City of Oakland's Challenge to Harborside Eviction Rejected by Court

A U.S. magistrate has rejected the city of Oakland's attempt to throw a legal roadblock into the forced closure of the Harborside marijuana dispensary. The U.S. Attorney for the Northern District of California is threatening Harborside's landlord with forfeiture of the property, and Oakland had filed suit to block it.

U.S. Magistrate Maria-Elena James threw out the city's challenge on grounds it did not have standing in the case. The challenge of Harborside itself, however, has not been ruled on yet.

“I'm disappointed by today’s decision but it doesn’t really change the Harborside case," Harborside owner Steve DeAngelo told me today. "Harborside will remain open. We still intend to go to trial and we will win at that trial ... The decision will have no effect on Harborside's legal position or on our daily operations."

DeAngelo said he thought it would be a year at the earliest before the case is resolved.

Oakland was the first city to file suit against the federal government for targeting marijuana facilities. The city claimed the federal government can’t seize the property that Harborside leases because the federal statue of limitations ran out. It also claimed the federal government misled the city into thinking it could license dispensaries without legal consequences. But no decision has been made on the merits of those arguments as of yet.

I asked KQED's Michael Montgomery, a longtime reporter of California's medical marijuana industry, what he thought of today's ruling.

"Harborside can claim a symbolic victory in the fact that Oakland tried to get the federal government to back off, but in the end it still looks like Harborside's legal challenge is a longshot. And if they lose, they likely face closure. Unless Harborside can find a new location, that will mean a significant loss of tax revenue for the city."

To some, the action against Harborside represented an expansion of an ongoing crackdown on the medical marijuana business by U.S. Attorney Melinda Haag. Previously, her office had used proximity to schools as the main criteria for targeting dispensaries. But in threatening action against Harborside's landlord, the U.S. Attorney's office cited the size of Harborside's business, which may be the largest in the world with over 100,000 patients served. Steve DeAngelo told Oakland North in October that Harborside earned $22 million in sales in 2011, paying the city $1.2 million in taxes.

I asked DeAngelo today if the legal threat has been having any effect on business.

"We've seen a bit of a dip in business and then a rise in business, depending on what the news coverage is like," he said. "I think a lot of patients got the impression we were closed. But it hasn't had that much of an effect overall."

Here's today's decision ...

Oakland v Holder