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Feds Target Harborside Health Center — California’s Largest, Most Prominent Medical Cannabis Dispensary

  • by Paul Armentano, NORML Deputy Director July 12, 2012

    Many of California’s most prominent and well-respected medical cannabis dispensaries and related facilities — including Oaksterdam University, Berkeley Patients Group, and Harborside Health Center (HHC) — flourished under the George W. Bush administration. But they’ll be lucky to survive President Barack Obama’s first term.

    On Tuesday, federal prosecutors targeted Harborside Health Center in Oakland, as well as its sister facility in San Jose, for closure and civil asset forfeiture. In court papers filed by the US Attorney for the northern district of California, Melinda Haag, the federal government alleges that Harborside is “operating in violation of federal law” by providing cannabis to state-qualified patients.

    The actions taken by the US Department of Justice stand in sharp contrast statements made by President Obama prior to his election, when he pledged to no longer use federal “Justice Department resources to try to circumvent state laws” regulating the physician authorized use and distribution of medical cannabis — a promise this administration has repeatedly broken. The actions also contradict more recent statements made by US Attorney Eric Holder to Congress in June when he asserted that Justice officials are solely targeting individuals who are “taking advantage of those state laws and going beyond what those states have authorized.”

    Yet despite Eric Holder and the President’s claims to the contrary, the DOJ’s actions against Harborside are consistent with a growing trend by the Obama administration to target and close many of the state’s most prominent, longstanding, and well-respected medical cannabis operations — including the Marin Alliance for Medical Marijuana (1996-2011), Berkeley Patients Group (2000-2012), and El Camino Wellness (2008-2012).

    In April, approximately 100 federal agents raided Oaksterdam University, a brick-and-mortar cannabis trade school in downtown Oakland, and several other properties rented by the facility’s founder Richard Lee. (To date, no criminal charges have been filed against Lee and O.U. has since re-opened.) Internal e-mails from the Oakland Police Department, made public earlier this week, reveal that local law enforcement officials had virtually no advance notice of the federal government’s actions against Oaksterdam, which they criticized as “resource-draining; … [it] exposed our staff to more conflict (harm) as well as complaints than necessary.”

    Commenting on this week’s action, US Attorney Melinda Haag pronounced:

    “This office has used its limited resources to address those marijuana dispensaries that operate close to schools, parks and playgrounds. As I have said in the past, this is a non-exclusive list of factors relevant to whether we should commence civil forfeiture actions against marijuana properties, and circumstances may require us to address other situations.

    I now find the need to consider actions regarding marijuana superstores such as Harborside. 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.

    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.”

    However, in contrast to Haag’s public statement, the federal complaint filed Sunday cites no alleged violations of state law, instead claiming that HHC’s actions violate the federal US Controlled Substances Act.

    Speaking at a press conference today (Watch a recording of it here.)– Steve DeAngelo, Executive Director of Harborside Health Center — rebuffed Haag’s claims, stating that HHC is neither close to a school, nor out of compliance with state law. “Harborside has nothing to hide or be ashamed of,” DeAngelo said in a prepared statement. “We will contest the DOJ action openly and in public, and through all legal means at our disposal. We look forward to our day in court, and are confident that justice is on our side.”

    Harborside Health Center is licensed by the city of Oakland. It employs over 100 people and is Oakland’s second largest retail tax payer. Last year, HHC paid combined taxes in excess of $3 million, over a million dollars of which went directly to the City of Oakland.

    According to a post on the facility’s website, Harborside Health Center intends to remain open despite federal threats. It states: “Harborside is not in imminent danger of closing. We intend to keep the commitment we made six years ago to provide our patients with safe access to the medicine their doctors have recommended, for as long as we possibly can.”

