After the raid: One year after federal agents raided Oaksterdam, what’s changed?

One year ago, federal agents raided Oaksterdam University, a move that sent ripples throughout Oakland’s well-established cannabis industry and raised questions about the complex and often conflicting web of state and federal regulations surrounding medical marijuana use and patient rights. In this four-part series, Oakland North will examine what’s changed since last year’s raid, who was affected the most, and what may lie in store for medical marijuana use here in Oakland.

Oaksterdam University was once a 30,000 square foot campus in the heart of downtown Oakland on 1600 Broadway. It was hard to miss: A three-story mural on the campus’ façade — which has since been painted over – depicted iconic Oakland landmarks, including the Fox Theater, the Port of Oakland and the words “Oaksterdam University” with a marijuana leaf in the middle of the “O” in “Oaksterdam.”

Opened in 2007, Oaksterdam became the country’s first trade school focusing entirely on the cannabis industry, with classes on the legalities and politics of medical marijuana, horticulture, “cannabusiness” and cooking with cannabis. In fact, said Dale Gieringer, state coordinator of California NORML (National Organization for the Reform of Marijuana Laws), “Oaksterdam University, to my knowledge, was the first university attempting to educate people in the cannabis industry anywhere.”

At the time of the raid, business was booming. Over 15,000 students have passed through Oaksterdam’s doors since Richard Lee — one of the country’s most well-known marijuana activists — established the school. By last April, Oaksterdam was employing more than 100 instructors, and several business entities were operating under the school’s umbrella, including a cannabis museum and Coffeeshop Blue Sky, a licensed dispensary.

Agents from the U.S. Marshals Service, Drug Enforcement Agency and the Internal Revenue Service raided Oaksterdam on April 2, 2012. Hundreds of protestors immediately took to the streets of downtown Oakland, many openly smoking weed as agents stripped the university of most of its property. Five locations affiliated with Oaksterdam were targeted, including Lee’s own home, Coffeeshop Blue Sky, the museum, and a storage unit.

“It was one of the most damaging things that could happen to a business,” said Dale Sky Jones, then Oaksterdam’s executive chancellor, who later took over as head of the university. “Almost like a fire or a flood. Except this was an act of the federal government, not an act of God or of nature.”

A year later, the school is still running, although as a much smaller operation. It’s still unclear what motivated the raid or whether the agencies plan to file any charges related to it; neither U.S. Attorney Melinda Haag nor representatives for the DEA returned interview requests for this article. So far, no legal action has been taken against Oaksterdam or Lee, Jones says.

Still, said Oaksterdam instructor Kali Grech, “We knew it would never be the same again.” Grech is a criminal defense lawyer specializing in medical marijuana defense at Pier 5 Law Offices in San Francisco, and she teaches civics and legal courses at Oaksterdam. Following the raid, uncertain whether federal charges would be filed against them, Grech met with her fellow employees to discuss their legal rights. “There was a lot of great fear in a lot of people’s lives,” she said. “They could prosecute everyone; they could prosecute no one. It’s also a scar. We remember back to that time as being very painful.”

Meanwhile, news of the raid and the message that federal eyes were watching Oakland reverberated quickly throughout the city’s close-knit network of dispensaries. Steve D’Angelo, founder and director of Harborside Health Center — the country’s largest cannabis dispensary with locations in Oakland and in San Jose — remembers the morning of the raid well.  “My immediate thought was, ‘This is absolutely outrageous and I need to get down to Oaksterdam and do something,’” he said. “How dare they attack such a beloved institution that’s done so much good for the city of Oakland?”

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While federal authorities have not revealed much information about what precipitated the raid, it’s likely that Oakland was a sticking point in a clash between federal and state cannabis laws, which are out of sync. Medical marijuana was legalized in California in 1996 after the passage of Proposition 215, the Compassionate Use Act, but there is no such thing as “medical marijuana” under federal law. Marijuana is classified by the federal government as a Schedule I substance, meaning it has no accepted medical use and is believed to have a high potential for abuse. In 2011, the DEA reviewed a petition to reschedule marijuana, which could have acknowledged and expanded research on its medicinal properties, but it was denied.

