The Bay Area's medical cannabis industry is cautiously open for business this week, and is busy dispelling rumors of its demise. All told, exactly one Bay Area club has reportedly said it may close in response to the October 7 press conference by federal prosecutors who blasted medical marijuana. US Attorney Melinda Haag has reportedly threatened the landlord of an Oakland dispensary, along with at least four San Francisco landlords with forfeiture this month. The Divinity Tree in the Tenderloin said it may close. A similar round of saber rattling caused half the clubs in San Francisco to close in 2004.
But so far, many dispensary operators are reporting business as usual, while fact-checking what the feds are up to and urging patients to protest what watchers are calling a law enforcement PR stunt. "Patients are coming in really scared" said Harborside Health Center founder Stephen DeAngelo. "The top three rumors are: Harborside is going to close, all the dispensaries are going to close, and the feds are going to end safe access to cannabis in California.
"Our message is real clear: Harborside Health Center has no intention of closing," he continued. "We made a commitment with our patients when we opened five years ago."
The biggest club on the West Coast has a long legal fight ahead of it since the IRS disallowed its business deductions, slapping the nonprofit with $2.5 million in back taxes, DeAngelo said. Backed by a national legal fund, the fight against the IRS could take two years, he said. The plan is to pay one year of the two-year assessment, then take the government to federal court in front of a jury in San Francisco.
While a loss could ruin existing dispensary business models, a win could ratify the Harborside Health Center approach. "If a jury rules as a fact that Harborside Health Center and, by extension, other medical cannabis organizations are not drug trafficking organizations, we believe it could serve as a test case that could completely change the outlook regarding [dispensary tax law]," DeAngelo added.
Elsewhere in Oakland, the city continues to process applications for four more dispensaries at a time when, according to an October 21 report in the Bay Citizen, Coffee Shop Blue Sky's landlord has received a threatening letter from Haag. Coffeeshop Blue Sky's owner is Rich Lee, founder of Oaksterdam University and Proposition 19. Blue Sky remained open as of early this week.
In Berkeley, major dispensaries such as Berkeley Patients Group and BPCC were open. A Berkeley Patients Group receptionist said their medication lounge — singled out by federal authorities — was open as well, though patient verification procedures have been ratcheted up. BPCC officials said they were open and their landlord had not received one of the federal letters threatening California property owners with forfeiture this month.
In San Francisco, threatened dispensary Medithrive said it would soldier on, while popular clubs such as SPARC, the Green Door, the Vapor Room, Waterfall Wellness, and others remained open. The Green Door has tightened up its patient verification protocols, while SPARC spokesman Nicholas Smilgys said the club already operates to the letter of state law and has not changed any policies. "Patients have a lot of questions," he said. "They're more concerned than scared."
Officials from SPARC, along with several other clubs, have begun providing their patients with protest times and dates — including a large protest on October 25 at the W Hotel in response to President Obama's visit to San Francisco, and another on November 9 for the election.
On the other hand, "pot shops" in battleground California counties remain under heavy fire. In San Jose, patients are freaking out, not because of the federal actions but because of local opposition. San Jose is the home turf of the California Narcotics Officers Association. And dispensaries there are fighting an existential threat from the city council this week, said Matthew Witemyre, an organizer for the United Food and Commercial Workers labor union.
A group of dispensaries has just a few days left to turn in enough valid signatures to stop the city council from forcing all clubs to close, he said. "San Jose patients already feel like they are under attack."
Witemyre said he was unaware of any federal raids, but several threatening landlord letters have gone out in the area. Some clubs in San Jose have preemptively closed their doors, according to scattered reports. And regional medical marijuana business like edibles kitchens and Medi-Cone — makers of pre-rolled joints — are also down-shifting as clubs scale back on orders, Witemyre said.
With some one million patients and an estimated 2,000 clubs in California, the best the federal authorities can do, watchers say, is target the industry's biggest movers and shakers, while making an example of a few medical marijuana leaders and firing off threatening letters. The thousands of patients at state-legal, locally approved Bay Area clubs most likely won't be affected by the federal saber rattling.
Last week, Lee told Legalization Nation that the federal crackdown amounts to "rear-guard" action in the face of overwhelming opposition to the Drug War. "They want to drag it out as long as they can."
He noted that a recent Gallup poll found that 50 percent of Americans now support legalization of pot for recreational purposes — a first in US history. Popular opinion jumped 4 percent in a single year, he noted, possibly helped by the immense coverage of Prop 19 in 2010. Last week, the California Medical Association, representing 35,000 doctors, also came out in favor of legalization.
On October 20, California Attorney General Kamala Harris finally spoke up on the issue, releasing a statement urging federal officials to "focus their enforcement on 'significant traffickers of illegal drugs.'"
Witemyre called it a good first step. "But I think it's not enough, considering that if we had a national referendum, legalizing marijuana would beat Barack Obama."
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