Copies of the federal Complaint
for Forfeiture were taped to the front doors of the two dispensaries
Tuesday, alleging that they were "operating in violation of federal
law."
Medical marijuana advocates, as well as some state and local officials,
decried the action, saying it hurts patients in legitimate need of the
drug and breaks repeated promises by
PresidentObama's
JusticeDepartment that it was targeting only operations near schools and
parks or otherwise in violation of the state's laws.
The U.S. attorney for Northern California, Melinda Haag, said she now
found "the need to consider actions regarding marijuana superstores
such as Harborside" because they presented unique opportunities for
abuse.
Harborside was co-founded by outspoken marijuana activist Steve
DeAngelo in 2006 and was the subject of a reality show, "Weed Wars," on
the
DiscoveryChannel last year. While other dispensary operators have sought a
low profile since California's four U.S. attorneys began cracking down
on the industry in October, DeAngelo has consistently railed against
the federal intervention, advocated for better state regulations and
become a leader in the movement.
"People are not going to stop using cannabis, they're just going to buy
it in the illegal marketplace … on the streets," he said Wednesday in
an interview. "Why are federal prosecutors using their discretion to do
something so profoundly destructive?"
DeAngelo said that he would fight the Justice Department "openly and in
public" and that he would resist any effort by his landlords to evict
the dispensaries in response to the federal complaint — which targeted
the property owners, not the tenants.
While all marijuana use and sales are illegal under federal law, Atty.
Gen. Eric H. Holder told the
HouseJudiciary Committee last month that federal agents were targeting
only those large-scale growers and dispensaries that have "come up with
ways in which they are taking advantage of these state laws, and going
beyond that which the states have authorized."
In a statement released late Wednesday, Haag suggested "superstores
such as Harborside" fit that bill.
"The larger the operation, the greater the likelihood that there will
be abuse of the state's medical marijuana laws, and marijuana in the
hands of individuals who do not have a demonstrated medical need."
She noted that Harborside claims to have "over 108,000 customers."
California's medical marijuana laws are nebulous in regard to how the
drug is to be distributed and courts have yet to settle the matter.
Still, marijuana activists often hail Harborside as a model of
professionalism and compliance. Its main facility in Oakland is one of
four independent enterprises permitted and strictly regulated by the
city.
"If Harborside is not in compliance with state law, no one is," said
DeAngelo, 54.
The Oakland dispensary was awarded its permit in 2006 after the city
put out a request for proposals. DeAngelo says it does about $22
million in annual sales, and the San Jose shop does about $8 million.
Together they pay about $3 million in city and state sales taxes, and
employ more than 100 people.
The state Board of Equalization estimates it collects $58 million to
$105 million in annual sales tax from dispensaries.
"If we continue to drive everything underground, we're going to create
an unsafe environment for patients who need this product … and lose
revenue," board member Betty Yee said.
This week's move against Harborside further highlights the continuing
conflict between local and federal officials over the drug.
"The city of Oakland has developed a system to assure such distribution
occurs according to state law in a fair and orderly process," Nancy
Nadel, member of the Oakland City Council and vice mayor of the city,
said in a statement. "It is most unjust to our citizen patients and
distributors who have followed local guidelines to be harassed and
treated as criminals by federal officials."
Medical marijuana advocates said the Obama administration has
repeatedly reneged on its promises that it would not meddle with the
state laws.
"This is the most obvious and significant step by the federal
government in attacking completely law-abiding dispensaries," said Kris
Hermes, spokesman for the advocacy group Americans for Safe Access. "It
becomes more untenable for them to say they are just going after
certain facilities and not just undermining the state's marijuana laws."
Hermes said the Justice Department has sent more than 200 letters to
dispensaries and their landlords, threatening to seize their property
if the shops do not close. It has been an effective strategy. With the
letters, raids by the Drug Enforcement Administration and IRS
audits, the government has forced more than 400 to close in the state,
Hermes said, including the nearby Berkeley Patients Group, which was
also seen as a model in the industry and closely regulated by local
officials.
He knew only of half a dozen cases in which federal prosecutors
actually filed an asset forfeiture complaint, as they did with
Harborside.
Already, Harborside was embroiled in a battle with the IRS, which was
seeking $2.5 million in back taxes, using an obscure provision of the
tax code to say dispensaries cannot deduct routine expenses such as
rent and wages.
Under Haag's supervision, agents and prosecutors have targeted a number
of leaders in the medical pot movement. In October, DEA agents raided
the Mendocino County marijuana farm of Matthew Cohen, who helped push
for permitting and regulating cannabis cultivation in that county. And
in April, they targeted a pot trade school and dispensary run by
RichardLee, who put the legalization measure
Proposition19 on the ballot in 2010.
In her statement, Haag said: "The filing of the civil forfeiture
complaints against the two Harborside properties is part of our
measured effort to address the proliferation of illegal marijuana
businesses in the Northern District of California."
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