Despite federal warnings, states are still passing their own laws which conflict with federal law. In January, Massachusetts became the 18^th state to legalize medical marijuana, joining neighboring states Connecticut, Maine, Rhode Island and Vermont. This year, Washington and Colorado became the first states to decriminalize and regulate possession of an ounce or less of marijuana for medicinal and recreational use among adults. California also tried to legalize recreational marijuana use with Proposition 19, the Regulate, Control and Tax Cannabis Act, a failed 2010 ballot initiative that was strongly supported by Lee as well as Oakland’s City Attorney Barbara Parker and her predecessor John Russo.

In California, qualified medical marijuana patients have to apply for an identification card — good for up to a year — through the California Department of Public Health’s Medical Marijuana Program. Patients must have a doctor’s recommendation as well as a condition that merits a prescription for marijuana. This can include maladies ranging from migraines and severe nausea to cancer and AIDS. The department isn’t allowed to offer information on how to obtain seeds or plants for personal growing, or where to obtain marijuana or related paraphernalia for use.

Medical marijuana has been largely supported by Oakland’s city government, which currently allows up to eight permitted dispensaries to operate within the city. “There are truly sick people who have to find this medicine,” said Alex Katz, chief of staff for Oakland’s City Attorney. “It’s a medical issue. The voters of California have decided in their great wisdom that this kind of medicine should be available.”

City law allows card-carrying patients to grow their own plants indoors, with up to 72 plants in a maximum 32 square foot growing space. For outdoor growing, patients can grow up to 20 plants at once without any restrictions on area size. The city also limits each patient to possessing no more than three pounds of dried marijuana. Dispensaries serving four or more patients are allowed six mature and 12 immature plants at a time, and a half-pound of marijuana per patient.

“The City of Oakland has consistently taken a strong position in support of patients and dispensaries that act properly and in accordance with state and local laws,” said Jason Overman, spokesman for at-large city councilmember Rebecca Kaplan. (During the protest surrounding the Oaksterdam raid, Kaplan famously rode up on her bike and criticized the federal government for prioritizing a medical marijuana crackdowns over policing illegal gun ownership.) “It’s essential that available law enforcement resources be used to stop the epidemic of illegal gun trafficking and gun violence, rather than wasting those resources going after medical cannabis,” Overman said.

Many observers have called Oakland’s marijuana industry a financial boon. In 2004, the city granted permits to four licensed dispensaries, which quickly generated upwards of $17 million in just three years of business. Measure Z passed that same year, which made investigations, arrests, prosecutions and jailing for marijuana offenses committed by adults the lowest priority for local police. Five years later, nearly 80 percent of Oakland’s voters approved Measure F, authorizing the city to impose a 1.8 percent tax on all “cannabis business activity”—the first tax of its kind in the nation. At the time of the 2009 local ballot measure election, the city estimated that Measure F would raise roughly $294,000 in additional tax revenue in 2010.

Supporters also say the dispensaries, many of which are located along the Broadway corridor, helped revitalize downtown Oakland by generating business and much-needed foot traffic. Before the dispensaries took off, the neighborhoods surrounding Harborside and Oaksterdam were lackluster and downtrodden, D’Angelo said. Now, he said, “Not only do we have world-class restaurants, we have two world-class theaters. You go downtown on weekends now and there’s people, there’s activity, and none of that was happening before medical cannabis was licensed in the city of Oakland.”

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Tensions between the city and the federal government began to crop up a few years before Oaksterdam’s raid, as the city continued to push regulations forward to support its growing pot industry. In 2010, for instance, the Oakland City Council approved an ordinance to allow industrial-scale grow operations in the city to stock its own dispensaries. The city hoped to promote stringent cultivation standards — like barring the use of chemicals and pesticides during growing — and to decrease the numbers of unregulated grow operations springing up in homes and residential areas, many of which were causing fires and being burgled. Had this cash crop come to fruition, it would have generated up to $2 million in tax revenue for Oakland, according to a 2010 City of Oakland report.

