Pubdate: Wed, 15 Jul 2015
Source: East Bay Express (CA)
Column: Legalization Nation
Copyright: 2015 East Bay Express
Author: John Geluardi


The City's Lax Attitude Toward Medical Cannabis Makes It Difficult to 
Shut Down Illegal Clubs.

The City of Oakland is renowned for pioneering cannabis regulations 
and its policies have served as a model in the 23 states that have 
legalized medical marijuana. But Oakland's recent attempt to close an 
unpermitted dispensary that has flouted city laws and avoided paying 
thousands of dollars in permit fees has exposed a problem: The city's 
tolerance of medical marijuana use has made it tough for code 
enforcement to regulate rogue dispensaries.

The city does not have a huge problem with unpermitted dispensaries 
but it is an issue that crops up regularly. According to a 2014 
report from the City Administrator's Office, the city has identified 
at least 43 illegal dispensaries in Oakland since 2005. Nearly all of 
those dispensaries have been closed, but when these so-called 
"Measure Z clubs" - named for the ballot measure that regulates 
dispensaries - do pop up, they are difficult to deal with because 
Measure Z has made investigation of personal adult cannabis use a 
rock-bottom priority. That means it's tough to get police to 
investigate medical cannabis-related violations, which in turn means 
there is no hard evidence, such as "buy-busts," cannabis evidence, or 
police reports.

Attorney Oliver Jones, who is involved in a current legal dispute 
with the city regarding an unauthorized dispensary, said Oakland's 
pot policies are a bit "Kafkaesque," referring to author Franz Kafka, 
who often depicted government bureaucracies with conflicting policies 
and disorienting justice systems. "The city wants to close down 
unpermitted dispensaries, but it's such a low priority they can't 
investigate enough to show that anything illegal is even going on," Jones said.

And that has been the problem with the City Administrator's Office's 
attempts to shutter the First Hemp Bank, a dispensary that is 
currently operating on Champion Street in the Fruitvale district. The 
owner, David Clancy, has been running the dispensary since 2000 and 
running it without a permit since 2004 when the city first began issuing them.

The process to shut down the dispensary began in March 2014 when the 
city served landlord Douglas Freitas with a threatening letter 
stating he would be fined $1,000 a day unless he immediately began an 
eviction proceedings against Clancy. Clancy then put the whole 
process on hold by hiring attorney Demetrius Costy to appeal the 
abatement order.

Clancy's appeal argues that First Hemp Bank should be grandfathered 
in because it was in operation before 2004 when the city first 
adopted its cannabis ordinance. Clancy also claims that he has 
regularly paid city taxes and that there have been no neighbor 
complaints about the day-to-day operation of his business.

Assistant City Administrator Greg Minor called Clancy's assertions 
"misguided" and "nonsensical" in his written response. The city only 
allows eight dispensaries and all of the available permits have been 
issued. Minor also pointed out that Clancy has been defying city law 
by operating without a permit and thereby dodging a $60,000 annual 
permit fee, as well as city inspections. "Mr. Clancy has been 
flouting Oakland's medical cannabis regulations for far too long," 
Minor wrote. "The unpermitted distribution of cannabis at 3480 
Champion is not only a public safety concern, but it creates an 
uneven playing field for licensed operators who abide by a host of 
public safety codes and pay city taxes and permit fees."

Nonetheless, at last week's arbitration hearing, Minor could not 
prove to arbiter Stewart Rine that Clancy had been selling medical 
cannabis at the Champion Street location. In fact, Minor could not 
show that cannabis, or even a cannabis seed, has ever been on the 
property. Minor presented Rine with internet promotion printouts for 
Clancy's cannabis products as well as fliers that had been circulated 
in the Fruitvale district, but the arbitrator considered that 
information to be hearsay evidence.

At one point, Rine became so frustrated with the lack of hard 
evidence, he threatened to move the arbitration hearing to the 
Champion Street property to see exactly what was going on there. But 
both the city and Clancy's attorney protested. So Rine instead 
postponed the arbitration hearing until July 30, in order to give the 
city time to present a better case.

"In a way, I kind of felt sorry for Greg Minor," said Jones who is 
representing Freitas, the landlord. "The city wants him to close down 
these allegedly unpermitted dispensaries, but they won't give him any 

Neither Clancy nor Costy returned calls seeking comment for this 
story. Jones said his client has protected his interests by serving 
Clancy with an eviction notice, though it will likely be rescinded if 
Clancy manages to beat City Hall and is allowed to continue operating.

Despite last week's setback, Minor said he is confident that the city 
will prevail. "I anticipate winning, but even if we were to lose, 
there are other things we can do," he said.
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MAP posted-by: Jay Bergstrom