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DEA and IRS Raid Oaksterdam University, Medical Marijuana Institution

Medical marijuana facilities at risk of DEA and IRS raids (photo: O'Dea)

This morning agents from both the Drug Enforcement Agency and the Internal Revenue Service raided Oaksterdam University, one of California’s most famous medical marijuana institutions. From NBC Bay Area:

Oakland’s Oaksterdam University was taken over by federal officials Monday morning.

Officers wearing U.S. Marshals, IRS and DEA jackets swarmed the Oakland medical marijuana facility on Broadway before 8 a.m. Investigators put yellow crime tape around the entire building.

Just after 9 a.m. agents brought out trash bags of unknown materials to a waiting van.

The presence of the IRS in addition to the DEA at this raid should be concerning to people involved in medical marijuana. The IRS recently contended that federal law prevents medical marijuana businesses from qualifying for standard business tax deductions that all other companies take, such as rent and payroll.

Based on this ruling last year the IRS went after Harborside Health Center, another of California’s most prominent medical marijuana businesses, claiming it owed $2.5 million in back taxes. If the IRS starts aggressively enforcing this position, it could become financially impossible for medical marijuana businesses to operate; it means those currently in business could owe huge amounts in back taxes.

This raid likely represents yet the latest escalation in the Obama administration’s multi-agency war on medical marijuana. Oaksterdam University was founded by Richard Lee, the main sponsor of the failed 2010 marijuana legalization ballot measure, Proposition 19. Richard Lee and Steve DeAngelo, the chief executive of Harborside, are probably two of the most high profile individuals in California’s medical marijuana community.

Update II.  The LA Times also reports that authorities searched the home of Richard Lee in conjunction with this action.

Update I: The video below was taken shortly after the raids.

 

CommunityJust Say Now

DEA and IRS Raid Oaksterdam University, Medical Marijuana Institution

This morning agents from both the Drug Enforcement Agency and the Internal Revenue Service raided Oaksterdam University, one of California’s most famous medical marijuana institutions. From NBC Bay Area:

Oakland’s Oaksterdam University was taken over by federal officials Monday morning.

Officers wearing U.S. Marshals, IRS and DEA jackets swarmed the Oakland medical marijuana facility on Broadway before 8 a.m. Investigators put yellow crime tape around the entire building.

Just after 9 a.m. agents brought out trash bags of unknown materials to a waiting van.

The presence of the IRS in addition to the DEA at this raid should be concerning to people involved in medical marijuana. The IRS recently contended that federal law prevents medical marijuana businesses from qualifying for standard business tax deductions that all other companies take, such as rent and payroll.

Based on this ruling last year the IRS went after Harborside Health Center, another of California’s most prominent medical marijuana businesses, claiming it owed $2.5 million in back taxes. If the IRS starts aggressively enforcing this position, it could become financially impossible for medical marijuana businesses to operate; it means those currently in business could owe huge amounts in back taxes.

This raid likely represents yet the latest escalation in the Obama administration’s multi-agency war on medical marijuana. Oaksterdam University was founded by Richard Lee, the main sponsor of the failed 2010 marijuana legalization ballot measure, Proposition 19. Richard Lee and Steve DeAngelo, the chief executive of Harborside, are probably two of the most high profile individuals in California’s medical marijuana community.

Update II.  The LA Times also reports that authorities searched the home of Richard Lee in conjunction with this action.

Update I: The video below was taken shortly after the raids.

 

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is now living in the Washington DC area. He created a politics and policy blog, The Walker Report (http://jwalkerreport.blogspot.com/).