Agents in Oakland raid leader of medical marijuana movement

OAKLAND — Federal agents struck at the heart of California’s medical marijuana movement, raiding the nation’s first pot trade school and a popular dispensary, both run by one of the state’s most prominent and provocative activists, Richard Lee.

The raids in Oakland by the Internal Revenue Service and Drug Enforcement Administration sent a shudder through the medical cannabis trade and angered the plant’s devotees, who believe the federal government is trampling on California law and the wishes of voters who approved medical marijuana use nearly 16 years ago.

Now they are wondering what message the federal government is trying to send. President Obama promised during his 2008 campaign not to prosecute medical marijuana users who comply with state law, and Deputy Atty. Gen. David Ogden reiterated that position in a 2009 memo that many credit with helping spark the medical pot boom.

“For them to go after someone who’s as high profile as Richard Lee likely sends a message that they will go after anyone anywhere in the state over medical marijuana and that Obama’s promises are hollow,” said Joe Elford, chief counsel for the advocacy group Americans for Safe Access.

The Justice Department has been cracking down on California’s dispensaries and growers since October. But until Monday, agents had not targeted the most visible leaders, or the movement’s cradle in Oakland, where the city issues permits and taxes cannabis establishments and where Lee’s Oaksterdam University looms above Broadway with a giant college seal adorned with marijuana leaves.

Monday’s raids included Lee’s apartment, an associate’s home, the university, the dispensary and an adjoining marijuana museum, as well as a property where the dispensary formerly operated. (Lee was forced to move the business in October after the U.S. attorney sent a letter to his landlord threatening to seize the property.)

The search warrants were sealed, so it is unclear what officials retrieved. Witnesses saw agents toting out boxes of documents and bags of plant material.

Lee, 49, was briefly detained, as were three workers at his dispensary.

A paraplegic who has used a wheelchair since a severe spinal injury in 1990, Lee has said he uses marijuana to treat muscle spasticity. He opened his dispensary Coffeeshop Blue Sky in 1999, worked with city officials to regulate the industry and founded Oaksterdam in 2007 to try to legitimize it. Lee used his marijuana earnings to put the legalization measure Proposition 19 on the ballot in 2010.

Although the initiative failed, it is widely credited with raising public acceptance of the idea of legalization nationwide. Colorado and Washington will have similar measures on the ballot in November.

“I don’t know whether this morning’s raid represents some form of ‘payback’ for Proposition 19,” said Ethan Nadelmann, executive director of the influential Drug Policy Alliance, which seeks to reform the nation’s drug laws. “But I suspect and hope that the principal impact of such heavy-handed police actions by federal authorities will be to increase support for the broader legalization of marijuana.”

Nadelmann said the big question was whether the crackdown that began last fall was orchestrated by the Obama administration or by local federal officials. A spokesman for the Justice Department in Washington declined to comment, as did officials with the DEA and IRS, saying the warrants and investigation were “under seal.”

Federal agents have conducted more than 170 raids of medical marijuana operations nationwide since 2009, according to Americans for Safe Access.

Since October, U.S. attorneys have sent at least 300 letters to landlords of dispensaries in California and Colorado, ordering them to evict their tenants or face seizure of their property and prosecution. They have threatened local officials trying to permit dispensaries. The Federal Deposit Insurance Corp. has pressured banks to close accounts linked to marijuana. And the IRS has audited dozens of dispensaries using an obscure provision of the federal tax code that prohibits drug traffickers from making any deductions.

Critics of the proliferation of medical marijuana dispensaries applauded the federal intervention.

“For them to go after Oaksterdam, which is internationally known for [flouting] federal law, sends an extremely strong signal not only to California pot stores, but also around the rest of the country,” said Paul Chabot, president and founder of the Coalition for a Drug Free California. “I think in the last year we’ve turned the corner on marijuana. Now we’ve seen city after city, county after county ban dispensaries.”

But some Bay Area elected officials were not pleased.

Rebecca Kaplan, a member of the Oakland City Council, said it made no sense for the government to strike “an exemplary community member” operating in a city with some of the tightest regulations in the country. “What is the goal?” Kaplan asked. “Is it a political goal? Is it about sending a message? It certainly raises the concern that people may be targeted for their political speech.

“We have in Oakland a real need for law enforcement resources on real crime that’s a threat to people. If there’s extra law enforcement resources available, it would be nice if it would be devoted to illegal gun crime and stopping illegal gun dealers.”

A couple hundred people gathered outside Oaksterdam to protest the raids as marijuana smoke wafted in the air. The school is known for its courses on cultivation, edible production and the business of running a dispensary. Ironically, the prerequisite is a class on marijuana laws and how to operate within state guidelines.

Shortly before noon, Oakland police in riot gear arrived at the scene to stand between federal agents removing boxes of files and the increasingly unruly crowds.

Demonstrators shouted, “Shame on you!” mocked the agents and pounded on their vehicles. When the agents moved to the site of the former dispensary a few blocks away, the crowd followed. A man who, witnesses said, got into a shoving match with one of the officers was detained.

Brett Bankson, 30, of Oakland, came to see the raids with his dog and show support for Lee.

He noted that Oakland officials dealt with an initial proliferation of dispensaries in the area through strict regulation that limited the number to four and captured increasing amounts of tax revenue for the strained municipal budget. Last month, city officials granted approval to four more.

“They found a way to regulate that was a good compromise for everyone,” he said. “The whole local economy that has depended on this could collapse.

“Now that they’re taking away legal avenues, people are going to pursue illegal avenues,” he said.

Jeff Jones, an Oakland medical marijuana activist who started the city’s first cooperative in 1995 but was shut down by the federal government, said he thought the raid could be a turning point. He noted that it came the day before activists planned to march from San Francisco City Hall to the federal building for a daylong protest against the federal crackdown.

“We couldn’t have asked for a better way to get everybody there,” said Jones. “If the feds wanted to make this go away quietly, they just stoked the hornet’s nest.”

Jones, who worked with Lee on Proposition 19, said that he and Lee were surprised this did not happen in 2010.

The 2009 memo by Ogden said agencies “should not focus federal resources . . . on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.”

But part of the problem is that state law has never made it clear exactly how marijuana should be distributed, so “unambiguous compliance” is often in the eye of the beholder.

The state attorney general issued guidelines saying dispensaries must be nonprofit collectives. But Lee said in 2010 that state law was vague enough to allow for his “liberal, progressive” interpretation that he could make a profit.

Federal policy clearly forbids it. In his memo, Ogden wrote that “prosecution of commercial enterprises that unlawfully market and sell marijuana for profit continues to be an enforcement priority of the Department.”

In June, Ogden’s successor, James M. Cole, answered federal prosecutors’ requests for clarification on the law, saying the memo was “never intended to shield” all people who “knowingly facilitate” violations of the Controlled Substances Act.

Monday’s events did not deter the founder of the state’s largest dispensary, Harborside Health Center, just down the road in Oakland. Steve DeAngelo has been as visible as Lee, having let the Discovery Channel film the series “Weed Wars” about his dispensary.

He said he has operated under the threat of prosecution since he opened five years ago, and that this was just another skirmish in a “40 year war we’re destined to win.”

lee.romney@latimes.com

joe.mozingo@latimes.com

john.hoeffel@latimes.com

Romney reported from Oakland and Mozingo and Hoeffel from Los Angeles.