Pubdate: Wed, 11 May 2016
Source: East Bay Express (CA)
Copyright: 2016 East Bay Express
Author: David Downs


Feds Quit Assault on Harborside, Oakland Passes (Contentious) New Pot 
Rules, and It'll Be Marijuana and Trump Together on California's 
November Ballot.

Oaklanders are in the middle of one of their biggest marijuana 
moments in city history.

Last week, its city council approved a vast, but controversial, 
expansion of Oakland's medical-pot industry. The vote came the same 
day as Mayor Libby Schaaf's announcement that Oakland's biggest 
dispensary, Harborside Health Center, had prevailed in its 
federal-forfeiture court case. Also last week, a coalition of 
activists dubbed Let's Get It Right, California announced all of the 
Golden State would be voting on legalization of adult-use marijuana 
in the November 8 election.

Feds give up Harborside attack

In a major victory for medical marijuana nationwide, Oakland 
officials announced at a press conference on the steps of City Hall 
on May 3 that federal prosecutors were dropping their years-long 
effort to seize the property of Harborside Health Center, the city's 
largest medical-cannabis dispensary.

Harborside is now safe from closing its doors under forfeiture threat 
and will head to court in June to face the industry's next biggest 
challenge: a punitive federal tax law that levies 85 percent on 
cannabis sales (which are still illegal according to federal law).

"The two largest issues facing the cannabis industry now are banking 
and their unfair taxation by the Internal Revenue Service under 
Section 280-E," explained Harborside attorney Henry Wykowski. "It is 
highly prejudicial. It was never meant to apply to state-authorized 
cannabis dispensaries. It was meant to target street drug dealers."

The attorney said the dispensary wouldn't back down. "Once again, 
Harborside is going to stand in the forefront of the industry and 
take that case on," he said.

Harborside's tax trial is set for June 6 in San Francisco. Wkykowski 
hopes to set an industry precedent by winning that case with its 
argument for why such a debilitating business tax should not be imposed.

The dispensaries federal-forfeiture case dismissal is still pending 
final approval, however. The U.S. attorney will not comment on 
pending cases, it told reporters. Wykowski said he would have been 
happy to wait until he had a signed copy of the forfeiture dismissal 
from the federal government, but Oakland Councilmember Rebecca Kaplan 
released the news of a deal, and Harborside went along with it.

Wykowski said federal prosecutors had him and Harborside owner Steve 
DeAngelo sign a dismissal agreement after a week of negotiations this 
past April. "To the best of my knowledge, all of the claimants have 
signed the stipulation for dismissal. We are awaiting the U.S. 
Attorney to file it," he said.

The attorney speculates federal prosecutors gave up on the Harborside 
case in response to overwhelming public opinion, and also because of 
the potential for setting a massive legal precedent in favor of 
medical marijuana. Harborside said it was going to defend itself in 
court using Congress' Rohrabacher-Farr Amendment, which defunded the 
Department of Justice's war on medical pot.

Is the Harborside case the end of federal medical cannabis 
prohibition in America? "I would hope," Wykowski responded.

Congressman Dana Rohrabacher of Orange County said every state-legal 
cannabis business in America should feel heartened by the Harborside dismissal.

"There is hope that the government will get out of our personal 
lives," Rohrabacher said. "This is a great day for freedom in America."

Mixed reaction to Oakland's new pot rules

Oakland's medical-cannabis industry is set to expand. But the city's 
own Cannabis Regulatory Commission is frustrated by dead-of-night 
amendments to city rules, which some argue will cripple existing 
cannabis-industry employment practices and business growth.

Up to eight additional medical-cannabis dispensaries per year will be 
opening in Oakland, as well as more licensed delivery services. There 
will also be the creation of the city's first-ever licenses for 
cultivation farms, edible kitchens and product-testing labs.

The Oakland City Council voted unanimously after midnight on 
Wednesday, May 4, to pass two updates to its cannabis ordinances, 
which green-lighted a vast expansion of licensed and regulated 
medical-pot activity in response to state-level regulations. The 
council didn't begin hearing the items until 11 p.m. on Tuesday 
night, May 3, and finally finished voting at around 1 a.m. the next day.

Updates to the number of dispensaries permitted in the city, as well 
as new delivery laws and industry licenses, have been a work in 
progress for sixteen months at the Oakland Cannabis Regulatory 
Commission. Yet the Council still managed to surprise many at last 
week's meeting.