But in February, 2011, former City Attorney John Russo received a letter from Melinda Haag, U.S. Attorney for the Northern District of California, with a stern warning. “The Department is carefully considering civil and criminal legal remedies regarding those who seek to set up industrial marijuana growing warehouses in Oakland,” the letter stated, listing civil fines, criminal prosecution and forfeiture of property as legal actions that could be taken against growers. The city council suspended its plans.

By that October, California’s four U.S. Attorneys had announced that they intended to move swiftly against landlords who rented their properties to dispensaries. It was a seemingly contradictory move; in 2009, the Obama administration had announced that federal prosecutors wouldn’t target individual medical marijuana patients or businesses that sold pot for medical use, as long as they remained in compliance with state and local laws.

Hundreds of letters were sent out to landlords up and down the state who owned properties housing active dispensaries, warning them to evict at the cost of legal action. Lee closed Coffeeshop Blue Sky, his Oakland dispensary, after the Department of Justice threatened his landlord with prosecution or forfeiture of the property. But he re-opened it three doors down inside of Oaksterdam’s museum.

More than 500 dispensaries closed elsewhere throughout the state, said Kris Hermes, media specialist for Americans for Safe Access, one of the largest national campaigns representing patients, medical professionals and scientists who want legal access to medical marijuana. “While that has had an impact, it hasn’t eliminated that industry,” Hermes said. “It still is fairly robust. There are more than 1,000 dispensaries operating around California. It shows no signs of going away.”

Gieringer of California NORML said he believes the Oaksterdam raid was a calculated move on part of the federal government to teach a lesson to commercialized marijuana enterprises just as Obama was entering a pivotal election year. “They went after the highest and most conspicuous places they could,” he said, citing the hundreds of “rogue operations” throughout the state that still operate under questionable means. “They targeted some of the best-run places instead of the worst-run.”

After the raid, Lee created an online petition urging the Obama administration to keep his campaign’s original promise not to prosecute dispensaries. It garnered over 27,000 signatures. “The consequences have been devastating,” his message on the petition reads. “This was a senseless act of intimidation. But I’ve been an activist far too long to become intimidated—and with the majority of Americans and common sense on our side, I know this is a fight we can win.”

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But changes within Oaksterdam since the raid have been profound. While the school has continued to run, enrollment dropped off sharply at first, and the faculty is down to between 15 and 20 employees. The school and the dispensary have since parted ways; both are at new locations and under new management.

After the raid, Lee stepped down from leading Oaksterdam. In an interview with Oakland North last April, he acknowledged his worries over facing major federal charges. “I feel I have done my duty on the front line for a long time now, and partly to keep my legal issues separate so that Oaksterdam University can go on without problems,” he said at the time. Dale Sky Jones took over the school; she had an existing contract with Lee that guaranteed her management of the university should anything happen to him.

When Lee stepped down, the several properties licensed under his LLC (limited liability corporation), including his dispensary, were split up among new owners. Some were taken over by former Oaksterdam employees, like Salwa Ibrahim—Lee’s former executive assistant—who now serves as owner and general manager of Blum Oakland, a dispensary that opened in November on West Grand Avenue.

As Oaksterdam’s new head, Jones was tasked with practically starting the university over from scratch; despite dropping enrollment and legal ambiguity, she said, they were determined to stay open as a school, if not a dispensary. Much of the school’s property had been confiscated, patients and students alike were shaken up, and nobody knew if or when the federal government would file charges against Oaksterdam’s operators. “It’s been probably the most intense period of my life,” Jones said, speaking of the year since the raid.

“The ship was just upside down. We had just been gutted,” she continued. “Getting the ship righted and realizing you have no tools, no rigging, most of your crew is lost at sea, there’s no actual guarantee you will even find dry land—you just keep swimming.”

Coming up in this weekly series, we’ll learn more about what’s happened at Oaksterdam University throughout the last year, the legal questions raised by the raid, and what its effect has been on medical marijuana patients throughout the city.

You can read Oakland North’s complete past coverage of marijuana-related issues here.