Archive for the ‘oakland’ category

Police Department Puts Drugs Ahead of Solving Homicides

November 5th, 2013

One of the many predicted benefits of regulating marijuana is to allow police to focus on solving violent crimes, and an investigation into the Oakland Police Department shows just how imperative that focus is.OPD In 2012, OPD solved only 28% of homicides, a figure that is largely due to an incredible backup of untested evidence.  The OPD’s crime lab has yet to test evidence pertaining to 659 homicide cases, some of which are 10 years old. Furthermore, the crime lab has no idea which of the cases with outstanding evidence have even been adjudicated or closed, meaning cases are being settled before the evidence has even been tested.

What makes all of this even more outrageous is that the OPD crime lab has processed evidence for 95% of all suspected drug cases within 24 hours of receiving it and has no backlog of evidence for drug cases. They have prioritized drugs over murder.

There is no excuse for allowing homicide evidence to go untested while pouring precious resources into testing evidence for every single drug case. We need to focus the resources of our criminal justice system on violent crimes.

Blacks And Latinos Dominate Oakland Marijuana Arrests

March 8th, 2013

A New Report Also Shows That 20 Percent of the Drug Arrests Are Cannabis-Related Despite a City Law That Makes Pot the Lowest Law Enforcement Priority.

Until US Attorney Melinda Haag launched her much-criticized crackdown on Oakland’s medical marijuana dispensaries last year, the city was held up as a beacon of level-headed tolerance toward cannabis in the pot-friendly Bay Area.  And even when the statewide campaign to legalize pot for recreational use failed in 2010, city officials were still among the most outspoken in California for large-scale medical pot cultivation.  Casual weed smokers have also found Oakland to be a welcoming place: The successful 2004 ballot initiative Measure Z made adult recreational use of marijuana the lowest law-enforcement priority for the Oakland Police Department.

However, a report released last week by the city commission that monitors OPD’s compliance with Measure Z includes troubling findings about the racial composition of Oaklanders arrested for marijuana-related crimes.  According to the Cannabis Regulatory Commission’s biennial report, roughly 20 percent of Oakland’s narcotics arrests in 2011 were for marijuana offenses – and 95 percent of arrestees were black or Latino.

“In a city as diverse as Oakland, the committee needs to take to heart that the vast majority of marijuana offenses are being enforced against minorities,” said Sierra Martinez, an environmental attorney who has been a member of the Oakland Cannabis Regulatory Commission since 2011.  “There is a history of the Drug War being enforced against low-income communities and communities of color, and this is recent evidence of that reality.”

Nationally, marijuana use is more prevalent among whites than blacks or Latinos, yet people of color are arrested far more frequently for cannabis use.  And even though more and more states are legalizing medical marijuana – and in the cases of Colorado and Washington, recreational adult use of pot – someone is arrested for pot-related offenses in the country every 42 seconds, according to an FBI report issued last fall,

Of the 452 people arrested for marijuana offenses in 2011 in Oakland, 74.5 percent were African American, 13 percent were Latino, 5 percent were white, 3.7 percent were Asian American, and 0.4 percent were Native American.  According to 2010 census data, Oakland’s population is 28.0 percent black, 25.9 percent white, and 25.4 percent Latino.

The 452 arrests in 2011, however, represented a significant drop from 711 arrests in 2010 and 736 arrests in 2009.  The lion’s share of arrests in each year was for possession of marijuana for sale – 275 in 2011, 517 in 2010, and 571 in 2009.  The arrest data was provided to the commission by Oakland Lieutenant Michael Poirier.

However, the commission’s report noted that OPD’s dramatic reduction in staffing, Oakland’s spiking violent crime rate, and the passage of SB 1449, which decriminalized the possession of less than an ounce of cannabis in California as of January 1, 2011, as other potential reasons for the numerical drop in arrests.

Michael Wilson of the Alameda County Public Defender’s office told the Cannabis Regulatory Commission in October 2012 that his office rarely sees marijuana-related offenses.  The few cases the Public Defender’s Office does deal with, Wilson told the commission, “often have several other factors involved,” and marijuana use in public spaces such as a street corner or in a vehicle often provides officers with probable cause to further engage or search that individual.

Anecdotal evidence over the years indicates that OPD officers have used marijuana offenses as a form of leverage to bring charges against suspected gang members, either through criminal court or the mechanisms of parole or probation violations.  Court documents from the city’s gang injunctions in North Oakland and the Fruitvale district showed that several of the defendants in both cases, including Abel Manzo, one of the main defendants who contested his gang status in front of Alameda County Superior Judge Robert Freedman in 2011, were contacted initially by OPD for marijuana-related crimes.