Councilmember Desley Brooks led a contentious effort to introduce an 
Equity Permit Program amendment. These new equity rules would mandate 
that half of all additional pot business licensees to to applicants 
who live in areas of Oakland where more people are arrested for 
marijuana-related offenses.

Brooks reportedly told the Cannabis Regulatory Commission she was 
"disgusted" with reports of racial bias in the legal pot trade, and 
her goal is to reward underserved communities as well as formerly 
incarcerated Oaklanders with "priority" for new cannabis licenses.

The specific language was widely opposed by the city's own Cannabis 
Regulatory Commission, and even some minority advocacy groups. "We 
made it so any little guy could start," said Oakland Cannabis 
Regulatory Commission member Matt Hummel. "[Brooks' amendment] 
promises to add layers of corruption and attorney's fees."

Oakland's new equity rules now conflict with state's medical pot law, 
according to Oakland Cannabis Regulatory Commissioner and California 
NAACP cannabis task force adviser Sean Donahoe. He said the provision 
will not result in benefits for disadvantaged communities, but 
instead more exploitation.

"They were just happier to pass something, rather than look too 
closely at the details," he argued.

No new cannabis permits will be issued in Oakland without a 
corresponding equity permit. But Donahoe said those convicted of 
marijuana offenses and living in disadvantaged communities often 
don't have funding for a modern cannabis business, or might be 
incapable of raising investment under the new rules. "This will 
create a licensing bottleneck that discourages present operators from 
moving into regulated conditions," he said.

Medical-cannabis operators who live outside Brooks' designated 
priority areas, or those who avoided incarceration through, for 
instance, plea deals, are also unfairly disadvantaged.

"Everything was well-intentioned, but the council had not educated 
themselves," Donahoe said.

The members of Supernova Women, an all-female group of minority 
canna-business advocates, also opposed the Brooks equity amendments, 
saying they "very likely will create a number of unintended consequences."

Oakland's updates to its medical-cannabis ordinance must come back to 
council for a second reading in thirty days. But Hummel said he fears 
the amendments are unstoppable.

"People are really discouraged," he said. "Either the industry is 
going to evolve around it, or we're going to find out it's a 
clusterfuck in a year."

Legalization makes November ballot

California's latest effort at pot legalization officially launched 
last week, on May 4, in downtown San Francisco. An all-star cast of 
politicians, law-enforcement officials, activists and medicine 
experts showed up, and the event drew thousands of press mentions and 
has electrified the electorate with the possibility that cannabis 
could be fully legal for adults on November 9.

But the Let's Get It Right California campaign is far from a sure 
bet. A poll released last Wednesday found a narrow 50 percent 
majority of Bay Area residents in support of legalization. Forty-one 
percent were opposed, while some 59 percent were undecided.

Normally, initiative campaigns want polling to kick off in the 60 
percent range, because opposition forces typically will peel away 
swing voters during a campaign, experts say.

According to reports, that opposition is going to include a 
strange-bedfellows mix of conservative law-enforcement groups, such 
as the California Police Chiefs Association; the California 
Teamsters; "stoners against legalization" such as the Small Farmers 
Association; and in all likelihood Sen. Dianne Feinstein.

Gov. Jerry Brown has not taken a stance on the latest adult-use 
legalization effort, but in the past has said that legal cannabis 
might hurt California's global competitiveness.

Let's Get It Right California has the support of Lt. Gov. Gavin 
Newsom, the California Medical Association, UC San Francisco 
professor Dr. Donald I. Abrams, former Los Angeles Police Department 
Deputy Chief Stephen Downing, former president of the California Fish 
and Game Commission Michael Sutton, California NAACP President Alice 
Huffman, the Drug Policy Alliance, Marijuana Policy Project, National 
NORML, Rep. Dana Rohrabacher, and travel writer Rick Steves, among others.

About twenty groups filed legalization initiatives with the 
California Secretary of State, but only Let's Get It Right raised 
sufficient funds and collected enough signatures to put the Adult Use 
of Marijuana Act, or AUMA, on the ballot. Time has run out for other 
groups to submit signatures to qualify for November.

Organizations supporting Let's Get It Right raised 240-times as much 
money as other pot-legalization groups, some $3.3 million in 
political donations versus opponents' $13,635, according to the 
nonprofit MapLight.

It's worth noting that opponents have defeated pot-legalization 
initiatives with just a fraction of funding before, including 
Proposition 19 in 2010.
- ---
MAP posted-by: Jay Bergstrom