POLITICS AND PROFITS DIVIDE OAKLAND MEDICAL CANNABIS
PROVIDERS

Harborside's Stephen Deangelo Has A Falling Out With Ex-partner Jeff
Wilcox Over Giant Pot Farms.

A popular dispensary owner has found himself at odds with his
long-time peers, city officials, and former business associates at a
time when Oakland has made an historic move to allow the country's
first large-scale commercial medical cannabis cultivation farms.

The Oakland City Council voted last week to license four
football-field sized indoor grows by January, 2011, and supply up to
one-fifth of the state's medicinal pot, taxing the product to net
millions of dollars per year. But the cultivation-permitting regime
has illuminated stark rifts in Oakland's medical cannabis community,
which outsiders tend to view as being cohesive.

Leading dispensary Harborside Health Center and owner Stephen DeAngelo
spoke against the cultivation ordinance, alongside fellow Oakland
dispensary the Purple Heart Patient Center. On the other side:
Oaksterdam owner Richard Lee whose businesses include the Coffeshop
Blue Sky dispensary, as well as other growers, and local landowner
Jeff Wilcox - a former business associate of DeAngelo and Harborside's
neighbor.

DeAngelo spoke on behalf of perhaps 250 local growers who supply
Harborside and feel threatened by the rules, which would initially
push growers into two camps: those under 96 square-feet that will not
require a permit, and large football field-sized facilities which will
need a permit.

"I think that the medical cannabis community is united on all of our
core issues," DeAngelo said. "Now the question is no longer, 'Is
cannabis going to be legal?' It's changed to, 'How is cannabis going
to be legal?'"

The differences can be wide. As traditional market forces begin to
exert themselves on the once-marginalized illicit drug, a spectrum of
reformers has emerged, from pragmatic capitalists on one end, to
idealistic, longtime radicals on another. This spread is evident in
the once-close relationship between Wilcox and DeAngelo, who are now
estranged. The two worked together for months devising a plan for
large commercial grows in Oakland, but had a falling out over control
of the facility and have begun airing their differences in public.

Harborside Health Center has possibly the biggest pot club on the West
Coast and wants to get into the cultivation side of the industry, but
lacks the space on-site at its waterfront location. Wilcox has acres
and acres of light industrial-zoned land near Harborside and wants to
get into growing legal medical cannabis.

DeAngelo said he can't say for sure why the two parted ways late last
year. Wilcox has said that DeAngelo wanted too much control over the
enterprise, while he wants to allow multitudes to come in and work his
space for a fee. "I was, like, 'No, no, no this is a regional thing,'"
Wilcox said.

DeAngelo's push for control of cultivation at Wilcox's site came from
two assumptions which are now to be issues of debate. The first one
was that state law requires grows to be associated with specific
patients in collectives or cooperatives.

Simply put, growers need to be able to produce a patient list to
justify their grows under Prop. 215 and SB 420. Some enforcement in
California is so strict, growers put individual labels on each plant
stating who the plant is being grown for. Harborside has such a
patient list, but Wilcox might not need it after all.

Oakland has taken state law and interpreted it quite liberally over
the years, DeAngelo said. Permitting big grows without the legal
paperwork proving who the plants are for would be a cutting-edge
interpretation of state law. Some experts, including Dale Gieringer at
NORML, say Oakland would violate both federal and state law at that
point, thereby inviting a DEA raid. Similar raids of permitted city
grows in Mendocino already have occurred. "It's absolutely critical we
be in strict compliance with state law," DeAngelo said. "Cultivation
on this magnitude is a huge challenge to the DEA. They will be all
over this, looking at it very closely and if they can justify a
departure from Obama's policy they will go after Oakland."

DeAngelo's second assumption was that the city would allow
dispensaries to get large-scale cultivation permits. But that is now
unclear. Currently, dispensaries have a permit to cultivate on-site,
but none have the space to do so. Councilmember Larry Reid, a
principle architect of the cultivation ordinance, has adamantly stated
that no dispensaries shall get cultivation permits, claiming he wants
to prevent a "monopoly" on the industry. Other councilmembers have
disagreed with Reid. "I can't imagine what justification there could
possibly be for prohibiting a non-profit organization of patients for
getting a cultivation permit," DeAngelo said. (See "Is It Legal to Tax
Large Pot Farms?" on page 38.)

Council consensus on dispensaries getting cultivating permits remains
unclear; as well as exactly how or if the city will justify
large-scale cultivation under state law. The city might choose to deal
with both issues and many, many others through administrative
regulations developed in the months ahead.

Seeds & Stems

An attempt to allow the trademarking of cannabis names ended last
week. A patent-office spokesman told the Wall Street Journal they had
opened up trademarking to a new medical cannabis-specific category for
ninety days and received more than 250 trademark applications for
"Tartukan Death Weed," "Pot-N-Candy," and numerous businesses
incorporating "Green" and "4:20." The US Patent Office then canceled
the category. Citizens may still apply to get uncategorized,
pot-specific trademarks, but no pot trademarks have ever actually been
granted.