Thursday, August 5, 2010

Oakland council opts for tiered medical pot tax increase

OAKLAND — After two hours of pitched public comment and council deliberation, Oakland City Council members decided to table a proposal that could have brought in up to $28 million through a medical marijuana tax increase.

Instead, they opted for a tiered tax rate based on a last-minute proposal by at-large Councilmember Rebecca Kaplan. She announced the new plan Thursday during a special City Council meeting.

The new plan includes a 2.5 percent tax on medicinal marijuana dispensaries, putting Oakland's tax in line with Berkeley's.

Oakland's tax would be as much as 8 percent on cultivators, allowing the city to capitalize on new rules approved by the council just days ago allowing large-scale medical marijuana cultivation.

The city also would levy up to a 10 percent tax rate on facilities that sell marijuana for recreational use if California voters in November pass a statewide initiative to legalize marijuana.

The rate hikes would not be retroactive.

Kaplan justified the different rates between growers and sellers, saying other industries are taxed differently based on whether they are retail- or production-related.

The original plan, an increase of up to 12 percent, faced hot opposition from moderate-size dispensary operators and growers. Steve Deangelo, executive director of Harborbay Health Center — the largest dispensary in California — warned that the plan would force Oakland dispensaries and growers to close down, taking potential revenue with them.

He refused to disclose how much the nonprofit dispensary pays its highest-earning worker.

The council will consider the new plan Monday during a special meeting scheduled for 4 p.m.

The tax was one of seven aimed at boosting revenue to the cash-strapped city, which is facing what could be a $50 million budget gap next year.

Council members stopped short of putting all the measures, some of which were reworked during the special City Council meeting, on the November ballot.

A set of telephone taxes faced little opposition. But there was little support for a quarter-cent sales tax hike that would bring the rate to 10 percent.

Equally unpopular was an expanded utility tax that would raise an estimated $7.6 million by taxing garbage collection and water use.

The council deadlocked over a measure aimed at allowing the city to collect a special Measure Y public safety tax worth $20 million, even though the number of police officers are now below the 739 minimum.

In addition, the council voted to change a proposal to amend the city's Just Cause laws before deciding whether it should go before voters.

Pot dispensary owner says police seized profits

COLORADO SPRINGS - The owner of a medical marijuana dispensary plans to sue Colorado Springs police, alleging they illegally seized $13,000 in profits from his car.

Doctor's Orders co-owner Robert Pooler has filed a notice of his intent to sue. He plans to seek $120,000 in damages.

Pooler says police searched his car after he was involved in a near collision and found the money in a bank deposit bag.

Pooler's lawyer says he was moving the money to a new bank. Sean McAllister says many national banks have been closing dispensary accounts to avoid moving marijuana money across state lines, forcing owners to move accounts.

Pooler wasn't arrested, but McAllister says police say he's being investigated for money laundering. Police aren't commenting.

Wednesday, August 4, 2010

Proposed 'One Love' dispensary gets none in City of Folsom

The City of Folsom has no love for a proposed One Love Wellness Center.

The suburban Sacramento city is aggressively pursuing a lawsuit ( to keep the marijuana dispensary out of town, even after backers of the cannabis club announced they have given up.

But Folsom City Attorney Bruce Cline said the city had cause for suspicion after three men applied for a city license to open up a "medical supplies" business.

In court papers (, Fernando Robles of Sacramento said he and partners Salvador Molina and Tej Baath later directly approached Folsom officials and said they wanted to open a dispensary in town.

Informed that the city had an outright ban against pot shops, Robles said: "I did argue that the city was not following California law regarding medical marijuana, and I felt that under California law we could open our dispensary and challenge the city ordinance."

That was enough to send the city to court. A recent lawsuit, seeking a restraining order banning One Love from opening, said operation of a marijuana outlet in Folsom would be a public nuisance - "for which harm to the city and community is presumed."

"By defendant One Love's own admissions and action, the likelihood of a nuisance ... occurring is real and substantial," the city suit charged. "Representatives (for the proposed dispensary) have told the city attorney that they have obtained a location for the operations ... within the city, though refusing to disclose the location, and that they intend to open."

In court papers last week, Robles said: "After considering or options, we chose not to open a dispensary in the City of Folsom and took no further steps to do so or challenge the city."

But Folsom is pushing on with its suit to keep One Love out of town. A Sacramento Superior Court judge set a hearing on the matter for July 26.