“If we detain somebody, they have numerous baggies of weed on them, they’re on probation for selling weed, we don’t consider that a medical cannabis offense and they’ll go to jail,” Assistant Police Chief Anthony Toribio told the city council Public Safety Committee on February 26.

OPD also has to contend with numerous illegal large-scale grow operations in the city.  Several grow operations are discovered each year, and some involve heavily armed individuals with links to larger criminal organizations.  In late April of last year, OPD arrested eleven people in a raid on a fortified East Oakland warehouse.  Officers seized 2,500 marijuana plants, 50 pounds of dried pot, $40,000 in cash, 7 firearms, and body armor from a building that had interior doors that were reinforced with steel.

Still, Martinez and other members of the Cannabis Regulatory Commission believe OPD is still overly concerned with a substance that Oaklanders have made clear is not a threat.  Martinez noted that 20 percent of all narcotics arrests in recent years have been cannabis-related.  “At a time when violent crime in on the rise, it’s a waste of resources to be enforcing the marijuana offenses,” he said.

The cannabis commission also recommended that the city council modify its anti-smoking ordinance to let property owners allow pot smoking “in designated rooms of hotels, restaurants, clubs, cannabis dispensaries, and other facilities, so long as they are properly ventilated and do not pose objectionable odor hazards to neighbors.” Commission members have noted that there is no evidence that smoking marijuana causes cancer or emphysema, nor is there evidence of harm from second-hand smoke.

Source: East Bay Express (CA)
Copyright: 2013 East Bay Express
Author: Ali Winston

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.”

Marijuana Entrepreneur Charged With Defrauding Oakland

May 18th, 2012
Armando Trull/WAMUDhar Mann, 27, has been charged with defrauding the city of OaklandDhar Mann, a controversial young businessman who sought fame and fortune as an entrepreneur in the medical marijuan

Oaksterdam Supporters To Protest Federal Marijuana Raids 4/20

April 19th, 2012
California NORML"Obama Keep Your Promise"Cannabis advocates will mark their annual 4/20 holiday with a protest of the federal raids on medical marijuana in Oaksterdam.Demonstrators will gather at the

Stand With Richard Lee: Tell Obama to End the Medical Marijuana Raids

April 3rd, 2012

Richard Lee Speaking at a NORML Conference
Earlier this week, agents with the U.S. Marshals Service, the Drug Enforcement Administration and the Internal Revenue Service raided several properties owned by longtime marijuana law reform advocate Richard Lee. Richard has devoted over a million dollars of his own money and countless hours of his life to championing Proposition 19 and marijuana legalization in California, to say nothing of all the time and passion he has poured into helping revitalize his community of Downtown Oakland, can you give him just a minute of your time and sign his petition to President Obama?

Click here to sign

From Richard Lee:

On Monday, April 2, my school — Oaksterdam University in Oakland — was raided by the DEA, IRS, and US Marshals. Oaksterdam provides training to the medical cannabis industry, and is fully compliant with state and local law.

President Obama promised at the beginning of his administration to respect state medical marijuana laws. He has broken this promise time and time again — and the consequences have been devastating.

This was a senseless act of intimidation. But I’ve been an activist far too long to become intimidated — and with the majority of Americans and common sense on our side, I know this is a fight we can win.

With our government trillions in debt, why is our government using taxpayer dollars to come after me, Oaksterdam, and the thousands of patients who need medical marijuana just to get through the day?

Tell President Obama and the DEA: Enough is enough. Keep your campaign promise, and stop the raids on the medical cannabis industry!

Click here to sign!

Federal agents with DEA, IRS, raid marijuana trade school Oaksterdam University

April 2nd, 2012

WANTED: For spending $1.5 million to try to legalize marijuana and for providing truthful education about it.

OAKLAND – Federal agents swooped in Monday morning to search Oakland’s Oaksterdam University in Oakland, the state’s first cannabis industry training school.

Agents with the U.S. Marshals Service, the Drug Enforcement Administration and the Internal Revenue Service’s criminal investigation division are searching the university at the corner of 16th Street and Broadway, in the heart of the city’s widely recognized downtown cannabis-oriented district, authorities said.

The university has been cordoned off by yellow caution tape.

Arlette Lee, an IRS spokeswoman, said she could not say why the agents were there other than to confirm that they were serving a federal search warrant.

Read more:

[UPDATE!] You can view video from yesterday’s federal raid, coverage of today’s march and protest in San Francisco, and also read Richard Lee’s first public statement since the DEA and IRS took action against him here.]

