Here's How Oakland Thinks it Can Stop The U.S. From Shutting Pot Dispensaries

In a lawsuit filed Wednesday, the cash-poor city of Oakland is trying to make the mighty United States of America stop enforcing its laws against the sale of marijuana. We wondered on what basis the city expects to prevail.

The answer comes from the legal concept estoppel, which in plain English means something like "a promise is a promise."

The city is arguing that U.S. officials -- including President Barack Obama -- said they would not stop dispensaries from selling pot if the dispensaries comply with state and local law. So Oakland invested a lot of money and staff time in to setting up a regulatory system for the dispensaries. And now the feds are legally obligated to keep their word and leave these pot sellers alone, Oakland officials say.

"We’re concerned that the government through its action and inaction caused the city to rely on the fact that we could proceed to dedicate the resources that we did to set up this dispensary system," Oakland City Attorney Parker told us.

On Oct. 19, 2009, U.S. Attorney General Eric Holder announced guidelines that his department would use in enforcing the U.S. laws making marijuana illegal:

As a general matter, pursuit of these priorities should not focus federal resources in your States on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.

But the government continued to prosecute some cases, and in 2011 began a series of high-profile raids and legal actions against large dispensaries, including some of the best-known marijuana businesses in Oakland.

On March 15, Melinda Haag, U.S. Attorney for Northern California, told KQED's Michael Montgomery that her office was flooded with complaints about marijuana dispensaries, and that the Oct. 19 memo didn't mean marijuana that comply with state and local law would not be prosecuted. She said federal agents would focus on marijuana businesses close to schools and other places children gather.

On July 11, workers arrived at Harborside Health Center in downtown Oakland -- which is billed as the largest pot dispensary in the world, but is not near a children's school -- to find notices taped to the door saying that the U.S. government had filed suit to seize the building.

The change in policy is hurting Oakland in several ways, Parker told us. Crime related to marijuana has dropped since regulated dispensaries opened up, she said. “That’s my understanding, that now that people can buy this safely and affordably through this regulated dispensary process we don’t have the crime that would be associated with them attempting to do the same thing on the illegal market,” she said.

In addition, the city is harmed because patients who need marijuana won’t be able to get it safely, she said. “We think it is vital for this continue, otherwise these patients would be left to their own devices to buy this vital medicine on the black market, which would endanger their lives.”

The city made a big investment in regulating marijuana, said Cedric Chao, who is acting as outside counsel to the city on the lawsuit. The city requires dispensaries to submit business plans, submit to audits and background checks, hire security, install lighting and cameras in parking lots, among other regulations. The dispensaries even have to furnish samples of marijuana to outside laboratories that verify the quality, he said.

The city expects to collect $1.4 million in taxes from dispensaries in 2012, said Chao, and loss of this revenue is another way in which it would be harmed by shuttering them.

Another legal basis for the lawsuit is the city’s claim that the statute of limitation has expired for the prosecution. Prosecutors must act within five years of the time they become aware of a crime, said Chao.

The city is asking Judge Maria Elena James of the U.S. District Court for Northern California to stop the federal government from shutting dispensaries that comply with the law. It is not seeking damages.

The City Council authorized the lawsuit last week, and Parker filed it Wednesday. The first court date, a case management conference, is scheduled for Jan. 10 2013. The federal government has 60 days to respond, said Chao.

Calls to U.S. Northern California Attorney Melinda Haag’s office, and to the Department of Justice, were not returned.

Oakland has not been in touch with any other local governments considering any similar actions, Parker said.

But Kevin A. Sabet, a former advisor to the Obama administration drug policy director Gil Kerlikowske told Reuters that Oakland's marijuana policy is misguided:

This lawsuit is just the latest bizarre twist in California's laughable medical marijuana program, a system where over 95% of users have no life threatening illness. If Oakland really cared about getting marijuana's medical value to the truly sick and dying, they would be applying for research studies to explore the potential medical benefit of marijuana's components for those with cancer pain or a terminal illness, as called for by the Institute of Medicine and American Medical Association. The current system, where the average user is a 32-year-old male with a history of drug abuse and no chronic illness is a sad joke.