    The US Attorney’s actions come the same week that former US House Speaker, Democrat Nancy Pelosi called on Congress to reform federal marijuana laws to acknowledge the plant’s therapeutic utility. Representative Pelosi had previously criticized the Obama administration’s actions this past May, stating, “I have strong concerns about the recent actions by the federal government that threaten the safe access of medicinal marijuana to alleviate the suffering of patients in California, and undermine a policy that has been in place under which the federal government did not pursue individuals whose actions complied with state laws providing for medicinal marijuana.”

    Harborside Health Center estimates that it serves over 100,000 members. The facility had previously been engaged in litigation with the Internal Revenue Service, which determined that the dispensary could not deduct standard business expenses such as payroll and rent, because it is involved in what the agency terms “the trafficking of controlled substances.”

    86 Responses to “Feds Target Harborside Health Center — California’s Largest, Most Prominent Medical Cannabis Dispensary”

    1. Last year alone, Harborside paid $3.5 million in taxes — $1.1 million of which went to Oakland coffers as a business tax. Additional sales tax and payroll taxes were paid as well.

      The business tax represents the bulk of the $1.4 million paid last year by Oakland’s four permitted dispensaries combined, among them one associated with medical marijuana pioneer Richard Lee that was shuttered in April after a federal raid and is now regrouping without Lee’s participation.

      Lee’s company, which operated the industry trade school known as Oaksterdam University, dissolved, forcing 45 direct employees off the payroll, cutting their health benefits and eliminating 63 other union jobs in related businesses, said Dale Sky Jones, who now operates the university and is rebuilding its curriculum.

      Out-of-towners had flocked to the university’s classes, staying at downtown hotels and further spurring the city economy, added Oakland revenue manager Dave McPherson.

      McPherson said the business taxes paid by dispensaries make up about 2.5% of the $54 million paid citywide. But that is no small contribution in a city struggling with a shrinking police force and the return to the state of $21 million in redevelopment funds, said City Councilman Ignacio De La Fuente.

      “This action will have a long-term impact,” he said. “Landlords will be intimidated into not leasing buildings” to dispensaries.

      Oakland moved in 2004 to limit dispensaries, and in 2009 became the first city to tax the operations. The City Council recently raised the number of dispensaries from four to eight. Applicants are moving through the permitting process but have had difficulty finding willing landlords, said Deputy City Administrator Arturo Sanchez.

      Also coming to the defense of Harborside on Thursday were Rep. Barbara Lee (D-Oakland); State Board of Equalization member Betty Yee, who said her office collects $58 million to $105 million in annual state tax from California dispensaries; and Oakland City Atty. Barbara J. Parker, a former federal prosecutor.

      “I strongly oppose federal actions against members of Oakland’s business community who are complying with California and Oakland laws and regulations and paying their fair share of taxes,” Parker wrote in a statement.

    2. Marcia Ortiz says:

      Sorry to say but Ms. Pelosi talks a good game but how has that worked out for us? Zero and should Obama get elected again say goodbye to the dispensaries. He’d much rather have the Mexican cartels making profits, no? This is disgusting and is among many other decisions by this President where he’ll not get my vote in November. $1000 says Obama and his buddies enjoy some pretty good Kush at our Whitehouse….

    3. Rck says:

      History repeats itself this is the same tactic hitler and the nazis used on the jews in europe.Seizing property and incarcerating non violant people,and as usual the government is ignoring history.They failed and so will this government it already shows in our economy.The politicians keep talking economy they have always talked economy but their is only A certain amount in our economy no mater how you turn it their is only that amount with nothing being added its always gonna be the same.

      [Editor's note: Comparing a civil forfeiture against businesses that the federal government has long considered illegal is NOT comparable at all to Hitler and Nazism. Period.
      BTW, no one at these civil forfeiture actions are even being arrested. Does that sound like genocide to you?

      Are these raids good? No. Should the federal government respect the will of citizens and states' rights? Yes. Do advocates for cannabis law reform have to employ absurd hyperbole to object to a federal government doing bad things? No...it is not needed at all and degrades the otherwise strong case made against the federal government's unpopular Cannabis Prohibition.]

