Pubdate: Fri, 13 Jul 2012
Source: Sacramento Bee (CA)
Copyright: 2012 The Sacramento Bee
Author: Peter Hecht


OAKLAND - The Harborside Health Center reveled in its boast of being 
the world's largest pot dispensary. It was featured in a hit reality 
series on the Discovery Channel last year. And it has been one of the 
largest taxpayers in Oakland, a city that turned to tax revenue from 
medical pot sales for fiscal relief.

Now the Harborside Health Center is the latest, biggest target of 
federal authorities' 10-month-long crackdown on California's 
once-burgeoning medical marijuana industry.

U.S. Attorney Melinda Haag confirmed in a statement that federal 
authorities filed civil forfeiture lawsuits to seize Harborside's 
famed dispensary in Oakland and a second dispensary run by the 
medical marijuana organization in San Jose.

The actions brought protests Thursday from advocates who claimed tens 
of thousands of people would lose their medical marijuana provider 
and from officials saying Oakland and California would lose $3.3 
million in annual tax revenue if Harborside is forced to close.

At a packed news conference at Oakland City Hall, Harborside 
executive director Steve DeAngelo said the organization and its 
landlords will fight the forfeiture order and keep open its two 
dispensary locations, which have registered over 100,000 medical 
marijuana users as members.

"Harborside is universally recognized as having set the gold standard 
for legitimate, regulated distribution of medical cannabis," DeAngelo 
said. "There is no legitimate reason to target Harborside Health Center."

In Oakland, Harborside, one of four city-licensed dispensaries, 
featured a vast inventory of cannabis products. It raked in $22 
million in annual medical marijuana transactions last year, paying 
$1.1 million in local taxes to Oakland and $2.2 million in state sales taxes.

Despite its sales volume, Harborside claimed to be a legal and 
transparent nonprofit operator under California law.

U.S. prosecutors have said they are cracking down on California 
marijuana businesses that have been "hijacked by profiteers" who they 
contend are operating in violation of both federal and state laws. In 
a statement, Haag left little doubt that Harborside was being 
targeted because of its sheer scale.

"I now find the need to consider actions regarding marijuana 
superstores such as Harborside," said Haag, who noted that she has 
previously targeted dispensaries located within 1,000 feet of 
schools, parks or playgrounds.

Though Harborside doesn't fit that criterion, Haag said, "The larger 
the operation, the greater 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."

The civil forfeiture action follows other federal crackdowns that 
have focused on some of the icons of California's marijuana movement.

In April, federal agencies raided the home of Oakland medical pot 
entrepreneur Richard Lee, as well as his dispensary and the marijuana 
trade school he founded, Oaksterdam University.

On June 11, federal agents raided the El Camino Wellness Center, 
Sacramento's first licensed dispensary and believed to be its largest 
medical marijuana provider. Federal authorities have also raided a 
Mendocino marijuana cultivator held up as a model for a local 
licensing program for medicinal growers and shuttered two of 
California's oldest dispensaries, the Marin Alliance for Medical 
Marijuana and the Berkeley Patients Group.

Oakland City Council member Rebecca Kaplan protested the action 
against Harborside on Thursday, saying its closure would deny the 
city tax proceeds for critical services and harm people using 
marijuana for medical conditions.

"One might think there was no crime left in America if there are 
extra-hard-core federal law enforcement resources available to do 
nothing but go after these nonthreatening people," she said.

Harborside has been battling the Internal Revenue Service over its 
demand for $2.4 million in back taxes because, under an IRS tax code 
designed for drug traffickers, organizations furnishing illegal drugs 
can't deduct business expenses such as salaries, rent and overhead.
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MAP posted-by: Jay Bergstrom