Meanwhile, there is another One Love Wellness Center that is not at all happy with the Folsom controversy.

Lino Catabran, a board member for the dispensary on El Camino Avenue in Sacramento, said it has no tie to the attempted Folsom venture.

"I'm not trying to open a dispensary there. We've had a problem...with someone trying to infringe on our name."

Pot legalization proposal most potent among 10 measures on November ballot

Besides choosing a U.S. senator, a governor and various state and local representatives, Californians will go to the polls this November to vote on 10 new ballot measures.

Proposition 19 carries the biggest buzz because it calls for the legalization of marijuana.

The initiative would have the state regulate the drug—as it does with alcohol and tobacco— by permitting taxed sales to anyone who is 21 or older.

According to the Board of Equalization, the state’s marijuana crop is worth $14 billion a year and could generate some $1 billion in taxes if sales are made legal. A similar measure to decriminalize pot, also called Prop. 19, made the ballot in 1972, but failed by a wide margin.

The measure would provide much-needed revenue for the cash-strapped state and save millions in judicial costs, proponents say. But James Bozajian, a Calabasas City Council member, said the decriminalization of pot would not reduce prosecution and incarceration costs because few people go to jail for breaking marijuana laws.

Bozajian, a deputy district attorney for Los Angeles County, opposes the new measure and said it is unlikely to pass because of heavy opposition from the state’s public safety agencies.

Capt. Joe Stephen of the Lost Hills Sheriff’s Station said the law enforcement community opposes legalization because of the dangers associated with impaired driving.

Also, the sheriff said, “It would change the way we do business. Right now we can go into cars if we smell the presence of marijuana, but it would take away that right for us.”

While Moorpark City Councilmember Roseann Mikos is hesitant about legalizing pot, she said the measure might help rid the state of dangerous drug cartels and protect natural resources.

“We have a serious problem in state parks and national forests with illegal marijuana being grown in those areas. I would like to think that if this were to pass, it would reduce such illegal activity,” Mikos said.

Mary Ficalora, a teacher who lives in Agoura Hills, said she supports Prop. 19 because legalization would give young people a renewed deference for the law.

“I don’t endorse marijuana smoking for young people, but I do endorse a rational legal system that understands personal choices,” she said.

“We need to clarify the law to respect the rights of individuals because right now it takes away our right to choose for ourselves,” Ficalora said.

Herbert Gooch, a professor at California Lutheran University, favors the notion of tolerance but says he won’t endorse the measure because it might encourage new marijuana use.

“Given our free enterprise economy, the results would likely be a new and growing industry dedicated to creating ever greater demand,” Gooch said.

Proposition 22

Prop. 22 is an initiative placed on the ballot by an alliance of local government groups to forbid the state from taking local government, transit and transportation funds.

“We felt this initiative is necessary to close the loophole so the state can’t steal from us anymore,” said Simi Councilmember Glen Becerra, who pointed out that Simi Valley lost more than $6.8 million to the state this year.

Most of the money taken from local cities came out of redevelopment funds that had been set aside to create jobs and rebuild the infrastructure, he said.

Propositions 25 and 26

Hoping to reduce the annual gridlock in Sacramento, Prop. 25 would allow the Legislature to pass the state budget with a simple majority rather than the existing two-thirds majority requirement.

Under the proposal, if state officials fail to pass a budget by June 15, representatives would have to forfeit their salaries and expenses until a package is passed.

Gooch said he supports the amendment because it would pressure legislators to reach an agreement on the budget, while keeping in place the supermajority (two-thirds vote) needed to raise taxes.

Becerra said the two-thirds majority for the state budget should stay in effect because it forces elected officials to compromise.

“If left unchecked, the Democratic majority would put the burden back on businesses and individuals who are already overtaxed with high taxes and fees,” Becerra said.

Prop. 26 increases the vote requirement to two-thirds for certain fees, levies, charges and taxes that can be enacted by a simple majority vote under existing rules.

Water, cars, environment

and redistricting

Proposition 18 would allow the state to borrow $11.1 billion to overhaul its aging water delivery system. Opponents worry about plunging the state further into debt.

Proposition 21 proposes to raise the vehicle license fee by $18 to provide steady income for California’s state parks.

Proposition 23—aimed at putting strict environmental laws on the sideline until the economy improves— would suspend new air pollution laws that require major polluters to report and reduce greenhouse gas emissions until unemployment drops below 5.5 percent for four consecutive quarters.

