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

July 12th, 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.”