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Oakland City Attorney Warns on Pot Farm Legality

City Attorney John Russo
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City Attorney John Russo
Sources say John Russo sent memo warning City Council of potential pitfalls in city's marijuana cultivation plans

Oakland City Attorney John Russo sent a memo to the Oakland City Council last week warning that federal officials have concerns about the city’s plans for giant pot farms, according to multiple City Hall sources.

The memo was vague and didn’t outline specific concerns, according to these sources, who spoke on the condition of anonymity. 

It came after Russo’s meeting with federal officials, the details of which were reported by California Watch yesterday. Quoting two unnamed sources, California Watch reported that federal officials met with the Oakland city attorney last month to voice their concerns about an ordinance that would permit four enormous medical pot farms in Oakland. 

The city is in the midst of taking applications for the pot farms. Berkeley, too, is moving ahead with large-scale cultivation permits.

The relationship between federal law enforcement and medical marijuana operations has been testy over the years. Under the Bush administration, the feds would often prosecute dispensaries. Under the Obama administration, Attorney General Eric Holder announced in 2009 that the feds would no longer be raiding dispensaries that were legal under state law.

But the pot farms have raised new concerns. Some legal observers, including Bill Panzer, a lawyer who wrote the state’s seminal medical marijuana law, have said that the pot farms don’t comply with the state law that requires medical pot operations to be not-for-profit collectives of patients and caregivers.

Russo refused to sign off on the pot farm legislation, normally a formality, and issued a memo in August raising legal concerns about the ordinance, according to multiple sources who’ve seen it.

However, Russo also supported Proposition 19, the effort to legalize marijuana. And according to Larry Reid, an Oakland City Council member who co-authored the pot farm legislation with Council member Rebecca Kaplan, Russo’s office helped draft the ordinance.

Oakland City Council President Jane Brunner said the Council needs to discuss the legal issues raised by the pot farm ordinance, which the city hopes will spur a tax-generating industry. Brunner noted that when the city went ahead with the medical marijuana dispensaries – now an established business – it was also a legal gray area.

“When we did dispensaries, we were on the cutting edge,” said Brunner. "In this case, we should know what were getting into; we shouldn't go into this blindly.”

Brunner said that Russo’s missive in August was vague, outlining concerns in federal and state law. “For me it didn’t have enough information,” she said.

Alex Katz, a spokesman for Russo, confirmed late Tuesday that the memo had been sent to the City Council but declined to detail the contents, citing attorney-client privilege. It consisted of the August memo along with a cover letter. 

A lawyer from the U.S. Attorney’s Office decline to comment on the Oakland ordinance, California Watch reported, but said in general that there are concerns that some operators are using medical marijuana laws as a cover. 

Federal Drug Enforcement Administration officials contacted the city to find out about the ordinance over the summer. DEA spokesman Rusty Payne told The Bay Citizen at the time: “I will say this: We are certainly going to be very, very interested in any large-scale marijuana cultivation that’s going on."

In Berkeley, the city attorney wrote and signed off on a measure passed overwhelmingly that will allow for six 30,000-foot marijuana growing operations in the city’s warehouse district.

Julie Sinai, the chief of staff to Mayor Tom Bates, said that as far as she knows the feds have raised no concerns about Berkeley’s cultivation plans. 

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