Feds Target Harborside Dispensary For Closure

DeAngelo claims the Harborside is not in imminent danger of closing, but this latest aggressive federal action comes after last year’s IRS audit that resulted in a $2.4M tax bill for the club’s owners. The Fed claims the Harborside is a drug trafficking organization, citing an obscure tax code named 280e, and say the medical marijuana dispensary can not claim common business tax deductions.

Another Bay Area casualty of the crackdown is San Francisco’s Vapor Room, which is set to close at the end of the month. The Vapor Room, a Haight Street mainstay since 2004, is going away because U.S. Attorney Melinda Haag says the collective is too close to the Duboce Park playground.

The reason for Harborside’s closure isn’t its proximity to any schools or parks, it’s that Haag claims the club is too large and as a result is “likely” to be violating state law, but she hasn’t exactly stated which law.

Haag was also able to successfully close down the Berkeley Patient’s Group back in April citing an array of federal law violations including the fact that the club was within 1,000 feet of two schools: The Center for Early Intervention on Deafness and Cole Bilingual de Berkeley, a French bilingual grade school.

The attacks don’t stop there, Federal Marshals raided Oaksterdam University, a cannabis college aka medical marijuana training school at the epicenter of the marijuana movement in Oakland, on April 2nd. The University was founded by activist Richard Lee who funded Prop 19, the 2010 California ballot measure that nearly legalized marijuana. Richard Lee was the target of the raid, was detained in his home before it took place, and was freed later that day. Lee’s CoffeeShop Blue Sky, his medical marijuana dispensary also in Oaksterdam, was raided as well. Later that day the Oaksterdam University Gift Shop, which does not sell marijuana, but T-shirts, rolling papers and the like, was also raided.

The intense local crackdown is making it difficult for qualified Bay Area patients to obtain marijuana for medical use. Recently dispensaries in California have been forbidden credit services by banks, making it even more difficult for patients to obtain their meds and pushing many into the black market.

Since the U.S. Attorney announcement, more than 400 dispensaries have shut down in California, mostly from the fear of federal criminal prosecution or asset forfeiture. At least 300 letters were sent to property owners around the state, threatening federal action if they didn’t evict their dispensary tenants. However, only about half a dozen such actions have been taken, the most recent is this action against the Harborside.

Thousands of jobs up and down the Golden State have been lost as a result of the crackdown. The Harborside employs more than 100 people and is Oakland’s second largest retail tax payer. Last year, the dispensary paid combined taxes in excess of $3 million, over a million dollars of which went directly to the City of Oakland. Should Harborside be forced to close its doors, tens of thousands of patients will be forced to obtain their medicine from the black market. Meanwhile, studies have shown that the medical marijuana industry generates upwards of $100 million in tax revenue for California each year, and a recent Gallup poll has found a majority of voters favor legalizing WEED for both recreational and medicinal use.

This outlandish attack against the marijuana industry in California harms patients by obviously making access to their medicine much more difficult and it harms every single person in the state by robbing them of the benefits of such a huge pool of tax revenue.

“Our fight may be long, but it is just,” says DeAngelo, “and in the end we shall be victorious. We look forward to being there with you when that great day comes.” Harborside patients can help by providing their e-mail addresses, which will enable the club and it’s managers to send updates, and if necessary action alerts.

Take a look at the informative Harborside Press Conference from on July 12, 2012.