Oakland’s pioneering Harborside cannabis dispensary is probably the most influential cannabis dispensary in America. Founded in 2006, it went on to become the world’s largest dispensary, spawn its own reality show, be defended by members of Congress before weed was legal and eventually pave the way for marijuana legalization.
But on Friday, Harborside is broke. The dispensary has gone from a poster child for cannabis reform to another example of the deep financial woes of the California cannabis industry.
Harborside’s parent company StateHouse Holdings has over $100 million of debt, nearly as much as its total assets. One of the company’s lenders asked a California judge on Thursday to place the company into receivership, according to Green Market Report.
Receivership involves a court-appointed manager selling off a company’s assets after it can’t pay back its creditors.
Other major players have also fallen victim to the high debt problems of the state’s troubled cannabis market, like the retail chain MedMen, once valued at over a billion dollars, and massive pot distributor HERBL, which also faced financial collapse.
In addition to the Harborside chain of dispensaries, StateHouse Holdings owns companies across the cannabis supply chain, including cannabis greenhouses, manufacturing facilities and product brands. While the future is uncertain for the Harborside dispensaries, both the San Francisco and Oakland retail locations were still open as of Friday morning. The company did not immediately return an SFGATE request for comment.
Harborside was founded in 2006 along an industrial stretch of coastline in Oakland and quickly became a pioneer in California’s fledgling medical marijuana industry. Harborside was the first retailer to require safety testing for all of its products, establishing quality assurance standards that are now required by law in nearly every state with legal cannabis.
Dispensary co-founder Steve DeAngelo openly conducted his business in ways that attracted widespread attention. Debby Goldsberry, a founder of Berkeley Patients Group, which opened in 1999 and is considered the longest continually operating cannabis dispensary in the country, told SFGATE Friday that Harborside was “the most important dispensary on Earth” and inspired an entire generation of cannabis activists.
“Steve DeAngelo was a force to be reckoned with, a very intelligent person and extremely charming personality. People wanted to know about what he was doing,” Goldsberry said.
DeAngelo and his brother Andrew ran the dispensary together but were pushed out of the company after it merged into StateHouse Holdings. They were not immediately available for comment on Friday.
Harborside was one of the most prominent symbols of California’s cannabis industry during the 2010s, which was a period of intense legal turmoil. Federal authorities under the Obama administration increased enforcement of federal cannabis prohibition despite growing public support for the medical marijuana access organizations like Harborside were providing at the time.
Harborside was famously sued by federal agents in 2012 who called the business a “marijuana superstore” and claimed it was violating federal tax law. Members of Congress came out in support of the dispensary and the feds eventually dropped their case four years later.
Goldsberry, who was running a dispensary in Oakland at the time, said the federal agents came after DeAngelo specifically because he was so “bravely” standing up for medical marijuana.
“He had inspired everyone who came after him. He was huge. That’s why the tax agencies came so hard after him,” Goldsberry said.
H/T: www.sfgate.com