    4. Ozlanthos says:

      Hahahahaha! To all of you who supported/support Obama YOU VOTED FOR THIS!!! Obama NEVER said that he would end the drug war,but you werestill dumb enough to turn your noses up, and totally ignore the one candidate who did! Worse yet, even after acts like this, many of you will do it again, and whine like little bitches on message boards like this one when you don’t get what you never had the balls to ask for!!! The only way cannabis will ever become legal again is when you people get enough sense to vote for candidates WHO EXPLICITLY STATE THAT ENDING THE DRUG WAR IS A PRIMARY ASPECT OF THEIR POLITICAL PLATFORM!!! You have the chance to do the right thing and elect someone that fits the bill! Vote for Ron Paul and lets end the war on the American people!!!

      -Oz

    5. RK says:

      Marcia’s comment about the Mexican cartels brings to mind a political strategy I’ve not thought about before. Some of the right wing blowhards on AM radio have suggested Fast & Furious had a subplot of “gun sales are out of control” to the point it would provide ammunition (pun intended) in a second term assault weapons ban initiative. If those Mexican cartels were put out of business with a successful nation-wide marijuana legalization effort they would completely derail any dreams of such a move. It’s sad that but, this just goes to show that the majority of our elected officials on both sides of the fence have gotten to a point where they feel they can only motivate voters by scaring the crap out of them. I do wish we could go back to voting for what we feel is right and leave voting for the least horrific choice behind.

      I envy those of you in California, Washing and now Oregon. What you’ve done for yourselves concerting this November’s ballot and your legalization initiatives very well could be the beginning of the domino effect we so desperately need to sweep across America. Please don’t give up hope, or think that your one vote won’t matter, or shy away from talking to a friend or neighbor about their vote, or calling your local Normal office to volunteer… Though we are in a more promising position than we ever have been, we’re up against an established system of fear mongers that have been feeding otherwise good people with propaganda for decades. It’s still an uphill battle but, a majority of the nation has your back and will be watching for you to tumble those dominoes with great anticipation.

    6. Ronditlesauvage says:

      Just a thought… If Obama really wanted the drug laws to change, but didn’t want to put his neck on the line to do it, one way to do this would be through the kind of actions he is taking. Take someone like deAngeles into the legal system, knowing that a competent hamndling of the case, by a well-funded group, will almost certainly result in the Supreme Court tossing the existing laws. What better case – HHC is known to huge numbers because of the television program, which painted a fairly sympathetic picture of the place and its people.
      If that isn’t Obama’s plan, well, I pity him, but it will work like that anyway…

    7. Don't call me a stoner says:

      Well, I hope that harborside prevails in a federal court of law and proves that hemp laws and the stamp act are illegal. Expose all the lies about cannabis. Expose Anslinger for the racist and criminal that he really is, as well as Hurst and Dupont. Provid all the documentation regarding the benefits of cannabis by independant as well as government studies. This could be the president we need to make cannabis legal again a repeal the prohibition of hemp. Hopefully harborside has the money and guts to not plea bargin.

    8. Don't call me a stoner says:

      precedence. Not president… Sigh spell correction..

    9. Hali says:

      I know it, you know it. Medicinal marijuana is a hypocritical fudge that will lead to the consolidation, not the abolition, of drug laws.

      I think it’s a good thing that the dispensaries are being closed: perhaps it’ll spur the jaded, complacent, authoritarian weed hounds into action to demand true legalisation, and of all soft drugs, not just your favourite.

    10. GS says:

      “I now find the need to consider actions regarding marijuana superstores such as Harborside. The larger the operation, the greater the likelihood that there will be abuse of the state’s medical marijuana laws”

      Does this “supreme being” think that she has the power to regulate industries based on her own opinion? Using that philosophy, she should be shutting down half of silicon valley for being too big & successful… Not to mention most of the crooked financial institutions.

