Pubdate: Wed, 04 May 2016
Source: San Francisco Chronicle (CA)
Copyright: 2016 Hearst Communications Inc.
Authors: Jill Tucker and Peter Fimrite


In a milestone victory for the cannabis industry, the federal 
government agreed to drop its four-year bid to shut down Oakland's 
Harborside Health Center, the biggest medical marijuana dispensary in 
the country with more than 100,000 patients, city leaders said Tuesday.

The Department of Justice did not immediately comment on the deal, 
which Harborside said still needed to be finalized, with all of the 
parties in the legal fight signing off.

But Oakland officials joined the pot dispensary in an exultant news 
conference at City Hall, heralding a move they saw as symbolic of a 
federal withdrawal in the battle against an industry that is steadily 
marching toward acceptance - and is viewed in Oakland not as a 
scourge but an economic engine.

"We celebrate the release from federal prosecution," said Mayor Libby 
Schaaf. "We believe in compassion, we believe in health."

Legal experts said the reported deal was momentous. It underscores 
the country's shift to a "new model" for dealing with marijuana, 
whether medicinal or recreational, said Robert MacCoun, a law 
professor and drug policy expert at Stanford University.

"The framework is moving from the war on drugs to tricky issues of 
regulation, taxation and who is going to be in control of this major 
new industry," he said.

Indeed, the Harborside announcement came as the Oakland City Council 
was set to consider broad new laws regulating and taxing its 
multimillion-dollar medical marijuana industry at its Tuesday evening 
meeting. The expected vote followed a months-long process to both 
rein in and exploit a growing sector of the economy.

Harborside, on the Oakland Estuary, has faced potential closure since 
2012, when the U.S. attorney's office cracked down on the industry 
across California and attempted to seize the buildings that housed 
the businesses. Federal officials called centers like Harborside 
"marijuana superstores."

While Harborside, which also operates in San Jose, stood its ground 
against the federal civil case, hundreds of other dispensaries across 
California, facing similar federal threats, shut down operations.

Shutdown in Marin

In Marin County, former U.S. Attorney Melinda Haag threatened to 
seize the property of the Marin Alliance dispensary in 2011 and 
prosecute the landlord for drug dealing and providing medical 
marijuana within 1,000 feet of a Little League field, a crime 
punishable by up to 40 years in prison. The dispensary closed.

"As of today, Harborside Health Center is in the clear and will no 
longer have to worry about a looming raid," said Oakland Councilwoman 
Rebecca Kaplan. "Supporters are pleased to hear that the case has 
been dropped so that patients suffering from chronic pain can have 
peace of mind that they will be able to get their medicine through 
safe dispensaries.

"By taking this stance in Oakland," Kaplan said, "we have shown the 
rest of the country what's possible."

Steve DeAngelo, Harborside's executive director, said the resolution 
of the lawsuit "signals the beginning of the end of federal prohibition."

Marijuana remains a controlled substance, but federal policy now 
prevents action that interferes with state laws regarding marijuana. 
California is among two dozen states where voters have authorized 
medical marijuana use, while four states and the District of Columbia 
have authorized recreational use as well.

A coalition pushing an initiative to legalize recreational use in 
California, known as the Adult Use of Marijuana Act, said it will 
gather Wednesday in San Francisco to celebrate getting enough 
signatures to qualify the measure for the November ballot. Lt. Gov. 
Gavin Newsom was expected to join in the kickoff of a campaign that 
could dramatically reshape the state's cannabis industry, again.

"In the nearly four years since the federal government filed its 
forfeiture action, there has been a major evolution in public opinion 
and a shift in the landscape of national politics on this issue," 
said Oakland City Attorney Barbara Parker. "The American people are 
recognizing that cannabis is not only a legitimate medicine, but that 
federal laws outlawing marijuana have been wasteful and harmful, 
especially to communities of color, where people are more likely to 
be incarcerated for possession of cannabis."

MacCoun said there were two possible interpretations of the 
government's decision to back off Harborside. Either prosecutors 
can't make the case or they no longer want to make the case.

'Pretty significant shift'

"In either interpretation, it's a pretty significant shift," MacCoun 
said. But he cautioned that the move does not mean the weed wars are 
won, explaining that it reflects the thinking of only President 
Obama's administration.

"There is some uncertainty about what the new administration is going 
to do," he said.

Oakland backed Harborside during the legal battle, suing the federal 
government to stop the property seizure. The city argued it would 
lose millions of dollars in taxes, and that the close of Harborside 
would increase crime by forcing many of the dispensary's patients to 
turn to street dealers.

While the U.S. Supreme Court ruled in March that the city could not 
intervene, Harborside has been able to remain open during appeals.

Oakland leaders said Tuesday there was still work to do to ensure 
medical cannabis businesses can thrive. Most banks and credit card 
companies, citing federal law, refuse to do business with marijuana 
enterprises, leaving those businesses with mounds of cash and nowhere 
to deposit the money.

"I am pleased by today's victory," said Rep. Barbara Lee, D-Oakland. 
"But we must keep fighting until the federal government stops 
erecting barriers between patients and their medicine."

The Oakland City Council was poised to knock down some barriers 
Tuesday evening with a new medical marijuana ordinance.

While Oakland was the first city in California to regulate a handful 
of dispensaries, just eight now operate as sanctioned businesses, 
subject to sales tax, public health and safety regulations, 
environmental and employment rules, and other city laws. Gov. Jerry 
Brown, though, signed a set of bills in October creating a regulatory 
structure for medical pot, one that allows cities to set policies 
related to all aspects of the industry.

The proposed ordinance in Oakland would increase the number of 
cannabis-related businesses permitted in the city from eight to 
nearly 100. Officials expect to permit eight new dispensaries, 30 
cultivators, 12 delivery services, five distributors, five 
transporters, two testing entities and 28 manufacturers.

Millions in revenue

David McPherson of HdL Companies, which offers guidance on handling 
the explosion of medical marijuana to cities and counties, said 
permitting 30 growers in Oakland could bring in about $9 million in 
annual revenue, while doubling the number of dispensaries could mean 
$3 million more or so in sales and business taxes.

Oakland's proposed ordinance would also limit the industry in some 
ways - with a 600-foot buffer required between dispensaries and 
schools or youth centers. In addition, the proposed regulations would 
ensure many of the jobs within the industry go to Oakland residents, 
including those with a criminal past.
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MAP posted-by: Jay Bergstrom