Richard Lee, the founder of Oaksterdam University, was the man who poured $1.5 million of his own money into the Prop 19 effort in 2010 to legalize marijuana in California.  That effort garnered the greatest-ever support for statewide marijuana legalization at 46.5%.

Wall Street bankers looted and wrecked the economy? Eh, whaddaya gonna do? People are learning the truth about marijuana and its prohibition in there? Better send in federal agents right away! (Photo: Oaksterdam)

Oaksterdam was founded in November of 2007 to provide training for the caregivers and collectives providing cannabis medicine to California’s medical marijuana patients.  But rather than just establish a “grow school”, Richard Lee also seeded the curriculum with classes covering the entire cannabis industry, including how to address the political and legal impediments that prohibition of cannabis for healthy people imposes on getting medicine to sick people.

The recent “crackdown” by the four US Attorneys in California, which has included threatening letters to landlords of medical marijuana dispensaries as well as outright raids of longstanding, community-approved outlets like Berkeley Patients Group, has been devastating to Oaksterdam’s enrollment.

There is now no doubt in my mind that this is a full-court press by the Obama Administration to squelch the voices of legalization, retard the propagation of truth about marijuana, and stall our growing political momentum long enough for the campaign donors in Big Pharma to get cannabinoid pharmaceuticals through the FDA approval process.

Colorado and Washington – 2012 is THE year.  Failure to pass legalization this year gives the government four more years before they have to worry about serious attempts at legalization.  By then, a few more states will have passed medical marijuana laws without home grow.  By 2016, Sativex and other cannabinoid pharmaceuticals are brought to market.  Those states without home grow will then begin switching their state-run dispensary patients to Sativex.  States with home grow will be under great pressure to do the same.

[NORML Deputy Director Paul Armentano adds: I have tremendous personal respect for Richard Lee, having advocated along side with him in support of Prop. 19 -- the statewide initiative he boldly and generously spearheaded in 2010 -- and having lectured at Oaksterdam University, the groundbreaking educational facility he founded. On more than one occasion I ended my lectures at O.U. by highlighting the difference between changing public opinion and changing culture. Richard's activism -- opening the nation's first brick-and-mortar cannabis 'college,' bankrolling Proposition 19 which nearly succeeded in legalizing the adult use of marijuana in California, and revitalizing downtown Oakland -- fell into the latter category. He was changing the culture. And that is why the federal government and the Obama/Holder administration is trying to silence him today.]


Struggling Cities Turn To a Crop for Cash

February 13th, 2012

As the stubborn economic downturn has forced this city to take painful steps to balance its budget in recent years, it has increasingly turned to one of its newer industries to raise much-needed revenues: medical marijuana dispensaries.

The city has raised taxes on marijuana dispensaries several times in the past few years, and last year it collected $1.4 million in taxes from them — nearly 3 percent of all the business taxes it collected. Now Oakland plans to double the number of dispensaries it licenses, to eight from the current four, in the hopes that it can collect even more revenue.

“This is general fund revenue — it all goes into the melting pot,” said David McPherson, the city’s tax and revenue administrator. “When you’re making decisions about what to continue keeping or not, it goes into that decision process. If you don’t have that money, then you’re making other decisions about ‘Are we going to close the libraries on Monday?’ ‘Are you going to end up cutting a cop?’ ‘Are you not giving funds to our arts and things that help our kids?’ ”

Sometimes lost in the discussion of medical marijuana is the extent to which it has become a small but growing source of new tax collections for cities and states that have been struggling to balance their budgets for more than four years now.

Colorado Springs collected more than $700,000 in taxes from the medical marijuana industry in 2011. It is not a lot of money for a big city. But given the harsh steps the city has taken in recent years — in 2010 it shut off a third of its streetlights to save $1.2 million — every bit helps.

Denver collected more than $3.4 million last year from sales tax and application and license fees, according to preliminary figures. The State of Colorado collected $5 million in sales tax from medical marijuana businesses last year, more than twice what it collected the year before.

Taxing marijuana is a relatively new field, and cities and states are taking different approaches to raising revenues.

Maine decided that medical marijuana should be subjected to the state’s 5 percent sales tax — unless the marijuana is baked into brownies. In that case, it is taxed at a higher 7 percent rate that the state levies on prepared foods.

Oregon closed a budget gap last year in part by raising the annual fees it charges people with doctors’ notes to join the state’s medical marijuana program. In October, the state doubled the fee to $200 a year — with reduced fees available to people on food stamps — to raise an estimated $6.7 million a year to pay for other health programs.