      She needs to follow her boss Holder south of the border, to visit “their” thriving industries.

    11. sue says:

      i think this is goverment protecting big pharma interests. i have been able to go off of two presription drugs for fibromyalgia because of weed ! not something the drug companys want to here !

    12. Mike Stroup says:

      I often wonder what it would be like to live in a free country, like the one described in the Constitution of the United States, for even just one day.

    13. Rck says:

      Well sorry editor I didn’t say they are committing genocide.As for being absurd the Nazis seized A great deal of property and people are always being arrested.It is failing and excuse me for being extreme.. about this it was out of passion that I wrote that.

    14. Dave Evans says:

      Hmm, well maybe not the Nazis, but nazis-like for sure. There are plenty of parallels: A particular group (pot heads in this case) are selected as a “catch all” scape-goat for societies ills. I mean, I’ve seen government ads demonstrating how weed is dangerous to young women ’cause it might facilitate them being raped. This is hateful propaganda falsely targetting folks that do partake. The message clearly is “smoking pot makes you a degenerate”. Similarily, the Nazis often said Jews are “degenerates”. While the USA government isn’t in the control of nazis, some of our leaders do have nazis tendencies. Even before WWII some of our folks in congress thought we should join Germany’s side…

      [Editor's note: No person elected in the United States to Congress or the Senate is even close to Nazi-like. This is reckless hyperbole.

      Members of the Congress maybe misguided, mis-educated, corrupted or just plain ignorant...but not a one of them is remotely close to the evil embodied by Adolf Hitler and the Third Reich.

      Cannabis law reformers can more than aptly make their points about the need to immediately reform cannabis laws, or, that some politicians are too recalcitrant and should be voted out of office without making false and potentially damaging analogies to any executive or congressional branch administration--led by either political party--to the ruthless, murderous and highly calculated actions taken by the Third Reich.

      Cannabis Prohibition is bad...no doubt. However, seriously comparing it to Nazism is even worse. The former is largely an expensive inconvenience for most during a distinctive epoch in history, while the latter is an attempt to control the world and humanity through unspeakable violence.

      There is a difference...

      Cannabis law reformers who hope to be taken seriously by their elected officials and media should not try to make public comparisons between Cannabis Prohibition and Nazism.]

    15. Rck says:

      OK this persecution is authoritarian.

    16. [...] phenomenon, the deputy director of the National Organization to Reform Marijuana Laws (NORML) had this to say about it: Many of California’s most prominent and well-respected medical cannabis dispensaries and related [...]

    17. [...] Well, that was stupid of them. Many of California’s most prominent and well-respected medical cannabis dispensaries and related facilities — including Oaksterdam University, Berkeley Patients Group, and Harborside Health Center (HHC) — flourished under the George W. Bush administration. But they’ll be lucky to survive President Barack Obama’s first term. [...]

    18. Don't call me a stoner says:

      The truth is; Cannabis prohibition is a crime perpetrated against humanity.

    19. Dave Evans says:

      Well, ask any Nasiz, they will tell you they are “doing it for the better good.” Which is a load of you know what. I’m not comparing the USA to the third reich.

      Nazism isn’t about murdering people, BTW. Any gang has that covered. It is about fasism and nationalism along with a heavy dose of racism. You mean to tell me it is love of our neighbors that is driving the USA to fight this endless war against drugs which is even destablizing Mexico?

      It is ecomony warfare directed against our southern neighbors. Billions which should be going into the legal Mexican economy are diverting into the hands of warlords–this isn’t an “unintended consequence of the War on Drugs”. Treating brown people from Mexico like crap is one of the driving ideas behind this War. If Mexico had a thriving economy, cracker/nazis type people here couldn’t ‘slave’ illegal immigrants. They aren’t interested in what is good for us. And yeah, people are dying, they just aren’t pulling the trigger themselves.

