Richard Lee said he will relinquish ownership of his marijuana-related businesses, including Oaksterdam University, as he braces for a possible federal indictment on tax charges.
“I think with my legal issues, it’s the best thing,” Lee said Friday. “I’ve been on the front lines for 20 years. I think I’ve done my duty and it’s time for other people to take over.”
Lee is one of the nation’s foremost medical marijuana advocates, leading the movement to tax and regulate the drug and bankrolling Prop. 19, the failed 2010 statewide ballot measure that would have legalized it.
Federal authorities, including agents with the Drug Enforcement Agency and Internal Revenue Service, raided Lee’s home near Lake Merritt early Monday as well as his four downtown Oakland storefronts, hauling away computers, files and pot plants, and leaving behind little more than office furniture.
The raid was the highest profile move against California’s medical marijuana establishment since October when the state’s U.S. Attorney’s announced new enforcement measures that have resulted in dozens of dispensaries closing down statewide.
With debts mounting, Oaksterdam University, the nation’s first cannabis industry trade school, will cease operating at 1600 Broadway as early as the end of this month. It will seek to continue operating in smaller, more affordable home, said Dale Sky Jones, the school’s executive director and prospective owner.
Lee’s Coffeeshop Blue Sky, one of four city-licensed dispensaries, will likely remain open alongside the nonprofit Oaksterdam Cannabis Museum at Broadway and 19th Street. Assistant City Administrator Arturo Sanchez said Oakland officials will work with Lee to transfer the dispensary permit to a new managing partner or a new collective that can pass background checks.
Lee’s departure is a major blow medical cannabis advocates, said Mickey Martin, who writes the Cannabis Warrior blog.
“He’s about as deep as you can go into the genealogy of cannabis activism in Oakland,” Martin said. “It’s hugely disappointing and upsetting that they’re going after one of the best operators medical cannabis has ever had.”
Lisa Gygax, an attorney focusing on marijuana law, said that Lee won respect inside medical cannabis circles for his work teaching people how to safely produce and use the drug.
“Every time you close down someone like Richard Lee, no one is cheering louder than Mexican cartels,” she said.
Lee already had been planning to divest from Oaksterdam University, which he had heavily subsidized through his dispensary, Jones said.
The school will have to change its focus to include more online classes, according to Jones. It might have to do without a brick-and-mortar presence and rent classroom space inside other buildings.
Jones doesn’t expect future federal interference since the school no longer will be tied to Lee’s dispensary. “The school itself is legal,” she said. “We still have to educate our kids not to use cannabis, educate the community how to control cannabis and educate the authorities how to regulate cannabis.”
Lee said he appeared to be at the center of a tax-crime investigation and that one of his attorneys has told him he is likely to face charges.
The IRS audited Lee in 2010 and determined that his businesses had not been eligible to deduct standard business exemption, resulting in a substantial tax penalty similar one handedout to a different Oakland dispensary last year.
Lee said he didn’t know if Monday’s raid was in response for his spearheading Prop. 19, but that he will now focus is time on similar ballot drives underway in Washington State and Colorado.
“I think we have an army now to fight back,” he said. “if we look at the history, we have more people supporting us than ever before.”
News Hawk – 420 Warrior 420 MAGAZINE
Location: Oakland, CA
Source: Mercury News
Author: Matthew Artz
Copyright: © 2012 – San Jose Mercury News