9th Circuit Deals Blow to Oakland Medical Marijuana Program

The 9th US Circuit Court of Appeals in San Francisco on Aug. 20 rejected the city of Oakland’s intervention in the US Justice Department‘s effort to shut the Harborside Health Center medical marijuana dispensary, finding that the legal move steps on the federal government’s powers. In a unanimous three-judge ruling, the court acknowledged that Oakland had a right to sue, but said its arguments would undermine federal drug enforcement powers. The 9th Circuit was reviewing a 2013 lower court ruling tossing out Oakland’s suit. The suit argued that a federal shut-down of one of four city-approved dispensaries would harm Oakland’s interests and override California’s 1996 medical marijuana law.

US Magistrate Judge Maria-Elena James of California’s Northern District, who ruled against Oakland in February 2013, nonetheless put the federal forfeiture case against Harborside on hold while the 9th Circuit reviewed the issues—allowing the dispensary to continue to operate both in Oakland and at its smaller San Jose outlet. The new ruling could allow the feds to move against Harborside. But Harborside executive director Steve DeAngelo struck a defiantly optimistic tone in comments to the San Jose Mercury News: “This ruling is not going to have any real-life effect on Harborside or our patients in the foreseeable future. This is just one more step in litigation that’s been going on for several years, and we are expecting to continue for several more years unless the federal government decides to dismiss the case.”

Oakland city attorney Barbara Parker said she is considering whether to seek a review by the 9th Circuit’s full 11-judge panel, the first step before appealing to the US Supreme Court. “I was very pleased that the court agrees that city of Oakland will suffer significant grievous injury if Harborside closes down,” she told the Mercury News. “I’m perplexed by the court’s other finding that despite recognition that we will have this injury, there’s no remedy for it.”

US Attorney Melinda Haag moved to close Harborside two years ago, arguing that the cannabis “superstore” is so big that it was likely to sell to customers without a legitimate medical need. But since then, federal policy on medical marijuana has relaxed. Congress included a provision in December’s omnibus budget legislation—signed by President Barack Obama—that restricts the federal government from using tax-dollars to prosecute medical marijuana providers in states where it is legal. (Similar measures are likely to make it into the 2016 budget bill, while pending legislation would lift the federal ban on medical marijuana altogether.)

Harborside, serving over 100,000 patients and bringing in some $20 million annually, is the USA’s largest licensed cannabis dispensary. Cash-strapped Oakland says it collected more than $1.4 million in taxes from Harborside and the three other city-licensed dispensaries in 2012.