August 31, 2012

Spooked By Federal Warning, Landlord Tries to Evict Well-Known Dispensary From San Jose Property

Image of Harborside Health Center

Another day, another challenge for Harborside Health Center.

The beleaguered Oakland-based dispensary – which ranks as one of the largest medical marijuana centers in the country – is now at odds with the landlord of its San Jose location. Concourse Business Center has asked a federal judge for help in booting Harborside from its property, saying the dispensary refused to comply with a 30-day notice to stop cultivating, selling and handling marijuana in the building.

Keep a close eye on how this develops, as it could dictate what happens in disputes between landlords and dispensaries in other cases tied to civil forfeiture warnings.

Harborside was in good standing with Concourse Business Center until July, when the Drug Enforcement Agency threatened to seize the assets of both the dispensary and its landlords. Federal officials offered a vague justification for targeting Harborside, saying simply that it is violating federal law by growing and selling cannabis (even though thousands of other dispensaries across the country are doing the exact same thing). The IRS also went after Harborside recently, ruling after a protracted audit that the dispensary owes more than $2 million in back taxes.

Upon learning of the government’s civil forfeiture threats, Concourse Business Center gave Harborside the 30-day notice to stop handling marijuana at the location. But the landlord claims that Harborside has “failed and refused to cease cannabis sales at the property” within the 30-day period, and Concourse Business Center is now “committed to taking all reasonable measures to cause Harborside to cease illegal activity at the property,” according to Courthouse News Service.

Harborside remains open in both San Jose and Oakland, and the dispensary previously said that it would continue to do so unless it is “physically prevented” from operating. The dispensary’s landlord in Oakland hasn’t issued an ultimatum and is standing by Harborside, at least for now.

Harborside rose to national fame after it was featured on the Discovery Channel reality TV show “Weed Wars.” Executive Director Steve DeAngelo – a long-time marijuana advocate – will speak at the upcoming National Marijuana Business Conference on how the industry must focus on wellness over intoxication.

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