    20. chris says:

      Why are we not trying to get Gary Johnson elected?

    21. Farrok says:

      The Mexican Cartels love these types of actions as it increases their profits. 55,000 deaths in the current drug war in Mexico to date. All the cannabis on Earth is not worth one human life. Stop this insane war on our friends, family and children. It’s insane how the government sustains and strengthens the Cartels. Whose side are they on anyway?

    22. karen duke says:

      I am a 55 year old CHRISTIAN grandmother, mother and wife. I have severe RA and fibromyalgia, plus several other health problems. I am disabled, and can’t live on SSDI alone. I was going to school to be an occupation therapy assistant, to try and help other people like me in pain. But, those dreams are gone. I got pulled over on routine DUI stings on weekends in Wisconsin. Because they saw what they thought was a pipe, I was threaten to bring in the drug dogs if I didn’t allow a search. I was not intoxicated. I have not drunk alcohol in over 10 years by the grace of God and the help of AA. But now, I’m a criminal that has to go to jail for 7-8 months, 3 yrs. probation That is more time than the guy that robbed our Kwik Trip Now, I have to start back taking the vicadin and oxycodone. I hate taking these drugs. What choice do I have? These laws are terribly unjust. As far as the older generation which I now belong to, they will find out the healing properties of God’s gift of green plants that he stated belong to us. We have to stand up for ourselves, however we can. If we have to set the White House on fire for them to hear us, I have lots of matches that I can light. WE the people have to take our government back. Roseanne Barr is better president material than Obama or Romney. I am not a criminal. Both of my sons do not drink or smoke. Not saying that they haven’t in the pass. The point is that this marijuana smoking mama raised to fine citizens that have excellent jobs and are an asset to their communities. I have not been in trouble with the law in the pass, and have dui now only because of the THC in my body. I have never been in an accident I have had several friends that have died due to alcohol. WISCONSIN needs to get onboard with the rest of the states. Please people; let’s do whatever we can to take our country back from crooked politicians and professional liars we have in our government today. I’m with Roseanne Barr, throw out all the politicians and start over.

    23. richard thiede says:

      If there is another substance that will enhance my appetite, improve my mood, and reduce the weirdness in my near paralyzed legs..( I have ALS ) let me know! There are no treatments for this nasty disease
      Appetite is so important..cannibus is the only treatment I am award of.that addresses the symptom.
      If anyone knows something I don’t..about a legal product to take its place …speak up…I’ll make you famous!!

    24. pk says:

      the white house should legalise this drug called marijuana. I am so sick and tired of hearing all these killings done by the drug cartels in the news everyday. Non-legalization of marijuana only puts money into the pockets of this cartels and makes them richer day by day, period! I wonder what Obama is doing in that white house? Mcheww.

    25. david says:

      pot should be made legal and ron paul was are onley hope.the cia i guess wount to reman the top drug loards of the usa along with the mexicans.

    26. SDS says:

      Hi, Karen from Wisconson, love ya, you are exactly right on. I’m from Wisconsin also, I have the same situation. I used to drink in my 20’s, so I stop drinking awhile back. Then I noticed severe pain in the left side of my neck,ear, and back pain. I started taking opiates for 3 years and had to go to rehab to quit. Then started smoking marijuana again as I did in my younger years. I then get pulled over for no reason, officer says, he seen me drive all the time and I didn’t have a DL. He says I thought you were somebody else and then asks if I was drinking because my voice sounds low and raspy. Keep in mind the vehical I was in was my mother’s who never even had a ticket. I’am now facing a Felony DUI for having THC in my system and the day I got pulled over I had not even smoked for 2 days. Sorry for the long story, I guess we all need to vent sometimes. I hope and pray the war on drugs is stopped one of these days and they stop putting nonviolent tax paying citizen’s in prison. Thanks! SDS