Of course, some of the money raised must be used to administer the medical marijuana programs and, in some cases, to increase regulation of the industry.

Budget planners always deal in uncertainties like whether tax revenues will rebound or how much it will really cost to provide services. But projecting medical marijuana revenues adds other layers of complications, including whether the federal government will shut down the dispensaries that state and local governments have decided to allow.

After signaling in 2009 that it would not normally pursue groups providing marijuana to sick patients, the Justice Department has cracked down on dispensaries in a number of states in recent months. The Internal Revenue Service has targeted a number of dispensaries that pay federal taxes as well, arguing that they are not entitled to the regular business deductions they have claimed because they should be considered drug trafficking organizations.

It has made life complicated for cities.

“What we do know is the federal government has made it complicated and the state government has made it complicated and it all flows downhill to us,” said Mayor Chuck Reed of San Jose, Calif., which collects about $2.5 million in taxes from the 100 marijuana dispensaries that have opened in the city.

Here in Oakland, medical marijuana is booming. Just a few blocks from City Hall is Oaksterdam University, which offers training for people in the industry with classes in state and federal law, civics, legal business structures and various “methods of ingestion.”

The biggest dispensary in the city by far, Harborside Health Center, has 104,000 customers and employs 120 people, 90 percent of whom are from Oakland, in well-paying jobs with good benefits.

Its executive director, Stephen DeAngelo, helped lead the movement several years ago to have the city tax the marijuana industry. “At that time, the city was talking about closing down some really beloved institutions,” he said, adding that Oakland’s fiscal plight led the center to think about ways of helping the city. “What better way of doing that than with a tax?”

But when the city tripled the tax rate to 5 percent in 2010, he worried. “I thought 5 percent was a bit excessive,” Mr. DeAngelo said, but he added that the center was able to absorb the costs. Now, he said, the center is among the biggest taxpayers in Oakland.

Oakland will probably not be able to double its tax collections by doubling the number of dispensaries. Mr. McPherson, the city tax administrator, said that in many cases the same pool of medical marijuana users would simply be choosing from more places. But opening a dispensary near the Berkeley border, he said, might capture some of the Oakland residents who currently go to a dispensary in Berkeley.

Mr. McPherson said the city stood to reap more of what he called the “secondary benefits.”

“You’ve got accountants that are working for them, you’ve got all the security companies that are working for them, you have labs that are working for them, you have bakeries that are baking all the edibles, you have union employees that are getting great benefits, you have delivery services, hydroponic stores, doctors get some benefit,” he said. “It’s the secondary market that gains from this, and all of those pay business taxes to us.”

A version of this article appeared in print on February 12, 2012, on page A22 of the New York edition with the headline: Struggling Cities Turn to a Crop for Cash.

Source: New York Times (NY)
Author: Michael Cooper
Published: February 12, 2012
Copyright: 2012 The New York Times Company

Pot Smoking Not So Harmful To Lungs, Study Finds

January 11th, 2012

Smoking a joint from time to time won’t damage the lungs, even after years of drug use, according to a study led by UCSF researchers that disproves one of the major concerns about marijuana – that smoking it must be just as risky as lighting up a cigarette.

The study, results of which were published Tuesday in the Journal of the American Medical Association, found that the lung capacity of people who smoked marijuana was not diminished by regular toking, even among those who smoked once or twice a week.

Only heavy marijuana users – those who smoked 20 or more joints a month – saw a negative impact on the pulmonary system, but that level of marijuana use is unusual, researchers said. In fact, they said, it may be that marijuana smoke doesn’t affect lung function the way tobacco does simply because people don’t smoke as many joints as they do cigarettes.

The results should reassure doctors and patients who are considering using marijuana for medical care, primarily to ease pain and nausea, said Dr. Mark Pletcher, a UCSF epidemiologist and lead author of the study.

But that’s not to say that Pletcher or his colleagues are ready to give the all clear to anyone who wants to smoke pot.

‘Issue with Marijuana’

“This study shouldn’t be interpreted as marijuana is totally harmless,” said Dr. Stephen Sidney, a study author with Kaiser Northern California’s division of research in Oakland. “We don’t see marijuana having a big impact on lung function or lung disease. But it doesn’t mitigate the fact that we have an issue with marijuana, at least in terms of dependence on it.”

Smoking cigarettes has such dramatic, long-term health consequences – including emphysema and lung cancer – that doctors have long assumed that marijuana smoking, too, must be detrimental.
Heavy marijuana use may indeed turn out to be just as risky as cigarette smoking, but that will be tough to prove because so few people smoke as much pot as they do tobacco. And not all scientists are convinced that marijuana smoke is actually as deadly as cigarette smoke.

