Melinda Haag, US Attorney for Northern California.
Several California congressional representatives issued a statement Friday accusing the Department of Justice of "not acting within the spirit or letter of the law" in its pursuit of a three-year-old legal case aimed at shutting down Harborside Health Center, one of the country's largest and most respected pot dispensaries.
"As Members of Congress we have watched the public acceptance of medical marijuana develop and grow while the Federal policy on it stagnates," wrote Reps. Sam Farr, Dana Rohrabacher, and Barbara Lee.
In 2012, US Attorney Melinda Haag initiated civil forfeiture proceedings against Harborside, which does $25 million a year in sales, on the grounds that it had grown too big. The move came as shock to many in California's medical marijuana industry; Harborside was widely viewed as one of the state's most ethical and legally compliant dispensaries. A few months later, the City of Oakland sued to block Haag's case, arguing that shutting down Harborside would create a public health crisis.
"It's clear now that Melinda Haag is the real criminal," says Harborside founder Steven DeAngelo.
The following year, the Justice Department issued a memo laying out a more permissive federal policy on pot, and federal prosecutors dropped similar civil forfeiture proceedings against several dispensaries in Los Angeles. But in Northern California, Haag pressed on with her case against Harborside and the Berkeley Patients Group, another large, well-respected dispensary.
Motivated in part by Haag's prosecutions, Reps. Farr and Rohrabacher won a provision in December's federal appropriations bill that blocks the DOJ from spending money to prosecute medical marijuana dispensaries or patients that abide by state laws. The move was expected to be the nail in the coffin for Haag's pot cases. But on February 3, she appeared before 9th Circuit Court of Appeals to push the case forward, arguing that the City of Oakland shouldn't be allowed to challenge the proceedings.
"It's clear now that Melinda Haag is the real criminal in the Harborside case," says Harborside founder Steven DeAngelo. Haag's office could not immediately be reached for comment.
The DOJ's ongoing pursuit of the case has led to much debate about Haag's motivations. Some observers wonder if she's simply a dyed-in-the-wool drug warrior. Others speculate that the DOJ sees the case as a way to continue to discourage the expansion of marijuana businesses in California, where pot laws are notoriously loose and decentralized.
"It can be dismaying to me as a businessperson to have these persistent attacks keep coming at Harborside and see most of the rest of the industry not similarly targeted," DeAngelo says. "But I did not get into this industry to make lots of money, I got into this to make cannabis legal. And I think we are gong to win."
Despite the legalization of medical marijuana in 30 states, the federal government still lists cannabis under Schedule I of the Controlled Substances Act, which means that it has "no currently accepted medical use and a high potential for abuse." But today, the nation's new top doctor appeared to challenge that designation.
"We have some preliminary data showing that for some medical conditions and symptoms that marijuana can be helpful," Surgeon General Vivek Murthy told CBS This Morning. "So I think we have to use that data to drive policymaking, and I'm very interested to see where that data takes us."
Here's the full interview (Murthy's comments on medical marijuana start at 3:48):
Sitting atop San Francisco's Nob Hill last week, in a banquet room of the opulent Fairmont Hotel, I began thinking maybe I ought to invest in marijuana. "You really should," said a woman at my table, who reminded me, in her wholesome, middle-aged earnestness, of my mom. About a year ago she poured money into Poseidon Asset Management, a marijuana hedge fund that requires a minimum investment of $100,000. The fund earned a 67 percent return in 2014, besting the S&P 500 by a factor of six. Now she's trying to figure out what to do with all of her extra cash.
As we talk, dozens of professional investors are listening to a handful of suit-wearing pot entrepreneurs compete onstage for start-up funding. There's SweetLeaf, an organic edibles company that will target the Whole Foods demographic; Intelligent Light Source, a maker of hydroponics lamps that has ties to MIT; and VapeXHale, a high-end vaporizer controlled by an iPhone app. I'm feeling pretty good about all of them, not least because they've already been vetted and incubated by the ArcView Group, the gathering's organizer and a sort of Y-Combinator for pot startups.
In this week's New Yorker, Alec MacGillis discusses Jeb Bush's approach to education reform, the realm in which Bush, as Florida's governor, had sought to make his biggest mark. In 1995, his efforts to improve the state's public schools catalyzed his political career and, later, fueled competition with his brother George, who as president rolled out the No Child Left Behind Act:
Jeb Bush made it known that he thought his own approach superior, because it sought to grade schools on improvements in individual students' scores, rather than just on schools' performance in a given year. "There were lots of conversations about the work in Texas and how Florida had improved on that," [school superintendent Jim] Warford said. According to education officials, Jeb's team had little respect for Rod Paige, the former Houston schools superintendent whom George W. Bush had named Secretary of Education. "It was a little prickly in Florida," Sandy Kress, who worked on the implementation of No Child Left Behind, said. "It was 'We're going to do it our way and can do it better.'"
Their sibling rivalry notwithstanding, the Bush bros have common ties to one particularly controversial educational entrepreneur. Starting in the late 1990s, Randy Best, whom I profiled at the end of George W. Bush's second term, used his connections to the president to transform a virtually unknown for-profit education company, Voyager, into a "selling juggernaut" (in his words) that he unloaded in 2005 for $360 million.
Randy Best Steve Brodner
The key to Voyager's success was the way it it used revolving doors in Bush's Education Department to game the procurement process. Its dealings prompted a scathing DOE inspector general's report in 2006 and a harshly worded Senate report the following year. "Many programs, including Voyager, were probably adopted on the basis of relationships, rather than effectiveness data," G. Reid Lyon, who co-wrote the No Child Left Behind Act and later consulted for Best, told me in 2008. "I thought all this money would be great; it would get into schools. But money makes barracudas out of people. It's an amazing thing."
