

you're watching "today in the bay." >> almost 20 years ago, california voters put cities across our state in the marijuana business. this morning, the nbc bay area investigative unit follows the money. millions of dollars in taxes from the marijuana industry, who is not paying, and why not? chief investigative reporter tony kovaleski has the controversy of pot and taxes. >> in san jose, pot businesses are required to hand over 10% of sales to the city and another 8.5% to the state. but for years the two sides have

battled over marijuana business taxes. a semantic power struggle leaving millions of unpaid taxes. >> we're not close to being closed down. >> those prices do already include sales taxes to the state and the city as well. >> reporter: hearing and seeing one side of the controversy through the lens of hour hidden cameras. >> you are on the up and up? >> we're good. >> reporter: our investigation included visits to more than four dozen recently closed and currently operating pot shops in san jose. >> we pay all of our taxes that we're supposed to be paying. >> you pay all of the taxes that you're supposed to be paying? >> reporter: employees in potshots claim employers are doing nothing wrong, not in any dang or of getting shut down by the city. >> you pay the taxes? >> yes. >> not going to come back, you didn't pay taxes? >> was the information shared accurate? >> no, incorrect.

they're not paying taxes. >> reporter: this woman coordinates marijuana businesses for the city of san jose. since 2011, san jose's collected more than $18 million in taxes from pot shops. but in response from requests from the investigative unit, the city confirmed more than $2 million in unpaid marijuana taxes, penalties, and interests. >> $2 million is a lot of money. has the city dropped the ball by not getting those dollars? >> i would say no. it's the city's goal to eventually pursue that unpaid tax amount. >> reporter: the city's list of noncompliant pot shops includes five active and operating locations. the sovereign wellness center, san jose medicinal group, norcal care, mehdi parts and the cannabis club. >> we can do better. >> san jose mayor. there's at least $2 million that hasn't been collected.

>> yeah. >> that's a lot of money there probably conservative. probably more. >> can the city do more? should the city do more? >> yes and yes. we can always do better. >> worried you're going to be put out of business? >> no. why would i be worried? i'm the only one naseems to understand the concept. >> the ceo of mini marts in san jose. his business is one of the worst offendering owing nearly 500,000 in one paid taxes and penalties. >> only problem we have with the city is the marijuana business tax. >> that's a problem. >> implicates the sale. there's case law and guys in federal prison now that because they paid a tax on cannabis it was considered a sale of a controlled substance so they're doing continue years in prison. the most amazing plant on the planet. >> reporter: armstrong refuses to pay because he fears it will confirm his sale of an illegal drug. >> this is our indoor facility.

where we grow our medicine. >> reporter: he believe his doesn't owe the tack because he's running a closed loop collective. >> these are just the samples of the specials that are in the bowls. >> reporter: growing the pot and providing it to his members or co-owners, he says they're not customers and money they pay for the pot is an equitable contribution and not a sale. you're not paying taxes? >> no, because we make everything ourselves. >> are you paying taxes to the city now? >> we are not. >> reporter: dave hodges owns all american cannabis club. >> do i pay the taxes on top? >> it's already included in the menu. >> she's misinformed. that conversation, i'm going to have to have when i get back to the shop. >> reporter: the all american cannabis club has never paid marijuana business tax to the city of san jose. city records show dave hodges has been noncompliant for four years. more than a half million dollars in unpaid taxes in penalties. >> i want to pay sales tax but by paying sales tax i'm

admitting that i'm selling marijuana, which is violating the law. >> reporter: he's referring to federal law, and the conflict with state laws. hodges and other owners point to this language at the top of san jose's marijuana business tax return. it includes payment of the tax does not authorize unlawful business. >> it's lawful to say you can sell marijuana, we would gladly pay sales tax. but the law done say that. >> reporter: this is a semantics nightmare. >> it is. just needs to be cleared up. >> reporter: worried the city will come and lock your doors? there you know, it's been a concern of mine ever since i started five years ago. >> reporter: what happens your message to these businesses? >> pack up, it's time to move on, and pay up on your way out. i would say to the mayor that he won by 2,000 votes. and that there's a large population in the city of san

jose who wants us here and we're going to stay here. >> we reached out to the three other noncompliant pot shops, norcal care says it's paying back taxes and should be off the list next month. the other two did not respond to our calls. now mayor told us he thinks the city should not be in the business of regulating marijuana. he says if it is a medicine, it belongs in a pharmacy and under the supervision of the fda. with the investigative unit, tony kovaleski. >> more ahead on "today in the bay." coming up -- your our friends from pets in need hoo aare here.

you're watching "today in the bay." >> this morning some special guests from pets in need. executive director is here with sandy. you may remember sanny from a few weeks ago.

her sister alex was adopted. >> sandy developed a case of parvo and had aherna that had to be addressed. we had to wait for her to get older and bigger because it's serious and involved surgery. >> and other shelters, you're a no-kill shelter, in redwood city. the first no-kill shelter in northern california. >> correct. >> other shelters might have, for lack of a better term, euthanized an animal like sandy but you're able to give her surgery and keep her alive, but not without donations. >> right weep have a second-chance fund. it's a special fund that we use to pay for medical expenses for animals like sandy. this surgery will probably cost around $2,000. >> wow. >> but we're committed to no kill. >> yeah. >> we're committed to animals like sandy though they have

medical problems. >> that's fantastic. she's about twice the size now that she was when we saw her a few months ago. >> right. >> how -- how soon will she have that surgery? when can someone hopefully adopt her? >> she'll have surgery hopefully this wednesday and a week or so after that. the following week she'll be ready for her forever home. >> we hope that someone out there will take this little face, this little angel, into their home. every time you come, i want to take these little animals. find out more about pets in need on petsinneed.org and maybe give sandy or another animal a home. thanks so much for coming in as always. thank you for making us part of your morning. more local news at 5:00, 6:00, 11:00 and all day on nbcbayarea.com. we hope you have a great morning.

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