A hard-line stance by the federal government on medical marijuana dispensaries and the reluctance of landlords to rent out their space is being blamed for a delay in the opening of new dispensaries after Oakland officials permitted the establishment of four new medical marijuana facilities.
Nearly a year after officials gave approval for the four dispensaries, only one has opened, the San Francisco Chronicle reported Saturday.
After federal prosecutors moved to seize the property occupied by Harborside Health Center dispensary, landlords became less willing to rent to marijuana dispensaries, city leaders and medical marijuana advocates told the newspaper.
In July, federal agents taped a forfeiture notice on the front door of the dispensary. That case is still pending.
“Ever since the U.S. attorney took their hard-line stance on property owners, property owners have been hesitant to lease space,” said Arturo Sanchez, the deputy city administrator who oversees the city’s permitting process for marijuana dispensaries. “That was complicated further after the forfeiture action by the U.S. attorney against Harborside.”
Last March, officials approved the four new dispensaries, a move that would have doubled the number of pot dispensaries with city permits and, officials said, would have generated $1.7 million in annual tax revenue for the city. But those approvals came just before a crackdown by federal prosecutors on California pot dispensaries.
Besides the Harborside case, in April, the founder of a Northern California medical marijuana training school said he was giving up his downtown Oakland-based pot businesses after a federal raid bankrupted him.
Internal Revenue Service and Drug Enforcement Administration agents raided the home of Richard Lee, his Oaksterdam University — a facility that offered classes to would-be medical marijuana providers — and a medical marijuana dispensary he also founded. During the raids, agents confiscated marijuana, computers and files from Lee’s businesses, making it difficult to keep operating, he said at the time.
The one dispensary that did open in the past year — Blum Oakland — also faced reluctance from a landlord.
The landlord of one proposed site for Blum had wanted a $4 million bond even though the property was worth only $2 million, Sanchez said.
Besides the federal crackdown, Oakland places a variety of restrictions on where dispensaries can be located.
They have to be at least 600 feet from places frequented by children, including parks, libraries, schools, and other dispensaries. They are banned from residential areas, Sanchez said.
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