Realising she is being filmed, the woman ducks behind a retaining wall.
"You can hide all you want," the mother said. "The whole world gonna see you, boo."
The woman on the phone then snaps back: "And illegally selling water without a permit?
"On my property," the girl's mother says.
"Its not your property," the woman responds.
The little girl's cousin tweeted footage of the incident, referring to the complaining woman as #PermitPatty.
Angry Twitter users slammed the woman for her petty actions.
Their anger intensified when the woman was revealed to be an entrepreneur named Alison Ettels, who sells cannabis-laced treats for animals "suffering anxiety issues", allegedly without a permit.
"Grown adults calling the police on eight-year-old black children for basically setting up a lemonade stand," tweeted prominent music producer DJ Pain.
"Only a devil would want to see an 8 year old child in the criminal justice system."
Another user going the name J'Schalla tweeted: "This is America, where a grown San Francisco woman will call the cops on an 8-year old girl for selling water outside of her apartment building. #permitpatty"