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The Oakland Community Collective medical cannabis dispensary was supposed to be open by now, and it was supposed to open in the vibrant Uptown district, two blocks from the 19th Street BART Station.
But then, as they say, everything went to pot.
Federal authorities in April raided Oaksterdam University and several related businesses, including a dispensary. Earlier this month, the Justice Department moved to shut down Oakland's largest dispensary by trying to seize its landlords' properties.
The collective's prospective landlord decided not to risk the same fate, leaving collective leaders no choice but to search for a different home.
The best they could find was about five blocks and seemingly half a world a way from the original location. Instead of operating out of a modern office building on Broadway at 21st Street adjacent to theaters and restaurants, the collective is eyeing a building with frosted windows next to a gated alleyway that is home to two snarling pit bulls at 578 West Grand Ave.
And even that's not guaranteed.
The building's owner still needs to evict the current tenants, a different dispensary team that failed to obtain a city permit and has since filed a lawsuit against its landlords accusing them of violating their lease agreement.
"Nothing is for certain until we open our doors," said Salwa Ibrahim, the collective's president. She's hoping that the grand opening once slated for June finally will arrive by the end of October.
Crackdown hinders expansion plans
Oakland granted preliminary approval in March to four medical cannabis dispensary outfits, including Ibrahim's, potentially doubling the number of city dispensaries from four to eight.
That the collective is still expected to be the first of the new dispensaries to open is testament to the impact of a coordinated effort by federal prosecutors to target dispensaries by going after their landlords.
Since October, several hundred California dispensaries have closed or been forced to move after prosecutors sent landlords letters threatening to seize the properties they rent to marijuana-selling tenants.
The targeted dispensaries, including local industry pioneers such as Berkeley Patients Group and the former Coffeeshop Blue Sky in Oakland, were all within 1,000 feet of a school, park or youth-serving facility.
Prosecutors escalated their enforcement efforts earlier this month by going after the landlords of Oakland's Harborside Health Center, the nation's largest dispensary with revenues of $22 million last year. The dispensary didn't violate the 1,000 foot standard at either its Oakland or San Jose locations, but U.S. Attorney Melinda Haag determined its size made it especially prone to providing cannabis to people without a proven medical need.
The federal crackdown has not dealt a fatal blow to Oakland's medical cannabis industry, but it has delayed openings, forced out perspective operators and landlords, and all but assured that the new dispensaries will be in smaller buildings on the margins of the city.
"Anyone trying to get into a large building is going to find it very tough because there's no protection for the landlords," said Jeff Jones a former dispensary operator and head of Oakland's Patient ID Center.
Interest still strong
Of the four dispensary teams selected in March, Ibrahim's collective and Tidewater Patients Group still are seeking city approval for their sites. Agramed, the dispensary group formed by businessman Jeff Wilcox, gave up its bid recently. G-8 Medical Alliance was disqualified because of its ties to Dhar Mann, a businessman who was indicted last month on charges that he defrauded the city.
Oakland now is considering awarding permits to two additional dispensary groups: Magnolia Wellness, Inc., and Abatin Wellness, which is associated with television personality Montel Williams.
The industry's resiliency in Oakland is evidence both of the commitment of activists to provide patients with cannabis and the continued opportunity for immense profit. Successful dispensaries like Harborside make millions, pay landlords anywhere from 20 percent to 200 percent more than going rents and generate sorely needed tax revenue.
Oakland netted $1.68 million in taxes from dispensaries last year, about two-thirds of which came from Harborside. Industry veterans said that Harborside's demise would prompt new dispensary operators -- potentially more interested in profit than helping patients -- to get into the business and vie for its customers.
"When you shake the hornets nest you're bound to stir up a lot of activity," Jones said.
Landlords antsy
Oakland received more than 100 inquiries last year when it announced it would issue permits for the four additional dispensaries.
But in October, shortly before the application deadline, federal prosecutors announced the stepped-up enforcement efforts against property owners. Landlords became hesitant, and by the time applications were due, Oakland had just 12 teams to choose from, most of whose preferred sites couldn't pass muster with city or Department of Justice standards.
The city approved Ibrahim's initial site at 2101 Broadway, but Ibrahim and her partner Derek Peterson balked when the landlord, David Himy, asked them to provide bonds to protect the value of his property if prosecutors moved to seize it.
Now they are hoping the legal issues are quickly resolved at their new proposed site on West Grand. The current tenant, AMCD, Inc., is accusing the property owner of going back on promises to allow them to sublet the property, according to court papers. They blame the landlord for their failure to obtain a city dispensary permit, which they wrote cost them $30 million in lost revenue.
The challenge of finding a willing landlord and suitable location was evident earlier this month when Tidewater proposed three dispensary sites, all of which faced potential pitfalls. A proposed site at 3974 Manila Ave., in the Temescal neighborhood was quickly rejected amid community concerns. Another site at 1724 Franklin could attract federal attention because it's just about 1,000 feet from Snow Park.
A third option for Tidewater is the former Isuzu dealership at 3020 Broadway. The building's longtime owner Bruce Burrows said the move against Harborside's landlords concerned him, but that while numerous property owners have been forced to evict dispensaries, he didn't know of any that actually lost their buildings.
"It's not like they can just take your building at 5 p.m. on a Friday," Burrows said. If he ends up renting to Tidewater, Burrows said he'll make sure the lease allows him to terminate on short notice if federal prosecutors threaten to seize the property. "Without that you're just committing suicide," he said. "It just doesn't make sense."
News Hawk- TruthSeekr420 420 MAGAZINE
Source: contracostatimes.com
Author: Matthew Artz
Contact: Contact Us - ContraCostaTimes.com
Website: Oakland's medical marijuana dispensaries struggle to open shop - ContraCostaTimes.com
But then, as they say, everything went to pot.
