Obama's War On Weed In California: Cannabis Crackdown Has Dire Economic Consequences

LOS ANGELES, CA - JULY 25:  Marijuana plants grow at Perennial Holistic Wellness Center medical marijuana dispensary, which o
LOS ANGELES, CA - JULY 25: Marijuana plants grow at Perennial Holistic Wellness Center medical marijuana dispensary, which opened in 2006, on July 25, 2012 in Los Angeles, California. The Los Angeles City Council has unanimously voted to ban storefront medical marijuana dispensaries and to order them to close or face legal action. The council also voted to instruct staff to draw up a separate ordinance for consideration in about three months that might allow dispensaries that existed before a 2007 moratorium on new dispensaries to continue to operate. It is estimated that Los Angeles has about one thousand such facilities. The ban does not prevent patients or cooperatives of two or three people to grow their own in small amounts. Californians voted to legalize medical cannabis use in 1996, clashing with federal drug laws. The state Supreme Court is expected to consider ruling on whether cities can regulate and ban dispensaries. (Photo by David McNew/Getty Images)

SAN FRANCISCO -- It's been less than a year since the Obama administration launched an aggressive crackdown on medical marijuana in California, and the government's actions have already taken a significant toll on the economy.

Since Department of Justice officials announced last October that they would be going after cannabis operations throughout the state, hundreds of dispensaries from San Diego to Yuba County have been forced to shut down. Thousands of employees at said businesses have lost their jobs as a result, and California is losing out on much-needed sales tax revenue.

"The average dispensary employs half a dozen to ten people and has gross revenues on the order of $500,000 to $1 million per year," Dale Gieringer, director of the California chapter of the National Organization for the Reform of Marijuana Laws (NORML), told The Huffington Post. "Therefore we are talking about thousands of legal jobs and tens of millions in tax revenues lost."

Though the drug remains illegal under federal law, California became the first state to legalize cannabis for medicinal purposes when voters passed Proposition 215 in 1996. Recent figures released by Americans for Safe Access (ASA), a national coalition dedicated to promoting legal access to the plant, revealed that medical marijuana sales generate upwards of $100 million in annual tax revenues for the state.

California's coffers could certainly benefit from that money. State leaders are struggling to close a foreboding $16 billion budget deficit. Governor Jerry Brown has repeatedly warned that if voters fail to pass his plan to temporarily increase taxes in November, he will be forced to implement severe cuts to schools and public safety services.

But federal officials have plunged ahead with their war on weed, sending threatening letters to dispensaries across the state warning that their storefronts operate too close to parks and schools. Oakland's Harborside Health Center, known as the "nation's largest pot shop," has been targeted for closure simply because it's too big.

Harborside brings in some $20 million each year and employs more than 100 workers. Since Oakland imposes a five percent business tax on cannabis, its shuttering would not only cost the city dozens of jobs, but more than $1 million in potential revenues.

Meanwhile, U.S. Attorney Melinda Haag has been seeking information about every dispensary currently open in San Francisco. The city has lost nearly half of its pot shops in the past year -- nine have been forced to close since October. This summer, two dispensaries known for their close-knit communities of patients, The Vapor Room and HopeNet, shut down.

During his time on the campaign trail and shortly after taking office, President Obama and other high-level members of his administration repeatedly stated that they would not go after marijuana operations in states that had legalized cannabis for medicinal purposes. The reasons behind the government's about-face largely remain unclear.

"I can't speak for the Obama administration; I can't speculate," said ASA spokesman Kris Hermes. "The federal government is not giving up and it's absolutely puzzling why they would put so many thousands of patients into harm's way."

Hermes pointed out that many patients have been forced to purchase marijuana using illegal means or simply go without, a plight highlighted in a recent video featuring a variety of regular Harborside customers. "People should be able to benefit from a medicine that is legal under their own state's law," he added.

Obama broke his relative silence on the issue in interview with Rolling Stone in April. "What I specifically said was that we were not going to prioritize prosecutions of persons who are using medical marijuana," the president said. "I never made a commitment that somehow we were going to give carte blanche to large-scale producers and operators of marijuana."

Hermes disagrees that the federal government has only been targeting a specific type of business. "It's an indiscriminate attack. They arent going after dispensaries that are breaking state law; they're investigating all of them," he explained. "They've been pretty effective at intimidating the entire medical marijuana community. Much more so than Bush was during his time in office."

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