Thursday, July 22, 2010
Politics, Profits Dividing Medical Cannabis Providers in Oakland
Regulation & Legislation David Downs — Thu, Jul 22, 2010 at 1:07 PM
A popular dispensary owner has found himself at odds with his long-time peers, city officials and former business associates at a time when Oakland has made an historic move to allow the country's first large-scale commercial medical cannabis cultivation farms.
Oakland wants to license four football-field sized indoor grows by January, 2011, and supply up to one-fifth of the state's medicinal pot, taxing the product to net tens of millions of dollars per year. A final reading of the proposed ordinance is scheduled for Tuesday, July 27.
But the cultivation permitting regime has illuminated stark rifts in Oakland's medical cannabis community, which outsiders think to be cohesive. Leading dispensary Harborside Health Center and owner Stephen DeAngelo spoke against the cultivation ordinance, alongside fellow Oakland dispensary the Purple Heart Patient Center. On the other side: Oaksterdam owner Richard Lee whose businesses include the Coffeshop Blue Sky dispensary, as well as other growers, and local landowner Jeff Wilcox — a former business associate of DeAngelo and Harborside's neighbor.
DeAngelo spoke on behalf of perhaps 250 local growers who supply Harborside and feel threatened by the rules, which would initially push growers into two camps: those under 96 square-feet that will not require a permit, and large football field-sized facilities which will need a permit.
DeAngelo said the Bay Area medical cannabis community is united on a fundamental level, and these skirmishes are limited to the shape of business to come.
“I think that the medical cannabis community is united on all of our core issues. Now the question is no longer, 'Is cannabis going to be legal?' It's changed to, 'How is cannabis going to be legal?'”
The differences can be wide. As traditional market forces begin to exert themselves on the once-marginalized illicit drug, a spectrum of reformers has emerged, from pragmatic capitalists on one end, to idealistic, longtime radicals on another. This spread is evident in the once-close relationship between Wilcox and DeAngelo who are now estranged. The two worked together for months devising a plan for large commercial grows in Oakland, but had a falling out over control of the facility and have begun airing their differences in public.
Harborside Health Center has possibly the biggest pot club on the West Coast and wants to get into the cultivation side of the industry, but lacks the space on-site at its waterfront location. Wilcox has acres and acres of light industrial-zoned land near Harborside and wants to get into growing legal medical cannabis.
DeAngelo says he can't say for sure why the two parted ways late last year. Wilcox has said that DeAngelo wanted too much control over the enterprise, while he wants to allow multitudes to come in and work his space for a fee.
“I was like no, no, no this is a regional thing,” Wilcox says.
DeAngelo's push for control of cultivation at Wilcox's site came from two assumptions which are now to be issues of debate. The first one was that state law requires grows to be associated with specific patients in collectives or cooperatives.
Simply put, growers need to be able to produce a patient list to justify their grows under Prop 215 and SB 420. Some enforcement in California is so strict, growers put individual labels on each plant stating who the plant is being grown for. Harborside has such a patient list, but Wilcox might not need it after all.
Oakland has taken state law and interpreted it quite liberally over the years, DeAngelo says. Permitting big grows without the legal paperwork proving who the plants are for would be a cutting-edge interpretation of state law. Some experts, including Dale Gieringer at NORML, say Oakland would violate both federal and state law at that point, thereby inviting a DEA raid. Similar raids of permitted city grows in Mendocino have already occurred.
“It's absolutely critical we be in strict compliance with state law. Cultivation on this magnitude is a huge challenge to the DEA. They will be all over this, looking at it very closely and if they can justify a departure from Obama's policy they will go after Oakland,” DeAngelo says.
DeAngelo's second assumption: that the city would allow dispensaries to get large-scale cultivation permits. But that is now unclear. Currently, dispensaries have a permit to cultivate on-site, but none have the space to do so.
Councilmember Larry Reid, a principle architect of the cultivation ordinance, has adamantly stated no dispensaries shall get cultivation permits, claiming he wants to prevent a “monopoly” on the industry. Other councilmember have disagreed with Reid.
“I can't imagine what justification there could possibly be for prohibiting a non-profit organization of patients for getting a cultivation permit,” DeAngelo says.
Council consensus on dispensaries getting cultivating permits remains unclear; as well as exactly how or if the city will justify large-scale cultivation under state law. The city might choose to deal with both issues and many, many others through administrative regulations developed in the months ahead.
Comments (4)
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you guy's are as dumb as stevie D thinks you are. he/his companies own 2 of those big grows. He said he doesn't want them because he knew if they came into realization he'd own 50% of them. He owns clean green, so there's another group of growers that have to bow to him. His organization takes 5% of all profit from all organizations that open up under his guidance and charges HUGE amounts of money for small things (ex. his lawyer charges $1000 if he has to drive somewhere to meet you). He owns most of the companies that provide things to Harborside. (ex if you own the company that provides all the paper, cardboard, management, security to harborside etc...you would be making lots of profit off of a non-profit). Even if all Harborsides management DID release what they make (big difference between a "not for profit" and a "non profit") it would still just be the tip of the iceberg. Honestly the movement is better off without steve De angelo and his cronies....they just want to make profit off of the ignorance of the average stoner.
