Landlord can’t shut down nation’s largest pot shop, judge says

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The nation’s largest medical marijuana dispensary won a round in court Monday when a federal magistrate judge denied an effort by its landlords to immediately shutter its operations in Oakland and San Jose.

The landlords of Harborside Health Center have been under acute pressure since federal prosecutors last summer fled civil forfeiture actions against them, threatening to seize the properties due to marijuana sales at the facilities.

In her ruling in U.S. District Court in San Francisco, however, Chief Magistrate Judge Maria-Elena James said ‘any argument about the urgency of stopping Harborside’s activity rings hollow’ since the landlords have known for years that it was a medical cannabis dispensary, and would face no irreparable harm by allowing operations to continue until a fuller legal airing of the issues takes place.

Furthermore, she concluded, the landlords had no legal standing to seek the immediate closure by contending violations of the federal Controlled Substances Act were occurring there. Only the government can do so.

Though the feds joined the recent motion, they did not seek an immediate stop to sales when they moved against the landlords last summer, ‘indicating that the Government was not focused on suspending Harborside’s operations during the pendency of the forfeiture actions,’ James wrote.

Harborside will now have the opportunity to battle the federal civil forfeiture actions in court.

‘We look forward to proving our case in front of a jury, and continue to believe we will prevail,’ Harborside’s executive director, Steve DeAngelo, said in a statement Monday night.

Monday’s ruling means the medical cannabis collective, which serves more than 108,000 patients, may continue to operate for the time being. It also sets the stage for what is likely to be a precedent-setting legal battle nationwide on the increasing clash between federal and state marijuana laws.

The city of Oakland has weighed in, siding with Harborside in a lawsuit against federal prosecutors that contends the forfeiture attempt is unlawful because it falls outside the statute of limitations and that federal officials allowed Oakland to believe they would not pursue dispensaries that were complying with state and local laws.

Cedric Chao, a pro bono attorney for the city of Oakland, had argued that the immediate closure of the dispensaries would harm the city by depriving its municipal coffers of taxes, forcing patients into the underground market, and driving up crime.

In her ruling, James denied a request by Oakland to freeze the forfeiture action while its case against the feds is heard. Instead, she ordered the cases coordinated.

‘The city of Oakland could not be more pleased,’ Chao said. ‘The patients can continue to get the medicine. They won’t be thrown in the streets. There won’t be an immediate public health crisis. There won’t be a public safety crisis.’

Chao said the ruling also alleviated Oakland’s concern that if the dispensaries were shuttered by injunction, the feds would drop the forfeiture cases, denying opponents a chance to probe the government’s actions in court. ‘That’s what’s so unfair about their whole strategy, that they use landlords as their proxy,’ said Chao.

The U.S. attorney’s office has repeatedly declined to comment on the litigation because it is ongoing. Prosecutors have filed a motion to toss Oakland’s suit, contending that the city has no legal standing to weigh in. That issue will be heard at a hearing on Jan. 31.

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-- Lee Romney in Oakland