“No one would ever claim that drinking water has the same effect as drinking vodka, even though they’re both liquids and you’re ingesting them the same way,” said Amanda Reiman, a UC Berkeley lecturer and director of research at the Berkeley Patients Group, a medical marijuana dispensary. “But for some reason we have assumed that because we know the negative outcomes with cigarettes, inhaling any plant material is going to have the same outcomes.

“This study is challenging the preconceived notions we’ve had for some time about the dangers of smoking cannabis and the similarities to smoking tobacco,” she said.
Occasional users

For occasional users, smoking marijuana was actually associated with a small but statistically significant increase in lung capacity, according to the UCSF study. That increase wouldn’t be noticeable to the individual – and certainly shouldn’t be interpreted as a beneficial effect of smoking marijuana, scientists added – but it may be related to the deep breathing pot smokers use to draw the drug into their lungs.

The study looked at 5,115 men and women over a 20-year period, starting in 1985, who were part of a national clinical trial meant to look at heart disease risk in young adults. The smoking researchers used data collected on tobacco and marijuana use, along with regular tests of pulmonary function.
Pot and cigarettes

Study participants were just about as likely to smoke marijuana as cigarettes, and many participants smoked both. People who smoked cigarettes, however, were more likely to be heavy users – on average about eight cigarettes a day – than marijuana smokers, who lit up on average two or three times a month. The study lumped together all types of inhaled marijuana use, meaning researchers did not differentiate among those who smoked joints or pipes or any other implement.

The researchers noted that while most marijuana smokers may not experience long-term lung problems, they may still suffer from coughs and other temporary, relatively minor irritations to the throat and lungs.

Dr. Stephen Ruoss, a Stanford pulmonologist who was not involved with the study, was quick to note that while the results may show that smoking pot isn’t terrible for the lungs, that’s hardly a robust endorsement for getting stoned.

“If you inhale the smoke of a combustible organic material – either tobacco leaf or marijuana leaf – is that a good thing for your lungs? The safe answer is no,” Ruoss said. “The hunch is that the more you smoke, the greater the detrimental effect on your lung function. Even with marijuana.”
Longtime pot smoker

But Oakland resident La Wanda Martin, 44, said she’s always assumed that smoking marijuana was safer than smoking tobacco. She’s been smoking pot for more than 30 years, in part to treat back pain and anxiety. She is currently lighting up several joints a day, which she buys from Oaksterdam University, a cannabis industry training school.

“Cigarettes are worse to use,” Martin said. “When you buy from a cannabis club, you know what you’re getting. I don’t know what they put in those cigarettes.”

Source: San Francisco Chronicle (CA)
Author: Erin Allday, Chronicle Staff Writer
Published: Wednesday, January 11, 2012
Copyright: 2012 San Francisco Chronicle

IRS Claims Medical Marijuana Dispensary is Drug Trafficking Organization, Takes Taxes Anyway

October 6th, 2011

As part of the federal government’s escalating efforts to shut down the medical marijuana industry, the IRS is claiming that Harborside Health Center, an Oakland dispensary that is thought by many to represent the best practices in the industry, owes them roughly $2.5 million in back taxes. The reason for this is that during the audit, the IRS would not let Harborside deduct many of its business expenses.

Most of these expenses were for things that all other legitimate businesses are allowed to deduct, such as rent and payroll. They were, however, allowed to deduct the actual marijuana being given to patients. The reason for all this is Section 280E of the Internal Revenue Code, which basically allows the IRS to fully tax any group it considers a drug trafficking organization. This is mostly used to snare actual drug traffickers for tax evasion, much like the way Al Capone was finally arrested. Criminal kingpins are not known for filing taxes and reporting their illicit income.

The IRS claims that Harborside, and all other dispensaries, are criminal organizations, so they can’t make any of the deductions other businesses make. But they will still take the money. Many are worried that this will destroy the industry by making it impossible for most dispensaries to afford to stay in business.

MPP is currently pushing a pair of bills through Congress that would remove this threat to patients and providers, as well as allow banks to do business with dispensaries without fear of federal prosecution.

Please urge your representative to sponsor the Small Business Tax Equity Act of 2011 and the Small Business Banking Improvement Act of 2011.

While we’re waiting for Congress to act on these bills (and it may take a while), feel free to contact the IRS and tell them that tax-paying medical marijuana businesses are legitimate and should be treated as such. They are not drug dealers.

Here’s the number: 1-800-829-4933