Federal authorities in April raided Oaksterdam University and several related businesses, including a dispensary. Earlier this month, the Justice Department moved to shut down Oakland's largest dispensary by trying to seize its landlords' properties.
The collective's prospective landlord decided not to risk the same fate, leaving collective leaders no choice but to search for a different home.
The best they could find was about five blocks and seemingly half a world a way from the original location. Instead of operating out of a modern office building on Broadway at 21st Street adjacent to theaters and restaurants, the collective is eyeing a building with frosted windows next to a gated alleyway that is home to two snarling pit bulls at 578 West Grand Ave.
And even that's not guaranteed.
The building's owner still needs to evict the current tenants, a different dispensary team that failed to obtain a city permit and has since filed a lawsuit against its landlords accusing them of violating their lease agreement.
"Nothing is for certain until we open our doors," said Salwa Ibrahim, the collective's president. She's hoping that the grand opening once slated for June finally will arrive by the end of October.
Crackdown hinders expansion plans
Oakland granted preliminary approval in March to four medical cannabis dispensary outfits, including Ibrahim's, potentially doubling the number of city dispensaries from four to eight.
That the collective is still expected to be the first of the new dispensaries to open is testament to the impact of a coordinated effort by federal prosecutors to target dispensaries by going after their landlords.
Since October, several hundred California dispensaries have closed or been forced to move after prosecutors sent landlords letters threatening to seize the properties they rent to marijuana-selling tenants.
The targeted dispensaries, including local industry pioneers such as Berkeley Patients Group and the former Coffeeshop Blue Sky in Oakland, were all within 1,000 feet of a school, park or youth-serving facility.
Prosecutors escalated their enforcement efforts earlier this month by going after the landlords of Oakland's Harborside Health Center, the nation's largest dispensary with revenues of $22 million last year. The dispensary didn't violate the 1,000 foot standard at either its Oakland or San Jose locations, but U.S. Attorney Melinda Haag determined its size made it especially prone to providing cannabis to people without a proven medical need.
The federal crackdown has not dealt a fatal blow to Oakland's medical cannabis industry, but it has delayed openings, forced out perspective operators and landlords, and all but assured that the new dispensaries will be in smaller buildings on the margins of the city.
"Anyone trying to get into a large building is going to find it very tough because there's no protection for the landlords," said Jeff Jones a former dispensary operator and head of Oakland's Patient ID Center.
Interest still strong
Of the four dispensary teams selected in March, Ibrahim's collective and Tidewater Patients Group still are seeking city approval for their sites. Agramed, the dispensary group formed by businessman Jeff Wilcox, gave up its bid recently. G-8 Medical Alliance was disqualified because of its ties to Dhar Mann, a businessman who was indicted last month on charges that he defrauded the city.
Oakland now is considering awarding permits to two additional dispensary groups: Magnolia Wellness, Inc., and Abatin Wellness, which is associated with television personality Montel Williams.
The industry's resiliency in Oakland is evidence both of the commitment of activists to provide patients with cannabis and the continued opportunity for immense profit. Successful dispensaries like Harborside make millions, pay landlords anywhere from 20 percent to 200 percent more than going rents and generate sorely needed tax revenue.
Oakland netted $1.68 million in taxes from dispensaries last year, about two-thirds of which came from Harborside. Industry veterans said that Harborside's demise would prompt new dispensary operators -- potentially more interested in profit than helping patients -- to get into the business and vie for its customers.
"When you shake the hornets nest you're bound to stir up a lot of activity," Jones said.
Landlords antsy
Oakland received more than 100 inquiries last year when it announced it would issue permits for the four additional dispensaries.
But in October, shortly before the application deadline, federal prosecutors announced the stepped-up enforcement efforts against property owners. Landlords became hesitant, and by the time applications were due, Oakland had just 12 teams to choose from, most of whose preferred sites couldn't pass muster with city or Department of Justice standards.
The city approved Ibrahim's initial site at 2101 Broadway, but Ibrahim and her partner Derek Peterson balked when the landlord, David Himy, asked them to provide bonds to protect the value of his property if prosecutors moved to seize it.
Now they are hoping the legal issues are quickly resolved at their new proposed site on West Grand. The current tenant, AMCD, Inc., is accusing the property owner of going back on promises to allow them to sublet the property, according to court papers. They blame the landlord for their failure to obtain a city dispensary permit, which they wrote cost them $30 million in lost revenue.
The challenge of finding a willing landlord and suitable location was evident earlier this month when Tidewater proposed three dispensary sites, all of which faced potential pitfalls. A proposed site at 3974 Manila Ave., in the Temescal neighborhood was quickly rejected amid community concerns. Another site at 1724 Franklin could attract federal attention because it's just about 1,000 feet from Snow Park.
A third option for Tidewater is the former Isuzu dealership at 3020 Broadway. The building's longtime owner Bruce Burrows said the move against Harborside's landlords concerned him, but that while numerous property owners have been forced to evict dispensaries, he didn't know of any that actually lost their buildings.
"It's not like they can just take your building at 5 p.m. on a Friday," Burrows said. If he ends up renting to Tidewater, Burrows said he'll make sure the lease allows him to terminate on short notice if federal prosecutors threaten to seize the property. "Without that you're just committing suicide," he said. "It just doesn't make sense."
News Hawk- TruthSeekr420 420 MAGAZINE
Source: contracostatimes.com
Author: Matthew Artz
Contact: Contact Us - ContraCostaTimes.com
Website: Oakland's medical marijuana dispensaries struggle to open shop - ContraCostaTimes.com
