Global Ganja Report

Federal agents from the DEA and IRS, backed up with Santa Barbara police, served search warrants at a medical marijuana dispensary and a grow house on May 2 and 3. No arrests were made, but search warrants were executed at the Pacific Coast Collective dispensary and, the next morning, at 305 E. Haley St., which was named as a grow house. Agents and detectives also searched the residences of PCC operator Charles Jeff Restivo in Carpinteria, who is already facing local felony charges related to the dispensary; and Steven Kessler in Santa Barbara, who was said to operate the cultivation site.

A coalition of medical marijuana patients, activists, dispensing centers, and concerned citizens has compelled public officials to stand up to recent federal attacks. Last week, the new coalition "San Francisco United for Safe Access" held a press conference with several city supervisors and state officials, decrying the Obama administration's aggressive tactics before a crowd of more than 500 supporters. By Friday April 6, San Francisco United had secured a statement from Mayor Ed Lee, expressing his opposition to "recent federal actions targeting duly permitted medicinal cannabis dispensaries...that aim to limit our citizens’ ability to have safe access to the medicine they need."

The IRS has ordered Oakland's Harborside Health Center, biggest cannabis dispensary on the West Coast, to pay $2 million in taxes, ruling that the collective may not deduct standard expenses such as payroll and rent. "They're attempting to tax us out of business," protested owner Steve DeAngelo. Ironically, the same day he received the IRS letter, DeAngelo was photographed handing the Oakland treasury a $360,000 check —third installment of $1 million in city taxes  Harborside generated in 2010.

The IRS is believed to have opened audits on at least 12 medical cannabis dispensaries in California under the determination that past deductions are invalid because of a clause in the federal tax code prohibiting any enterprise that traffics in Schedule I or II drugs from making business deductions. The move could bankrupt every dispensary that it targets. The first dispensary to receive a final audit decision from the IRS is the Marin Alliance for Medical Marijuana (MAMM) in Fairfax.

Oakland's Harborside Health Center, the self-proclaimed world's largest cannabis dispensary—handling an annual $22 million in transactions—is being audited by the US Internal Revenue Service. Since late last year, the IRS has been auditing 2008 and 2009 federal tax returns for the Oakland location, one of two outlets Harborside operates for 70,000 medical cannabis users. The other facility is in San Jose.