Feds force pot clubs to deal in cash, then ban use of armored cars

Pub date September 6, 2013
WriterErin Dage
SectionPolitics Blog

In the US Drug Enforcement Administration’s latest attempt to smoke out medical marijuana dispensaries in the United States, the federal government agency made the decision to ban the use of armored cars by marijuana providers. Compounding that problem, over the last year banking companies, under pressure from the feds, have been refusing to do business with dispensaries, forcing them conduct all-cash transactions.

Dispensaries and their employees all around the Bay Area are being needlessly endangered by this decision. Businesses such as Oakland’s Harborside Health Center — which brings in about $30 million a year, according to co-founder and executive director Steve DeAngelo — stand to take a big hit.

“This decision puts my staff and I at risk,” DeAngelo told us. “People have been known to stake out the property, and having unarmored transport without a secured professional to the US Treasury makes the job even more dangerous.”

DeAngelo declined to comment on how his dispensary will transport money without armored cars. Others, such as Diane Goldstein, a retired lieutenant commander of the Redondo Beach police department and member of the organization Law Enforcement Against Prohibition, finds the decision to be downright unethical.

“It’s unethical in the sense that the DEA made the decision without considering the collateral damage that could be caused,” Goldstein said. “It endangers the people that have to transport large sums of money unprotected, law enforcement, and the community at large.”

But there is a glimmer of hope: the Department of Justice issued a memo last week that was a step forward in support of the federal government respecting states like Washington and Colorado where even recreational use of marijuana has been made legal by state ballot initiatives. The DOJ memo outlines enforcement policies such as not selling to minors or having revenue from dispensaries go to gangs or drug cartels.

“There is hope with the new memorandum released,” Dan Goldman, community liaison for the Green Cross in San Francisco said. “Though it does not directly apply to states where marijuana has not been legalized, it is a step forward.”

DeAngelo and others decried the memo as vague, but ultimately counted it as progress that may support a “large increase in momentum” in the plight for further legitimacy in the medical marijuana business.

But this clearly isn’t the first or last time DeAngelo and many other dispensaries have had the legality of their business questioned. Harborside has been locked in court battles since U.S. Attorney Melinda Haag made the move for a forfeiture proceeding for the businesses’ Oakland and San Jose properties last July. Last month federal magistrate Judge Maria Elena James granted a temporary halt to the forfeiture proceedings.

Is DeAngelo worried? “We’re in a holding pattern for the next two to two-and-a-half years,” DeAngelo said. “I’m positive that our business will continue to thrive just as it always does.”

In the meantime,  US Sen. Patrick Leahy (D-VT) has invited Attorney General Eric Holder to testify at a Sept. 10 hearing regarding whether the feds should be respecting state marijuana laws.