OAKLAND -- It looked like a Black Friday shopping scene: people tapping at their smart phones and staring into space on lines that snaked around the lobby of an Oakland medical cannabis dispensary marked for death by federal prosecutors.
"I heard it on the news last night and said, 'Tomorrow, I'm heading straight over,'" said Helen, a slender 69-year-old Oakland resident who needs cannabis to help her sleep.
Prosecutors announced Wednesday that they are moving to seize the industrial building that for six years has been home to Harborside Health Center, the nation's largest and most profitable medical cannabis dispensary.
Harborside's Oakland facility is bigger than many drugstores. It offers customers free yoga and acupuncture and carries 40 different strains of marijuana, along with plants, bongs and hemp fedoras.
Prosecutors are also trying to seize Harborside's smaller and less profitable San Jose dispensary. Hearings in both cases are scheduled for October.
The legal maneuver escalates a federal crackdown on California dispensaries, which violate federal drug laws against selling marijuana. It also threatens to deprive Oakland of one of its top sales tax contributors, scare off property owners from renting to dispensaries and ignite a legal battle with one of the few dispensaries with the financial might to fight both the federal government and its landlord.
But the immediate impact on Thursday was to send many of Harborside's 1,100 customers rushing to the dispensaries to stock up on varieties with names like Star Sour and Orange Juliet that cost as much as $360 per ounce.
"How would you feel if they were going to close Walgreens and you couldn't get your medicine," said Roger Langaard, a 64-year-old Alameda resident, who like many people in line feared that Harborside could be shut down at any moment.
Fighting the industry
Federal prosecutors have forced hundreds of dispensaries statewide to close in recent months, citing violations of state requirements that they be farther than 1,000 feet from schools, parks and playgrounds.
Harborside's locations, at 1840 Embarcadero in Oakland and at 2106 Ringwood Ave. in San Jose, abide by those rules. However, U.S. Attorney Melinda Haag said she was now targeting "marijuana superstores" such as Harborside because the larger operations increased the likelihood that state marijuana laws would be violated and that nonpatients would get access to the drug.
To oust Harborside, prosecutors have filed a civil action to seize its two locations from their landlords.
Harborside's Oakland location, valued at $1.8 million, is owned by Ana Chretien, who also operates her security firm at the address. Her attorney, Geoff Spellberg, said he hoped to reach out to prosecutors and settle the mater. "All she did was lease to a tenant who from what we know has done everything to comply with state of California regulations."
The dispensary's San Jose location in the Concourse Business Center is owned by Bruce Edwards of Saratoga, records show. Edwards could not be reached for comment.
Harborside Executive Director Steve DeAngelo said he would not close the dispensaries and would fight any effort by his landlords to evict him.
"She cannot dislodge us from the lease," he said of Chretien.
Property owners have little recourse to prevent prosecutors from seizing their properties because they rent to dispensaries, which blatantly violate federal law prohibiting marijuana sales.
"The law is the law," said UC Hastings College of the Law Professor Marsha Cohen. "Other than perhaps delaying, they are pretty much up the creek, if the government wishes to shut them down."
Even if Harborside fought the evictions, Cohen said the government could seize the properties, evict the dispensary and then return it to their owners.
"Once the federal government have seized the property, your lease wouldn't be worth anything," she said.
Robert Raich, an attorney who specializes in marijuana law, said that if Harborside and the landlords did challenge the forfeiture proceedings, they would have the funds to mount a vigorous defense and could take their chances that a local jury wouldn't look favorably on federal prosecutors closing down dispensaries.
"You might not be able to get a unanimous jury in San Francisco or Oakland that would let the government do that," he said.
DeAngelo, 54, describes himself a lifelong cannabis activist. He moved to California in 2006 and six years later opened what would quickly become the nation's largest dispensary.
Harborside generated $22 million last year, and paid more than $3 million in state and local taxes, including $1.1 million to Oakland. DeAngelo, who prosecutors have labeled a profiteer, wouldn't disclose his annual salary or monthly rent payments.
The dispensary has done more than just pump tax dollars in local economies. In Oakland, Harborside has become an active corporate citizen contributing to civic organizations and charity drives. Its ties to the city were evident Thursday when DeAngelo held a defiant news conference inside City Hall with an official city of Oakland banner behind him.
Councilmember Rebecca Kaplan said prosecutors should focus on getting guns off Oakland's streets and warned that losing Harborside meant "less police walking the beat." City Attorney Barber Parker released a statement critical of federal prosecutors and a union leader read a statement from Rep Barbara Lee, D-Oakland, calling the move against Harborside "nothing short of tragedy."
Harborside is by far the largest of Oakland's four dispensaries. San Jose has about 100 dispensaries and Harborside accounts for a much lower percentage of the city's tax revenue from medical cannabis operations.
San Jose Mayor Chuck Reed said Thursday that "It would be premature ... to comment on the U.S. Attorney's action given that we haven't seen the evidence or results of their investigatory work."
Staff writer Tracy Seipel contributed to this report. Contact Matthew Artz at 510-208-6345.