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All of the players including the Oakland Councilpersons need to familiarize themselves with 21USC 841,846 & 848. They should also become knowledgeable of the Federal Sentencing Guidlines. The amounts being discussed with new Oakland permits would surely bring recommendations for sentences at the top of guidline schedule (think 360 months). I am sure the US Attorney could already bring a successful 846 indictment should he be so disposed. All he really needs to do to nip this in the bud (pun intended) is to send notification letters to the involved parties advising of the elements of the crimes ennumerated in the above cited statutes and the actions they have thus far taken which meet the statutory definition (with case law citations) of those elements. Various government officials
need also be aware of an additional thorny issuse..Misprision
of a Federal Felony. Of course, you only have to do a 3 year bit if your convicted of misprision. It appears a whole bunch of folks would qualify as a result of association with this supposed gold rush. Sweet dreams to the exposees!
Maybe the real reason Lee is pushing so hard is that under CA laws a not-for-profit dispensary MUST put ALL profits BACK into the business or risk DEA/IRS raids & eventually closure if found guilty. Lee probably wants to sell Oaksterdam to put more money into Prop.19. He has funded most of this proposition. I feel the same as skj73 & thank them for speaking up at the Oakland hearing. Oakland also has forgotten that Alameda county overrules city ordinances. Therefore, whatever Alameda County has set as grow limits for personal usage trumps whatever Oakland City Council wants.
Should they continue in this fashion, Oakland will lose millions in revenue to SF & Berkeley dispensaries. For those cities know how to deal w/medical marijuana & the true patients that they serve.
Uh...I hate to break the news to everyone, but Prop 19 has NOT YET been voted upon. Legalization is not as "close" as people think. I'm very shocked, but simultaneously happy, to see DeAngelo speaking his mind. I too gave testimony this week before the city council in opposition - but on pure principle: Prop 19 (and more importantly action item S-10 from this week's council meeting) does not use explicit, clear, and transparent language. It gives carte blanche power to the counties and because of how it is written, it leaves too much room for corruption in the regulation process (should legalization occur in November). If the voting public at large, but specifically in California, did not learn the hard lesson about allowing special interest groups interfere with the legislative process from the recent Wall Street bailout situation in Washington, DC, then they need to educate themselves quickly. The current situation before the city council here in Oakland is NO DIFFERENT.
What do I mean? (for those who don't know the details of the Wall St bailout...) - Congress voted against supporting the Wall Street bailout by doing their job: they brought their constituents' decision to the Hill and did what the voters told them to do: not bail out Wall Street with federal tax revenues. They then made history by WALKING OFF THE HILL. So what happened? The head of Treasury at that time Paulson (previous CEO at Goldman Sachs) and his Bush-appointed treasury department (made up by a majority of ex-Goldman Sachs executives) gave Congress and the American public the "finger" by working out a back-room deal...and regardless of all due process in Congress were shot down. No due process was allowed - no committee reviews or hearings were allowed. A special interest campaign financial and political bargaining to get what it wanted at all costs.
Well guess what Oakland voters, that's the SAME thing you're witnessing right now. You have 4 club owners trying to compete for only 4 permits being considered by the city. They are positioning themselves in anticipation of November's vote with unjust cause. They are dangling the proverbial "carrot" before the city council's eyes - because as we all know too well this city is in dire straights in both economical and financial ways. As I asked Mr. Mayor and the chairpersons on the council earlier this week, please do NOT allow pressure from special-interest groups (no matter who they are) to impede in the proper, legal course of due process.
The fact that the other owners are trying to create an "industrial park of cannabis" shows they're ignoring the most fundamental aspect of cultivation: this plant does NOT need indoor grows to be grown correctly and in a controlled environment. I'd be more willing to support what Wilcox and Lee are trying to do if they'd stop trying to niche the market with their best intentions at heart. Don't be fooled - they don't care about patients who use this plant medicinally. They just want to make it legal to make even more profits (which not-for-profits shouldn't be making in the first place).
The fact that they're trying to push this agenda PRIOR to the vote in November shows there is "something" not surfaced in the public's eye just yet. What it is, I'm not going to speculate. But think about it people (especially medical users of this plant) - if Lee is SO into supporting patients and their needs, why is he currently trying to sell Oaksterdam University? Also, for those of you who've gone through the OU classes, why do you think they are teaching non-organic, indoor industry-specific techniques? If they really cared about helping patients (any of the clubs and so-called "patient related" businesses) they'd offer proper, organic methods of control and growth (yes I know they do teach basic organics, but every product line the support in their curriculum is a synthetic brand).
I am a patient. I can supply my own needs with my private, small garden. I don't care if the club owners get their permits from Oakland or not. What I care about is seeing all these people saying they are "here for the patients" and yet the patients are not being considered in their current initiatives.
Peace.
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