Proposition 24 would repeal a series of corporate tax breaks approved by the Legislature in 2009.

The ballot also includes two measures affecting reapportionment and the redrawing of political boundaries.

Proposition 20 would take the power to craft new Congressional districts away from the Legislature and give it to an independent commission. The 14-member commission was created in 2008 to craft boundary maps for state Assembly and Senate seats.

Proposition 27 is the flip side of Prop. 20. It would abolish the independent commission and return authority to the Legislature.

Tuesday, August 3, 2010

Judge sides with Gilroy in pot club ruling

A Superior Court judge on Tuesday upheld the City of Gilroy's decision to prohibit medical marijuana dispensaries within the city and determined the city's sole nonmobile dispensary is operating illegally.

In an eight-page court order, Judge Kevin McKenney granted the city a "summary judgment," paving the way for the city to issue an injunction to shut down MediLeaf, which has been open in west Gilroy for about eight months.

"Since it is undisputed that MediLeaf did not secure a license or permit before commencing the operation of the medical marijuana dispensary at the subject property, it necessarily violated the Municipal Code," McKenney wrote. "As such the unlawful medical marijuana dispensary may be enjoined."

Jim Roberts, the dispensary's attorney, said MediLeaf plans to appeal the case.

"Obviously, we're clearly disappointed in the result," Roberts said.

Normally, an injunction could be granted within two to three days of a summary judgment, said Andy Faber, who is representing the city of Gilroy in its lawsuit against MediLeaf. However, he did not want to speculate what would happen in this case.

Councilman Perry Woodward, who is an attorney, anticipated a flurry of legal activity within the next 30 to 40 days as the courts aim to determine whether MediLeaf can remain open during the interim period.

"Now's where the fun begins," Woodward said.

MediLeaf opened Nov. 9 without a business license at 1321 First St. in the same shopping center as Togo's and First Street Coffee Exchange after the City Council rejected an ordinance to regulate such operations.

Dispensary directors Neil Forrest and Batzi and Patricia Kuburovich have maintained the dispensary uses a not-for-profit model and therefore does not require a business license. However, McKenney stated in his order that city code requires nonprofits to obtain the city's permission to operate.

"A contrary interpretation that a nonprofit organization can commence the operation of any business or activity without the city's permission would be unworkable and unreasonable," he wrote.

MediLeaf directors could not be reached for comment Wednesday, and it was unclear whether they planned to close the dispensary if an injunction were granted.

Depending upon the type of injunction the judge approves, the dispensary may be able to legally remain open pending an appeals process, Woodward said. It is unclear according to the court order on whether the judge would allow the dispensary to continue to run if that were to happen.

Woodward anticipated that MediLeaf would seek to keep its doors open.

McKenney listened to Faber and Roberts make their case for their respective clients July 1. Previously, Superior Court Judge Kevin Murphy had allowed MediLeaf to remain open while litigation was pending, rejecting the city's request for a preliminary junction on Dec. 15.

At the time, Murphy said the dispensary would not cause "irreparable harm" by staying open. He also said it was not clear whether the city would prevail when the matter goes to trial. Finally, he said Gilroy's City Council committed a Brown Act violation when it approved a resolution in a Nov. 16 closed session that allowed city attorneys to take legal action against the dispensary. The council corrected that violation in December by approving the resolution in open session.

McKenney did not bring up any of Murphy's objections when he deliberated on the case July 1.

City Administrator Tom Haglund has said the city spent $102,861 through May on the litigation against MediLeaf. However, that was before the July 1 hearing.

Mayor Al Pinheiro, who wants to continue the litigation as a matter of principle to make sure the city's laws are upheld, said the council will soon get debriefed on next steps the city can take regarding litigation. He said he was glad the courts finally agreed with the council's position.

"Obviously, as one of people that voted to go ahead and fight this thing, I'm happy about it, but we'll see what the next steps are," Pinheiro said. "We'll see if there's light at the end of the tunnel."

Jonathan Partridge is a staff writer for the Gilroy Dispatch.

Politics, Profits Dividing Medical Cannabis Providers in Oakland

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.

Monday, August 2, 2010

Who Is to Blame for the DEA's Medical Marijuana Raids?

