Feds raid Oaksterdam University, founder's home

A federal agent carries bags of cannabis out of a building around the corner from the Oaksterdamn University and protestors A federal raid took place at Oaksterdamn University in Oakland on Monday, April 2, 2012. less A federal agent carries bags of cannabis out of a building around the corner from the Oaksterdamn University and protestors A federal raid took place at Oaksterdamn University in Oakland on Monday, April 2, ... more Photo: Sean Culligan, The Chronicle Photo: Sean Culligan, The Chronicle Image 1 of / 20 Caption Close Feds raid Oaksterdam University, founder's home 1 / 20 Back to Gallery

Dozens of federal agents on Monday raided the Oakland businesses and apartment of Richard Lee, the state's most prominent advocate for the legalization and regulation of marijuana, carting away loads of pot and belongings but not revealing the purpose of their investigation.

The agents targeted Oaksterdam University, the internationally famous school that Lee established to train people in the marijuana industry, a medical cannabis dispensary called Coffeeshop Blue Sky, and three properties being rented by Lee, including his apartment near Lake Merritt.

The armed and sometimes masked agents from the U.S. Internal Revenue Service, the U.S. Drug Enforcement Agency and the U.S. Marshals Service came with a battering ram, a sledgehammer, power saws and a locksmith.

They left Oaksterdam University carrying numerous file boxes, a safe and black trash bags. From other downtown properties, agents carried away sacks with dozens of marijuana plants.

"This is really an attack on regulation," said Dale Sky Jones, executive chancellor of Oaksterdam University. Without regulation, she said, "what's going to change is who is selling it, the good guys or the bad guys."

Lee and four employees were temporarily detained, according to Oaksterdam officials.

Little explanation

Arlette Lee, an IRS spokeswoman, said she could not say why the agents were there other than to confirm that they were serving a federal search warrant.

Messages left late Monday for the DEA and the Marshals Service were not returned.

Supporters of the Oaksterdam founder said they believe he is being targeted because of his high profile in California's medical marijuana industry. He has advocated taxing and regulating medical cannabis for years, and his efforts have helped make Oakland the industry's statewide political seat of power.

In 2003, the city became the first in the nation to regulate dispensaries, and Lee obtained one of the initial four dispensary permits for Coffeeshop Blue Sky. The next year, Oakland voters passed Measure Z, making possession of small amounts of pot the lowest priority for police, and in 2009 Oakland voters passed a measure to tax and regulate cannabis businesses - the first such tax in the country. Lee helped push for both measures.

Lee's operations may not be the biggest in Oakland - that would be Harborside Health Center, which took in $21 million in sales in 2009 and had triple the income of the city's other three dispensaries combined that year.

Political motive?

Lee supporters said they see a political motive in Monday's crackdown.

It was Lee, after all, who in 2010 bankrolled Proposition 19, a statewide measure which would have legalized adult use of marijuana, regardless of medical necessity. Some 46 percent voted for the measure, the highest ever for any general pot legalization proposal in the country.

"They want to make sure he never again has the resources to do that," said Stephen DeAngelo, Harborside's co-founder and executive director. "Rich is not a profiteer. He is not a renegade ... Richard Lee is the most legitimate and real person in this industry."

Harborside, which DeAngelo said paid more than $3 million in local, state and federal taxes last year, is in litigation with the IRS about whether it should pay an additional $2.5 million for 2007 and 2008.

"They want to tax us out of existence," DeAngelo said. Monday's raids, he said, would not change Harborside's commitment to providing medical marijuana to its patients.

All of Monday's raid locations were at or near 17th and Broadway, and hundreds of Oaksterdam supporters swarmed there in protest over the course of the day. The demonstrators openly smoked joints and bongs in defiance, shut down streets, pounded on unmarked police vehicles and heckled agents.

Protesters arrested

One agent who shoved several protesters got shoved back by a protester on 17th street near Franklin Street. Several agents then tackled the protester and arrested him. At least one other demonstrator was also arrested.

Councilwoman Rebecca Kaplan came to watch the raids and called them a waste of resources. Oakland's dispensaries, which have a bevy of regulations, have not had the crime or nuisance problems of other cities, and bring in needed revenue, she said.

"Strong oversight and strong rules can succeed," she said. "Maybe the feds can go to other cities that do have problems."

The U.S. attorney in San Francisco, Melinda Haag, and her three counterparts in the state said in October that they would aggressively prosecute many marijuana dispensaries as profit-making criminal enterprises. Since then, three dispensaries in San Francisco, one in Marin County and 50 in the city of Sacramento have closed under pressure, along with about 150 others throughout California.

Haag has said her concern is pot stores that go beyond medical use or operate near schools or playgrounds.

"People are using the cover of medical marijuana to make extraordinary amounts of money," Haag said in October. "None is immune from action by the federal government."