    27. lockedoutofthesheddammit says:

      to the editor i say your right, we have no buisness comparing the nazi movement with americas cannabis legalization problem but, i do have a question for you.do you think it may NOT be what our president is doing to stop legalization of cannabis but, the influence of huge american corporations who would be growth affected (money lost) if cannabis were to become legal..i feel their is a “crystal palace” of corporation “royality” that REALLY runs our country and, all they have to say is”if you legalize cannabis…we will pack up our american based companies and go to foriegn soil” because , its ALL about the money people….as long as that influence is here…cannabis will NEVER be legal…people, you cannot blame this all on one man..their is WAY too much selfish influence in our government and the lure of money and power is what drives the monster..help me with this mr editor…and, thank you for providing your insight and support for the legalization of the natural remedy….

    28. Texas says:

      To all of the medical marijuana owners and people that are in the biz to make a profit who never wanted to see legalization b/c it would hurt your pockets…HAHAHAHAHA. I’m so glad they are shutting your sorry asses down, now maybe you now think about something else other than profit and legalize. These medical profit centers never wanted to legalize b/c they would be able to make money. I say, Fuck you assholes, you’re no different than the government. You all say the hell with everyone that gets prosecuted for small amounts of herb, as long as you make money, that’s all that matters. LOL, you all are so stupid and I’m glad it’s catching up to you now. As for Harborside, Steve DeAngelo, eat a dick asshole. You said on your show that you never wanted to see legalization…well maybe you’ll have a different thought process when they shut your ass down.

    29. Candice Howren says:

      The US GOVERNMENT took out patent # 6630507 on the Cannabis Plant for Medical Purposes in 2003.
      Google it!

    30. Krymsun says:

      Medical Marijuana Patients Get Their Day in Federal Court with the Obama Administration
      July 30th, 2012

      D.C. Circuit to hear oral arguments this October in lawsuit challenging marijuana’s federal classification

      The United States Court of Appeals for the D.C. Circuit agreed to hear oral arguments in Americans for Safe Access v. Drug Enforcement Administration, a lawsuit challenging the federal government’s classification of marijuana as a dangerous drug with no medical value. The D.C. Circuit is scheduled to hear oral arguments on October 16th at 9:30am.

      If the rescheduling lawsuit is successful and marijuana is reclassified, federal defendants will then gain the basis for a medical necessity defense.

      http://www.safeaccessnow.org/article.php?id=7260

      See also: http://thinkprogress.org/justice/2012/08/01/620211/federal-court-will-review-marijuanas-classification-as-a-dangerous-drug-with-no-health-benefits/

    31. [...] “There is no reason to close them, from everything I have read, but they’re too large to be trusted, so I say, Off with their head!” [...]

    32. [...] they so far claim to only target dispensaries that are in violation of state law.  Many feel that threats to Harborside Health and other high profile California collectives had nothing to do with state law.  In addition to [...]

    33. [...] they so far claim to only target dispensaries that are in violation of state law.  Many feel that threats to Harborside Health and other high profile California collectives had nothing to do with state law.  In addition to [...]

    34. Stoney says:

      “Land of the free” what a crock of crap! cannabis is a “seed bearing plant” in the bible, God says, I give you every “every” seed bearing plant.

      its all about THE MONEY / THE POWER & LOTS OF GREED. I agree with Roseann Bar to throw them all out and start over.

      thankfully I live in WA. and have my medical Dr. ok my use of cannabis.

      WE ARE THE PEOPLE, AND WE HAVE SPOKEN

      Our biggest problem is the fact that our own Govt. has forgotten how to listen when “we the people speak !

      I am now going to go medicate myself with some fine cannabis and try to get some much needed relief and rest.

      ~Stoney~

    35. [...] crusade against drugs—signing off on increased drug task force spending, ramping up raids of medical marijuana facilities by a factor of eight contrary to repeated promises he would stop them, allegedly arming Mexican [...]

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