Yesterday half a dozen drug policy reform groups asked President Obama to withdraw his nomination of Michele Leonhart to head the DEA, citing her continued enthusiasm for raids on medical marijuana suppliers as the agency's acting administrator. "Under Leonhart’s leadership," says the joint statement by the National Organization for the Reform of Marijuana Laws, California NORML, the Marijuana Policy Project, the Drug Policy Alliance, Law Enforcement Against Prohibition, and Students for Sensible Drug Policy, "the DEA has staged medical marijuana raids in apparent disregard of Attorney General Eric Holder's directive to respect state medical marijuana laws." As an example, the statement cites a recent raid on Mendocino County, California, grower Joy Greenfield, who "paid more than $1,000 for a permit to cultivate 99 plants in a collective garden that had been inspected and approved by the local sheriff." When told that Greenfield had approval from local law enforcement, the DEA agent in charge of the raid reportedly replied, "I don't care what the sheriff says." NORML et al. argue that "the DEA's conduct is inconsistent with an October 2009 Department of Justice memo directing officials not to arrest individuals 'whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.'"

Far be it from me to defend Leonhart, but her raids are not necessarily inconsistent with the DOJ's policy, which (as I've noted before) leaves lots of wiggle room for continued raids, seizures, arrests, and prosecutions. If there is any disagreement at all about the meaning of the relevant statutes, the DOJ can (and does) argue that growers and distributors are not "in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana." In California, for example, local officials continue to argue with each other and with state officials about issues such as the definition of a patient "collective" (or "cooperative"), what kind of cultivation is permitted, and whether over-the-counter sales are legal. So while Mendocino County's sheriff may have been satisfied that Joy Greenfield was complying with state law, officials in other jurisdictions might have taken a different view. Even if every law enforcement official in California were of one mind about the requirements for marijuana cultivation, the DOJ could still choose to interpret state law differently. It is not even clear that the DOJ would defer to the California Supreme Court's interpretation of the law.

Like I said: lots of wiggle room. And you can't blame Leonhart for that. It was Holder who formulated the new policy, and it was President Obama who let him do it, despite his repeated campaign promises to leave medical marijuana patients and their suppliers alone. The definitive test of whether anything has changed will be in jurisdictions such as Maine, Rhode Island, New Jersey, and the District of Columbia, which have laws that explicitly authorize and regulate the production and distribution of medical marijuana. In Colorado, which had a law that, like California's, left crucial issues related to cultivation and sale unresolved, the state legislature recently enacted new regulations that clarify the law's requirements. If the DEA nevertheless continues to raid medical marijuana suppliers in Colorado, including dispensaries that are licensed, regulated, and taxed by the government, Obama's bad faith will be clear and unambiguous.

Addendum: In addition to the July 7 raid on Joy Greenfield, medical marijuana activists are protesting a July 6 raid on John Roberts and Stephanie Whisman in Thomas Township, Michigan. Like California, Michigan allows "primary caregivers" to help patients by growing marijuana for them. Unlike California, where the state Supreme Court has said a primary caregiver must be substantially involved in a patient's life (beyond supplying him with marijuana), Michigan defines a primary caregiver simply as someone "who has agreed to assist with a patient's medical use of marihuana." According to Americans for Safe Access, Roberts and Whisman (who are engaged) were both approved as caregivers by the state Department of Community Health. They said they were each caring for five patients, which is the maximum allowed. ASA says they were "well below the legal limit" for Michigan caregivers, which is 12 plants plus two and a half ounces of "usable marihuana" for "each registered qualifying patient." The DEA's basis for claiming they were not complying with state law is unclear.

Timberwolves' president fined for remarks on Beasley's marijuana habit

Sports Network - The NBA on Friday fined Minnesota Timberwolves president of basketball operations David Kahn $50,000 for his recent remarks about forward Michael Beasley, for whom the team recently traded.

In a radio interview Thursday, Kahn spoke about Beasley's marijuana use in Miami, reasoning that it hampered his play with the Heat. He added that he spoke to Beasley about discontinuing his marijuana use with the Timberwolves, which would help him become a better player.

In the interview, Kahn said Beasley was "a very young and immature kid who smoked too much marijuana" during his tenure with the Heat.

In general, Kahn has been complimentary of Beasley, including comments made at his introductory press conference in which he said Beasley "has a chance to become one of our leaders."

The Timberwolves recently acquired Beasley, the second overall pick of the 2008 draft, from Miami, which was looking to clear cap space after signing Dwyane Wade, LeBron James and Chris Bosh to long-term contracts.

The Timberwolves organization was also fined a separate $50,000 for the remarks.,0,7813833.story