Bloomberg News

Oakland Wins Ruling Halting U.S. Bid to Shut Pot Superstore (1)

July 03, 2013

The city of Oakland, California, won a ruling halting a U.S. effort to seize a building housing a medical marijuana dispensary while it appeals the dismissal of its own suit challenging a prosecutor’s bid to close the store.

U.S. Magistrate Judge Maria-Elena James said the government won’t be harmed if its bid to seize the building where Harborside Health Center operates is put on hold pending Oakland’s appeal.

“This is a matter of significant public interest,” James said in a ruling today. Oakland’s lawsuit challenges “federal action it believes is inappropriate and a threat to its citizens.”

The six-year-old dispensary, which has annual gross revenue of $20 million and offers more than 70 types of marijuana and cannabis concentrate such as hashish, is one of hundreds of such stores in California that have operated since voters approved the Compassionate Use Act in 1996. Oakland’s suit underscores a fight between cities that regulate medical pot sales and the U.S. government, which has moved to shutter some shops for violating federal drug laws.

Oakland sued to block closing of Harborside after U.S. prosecutors filed a forfeiture case to seize its building. Harborside also offers home delivery and product promotions.

Prosecutors call Harborside a “superstore” serving 100,000 customers in violation of U.S. laws. Oakland said it permitted pot sales after U.S. officials repeatedly promised not to interfere with sales that comply with state medical marijuana rules.

Public Safety

Closing the dispensary would send patients into the street to buy from dealers, harming public safety, the city said. Oakland sued under a 1946 law that lets courts review federal actions. James dismissed the case and Oakland appealed.

“This is a very significant victory,” Cedric Chao, Oakland’s attorney, said in an e-mailed statement. “It preserves the right of Oakland and its 400,000 residents to challenge the U.S. Department of Justice’s attempt to shut down the Harborside dispensary.”

Josh Eaton, a spokesman for U.S. Attorney Melinda Haag in San Francisco, who brought the forfeiture case, didn’t immediately respond to a request for comment on the ruling.

Jones said in her ruling that Oakland would be irreparably harmed if the city’s case is reinstated after the dispensary was closed.

The case is City of Oakland v. Eric Holder, 12-cv-5425, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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