The controversy surrounding Voyager didn't dissuade Best from starting another education company. Founded in 2005, Academic Partnerships persuades colleges to outsource to the firm their degree programs in subjects such as business and education, which it puts online in exchange for a hefty chunk of the profits. Nor did Voyager dissuade Jeb Bush from partnering with Best. Here's MacGillis:
Best needed someone to lend credibility to the company. Florida had spent heavily on Voyager during Jeb Bush's governorship, and, in 2005, when Bush was still in office, Best spoke with him about going into the education business. By 2011, Bush had joined Academic Partnerships as an investor and an adviser, and he became the company's highest-profile champion. Best told the Washington Post that Bush's annual salary was sixty thousand dollars, but he did not disclose the terms of Bush's investment stake. For the first time, Bush was making money in an educational enterprise.
Last month, after announcing his intent to run for president, Bush resigned from Academic Partnerships and several other business affiliations. Yet if Bush's family history is any guide, Randy Best 2.0 is just getting started.
It's Friday afternoon in San Francisco and, to be honest, I'm sick of being in the office. So I've slipped out and headed over to Union Square Park, where I'm sitting on a bench watching Japanese tourists taking selfies on the ice rink. But before you call me a slacker, you should know I'm also online and working, courtesy of the free wireless internet service the city provides.
Since October, visitors to most San Francisco parks as well as a stretch of Market Street, the city's main business corridor, have been able to access the city's fast-growing municipal broadband network. City-owned networks have been gaining popularity nationwide as a way to bridge the digital divide between rich and poor, foster competition with cable companies, and provide high-speed internet in underserved areas. Last week, President Barack Obama talked them up as a way to promote "better products and cheaper prices." In Tuesday's state of the union speech, he pledged to bring the internet to "every community and help folks build the fastest networks, so that the next generation of digital innovators and entrepreneurs have the platform to keep reshaping our world."
But there's one big obstacle to all of this: the telecom industry and its friends in Congress.
For $70 a month, Chattanooga offers its residents internet service at 10 to 100 times the speed of what most ISPs provide their customers.
At least 19 states have passed laws limiting municipal and community broadband projects, typically at thebehest of big internet service providers and their trade groups. The legislation ranges from outright bans to laws that limit public broadband to small towns or places where there's no other high-speed service available. The Federal Communications Commission may soon invalidate these laws, but not if Republicans in Congress can stop it. In July, GOP Rep. Marsha Blackburn of Tennessee inserted into an appropriations bill an amendment that would strip the FCC of its authority over state municipal broadband regulations.
Some Republicans have branded municipal broadband as a form of socialism, because it uses public funds to compete with the private sector. They also say that local governments aren't tech-savvy enough to build and maintain their own networks. As an example, they often cite Utah's unfortunately named Utopia, a fiber-optic network funded by a consortium of 11 municipalities that loses millions annually. "When a state determines that municipalities should be limited in experimenting in the private broadband market, it is usually because the state had a good reason," Blackburn recently wrote in the Tennessean.
Although Blackburn doesn't talk much about it, the Tennessee town of Chattanooga just so happens to host the nation's largest and most successful municipal broadband network. Chattanooga's power utility (and now internet provider) offers internet service to 160,000 households at speeds up to 1 gigabit per second—10 to 100 times faster than what's available in most of the country—at a mere $70 a month.
A Missouri GOP state legislator would make cities hold an election before creating a broadband network.
As the Guardiannotes, it takes just 33 seconds to download a two-hour, high-definition movie in Chattanooga, compared with 25 minutes for the average US high-speed broadband household. The service has earned rave reviews and has even spawned a local tech boom. Neighboring communities now want to join the network but a state law prohibits it from growing beyond city utility line boundaries. (For more about community networks, read Clive Thompson's "How to Keep the NSA Out of Your Computer.")
Chattanooga's project got rolling after city leaders learned that the telecoms wouldn't be offering local service for a decade or more. Indeed, city networks are often built in places too small to attract the interest of the big telecom players—cities such as Lafayette, Louisiana; Wilson, North Carolina; and Longmont, Colorado, all of which have decided that high-speed internet is as essential to the economy as electricity, water, and sewer service.
For more on how municipal broadband helps fill gaps in America's shoddy internet service, check out the first minute of this explainer from Vox:
Most state laws restricting municipal broadband were passed between 1996 and 2004, a fast and furious time for broadband development. The tide began to turn the following year, when advocates fended off restrictions in about a dozen states. But the assault picked up again in 2011, when North Carolina passed a law making it harder for cities to create their own networks. South Carolina followed suit in 2012. This year, Missouri state representative Rocky Miller, a Republican, has proposed a bill that would make large towns and cities get voter approval before building municipal broadband—and bar them from using revenues from other town services to cover the costs. (Miller has received $4,700 from donors in the telecom services and equipment industries.)
Today, Senator Cory Booker (D-N.J.) introduced the Community Broadband Act, a bill that would make it illegal for states to limit municipal broadband through regulations or state legislation.
"We are not going to stop, probably, until all of San Francisco is connected to the internet."
In California, where cities face no such restrictions, San Francisco is aggressively expanding its network. An ordinance passed last year requires the city to attempt to install its own fiber cables or conduits anytime a street is torn up. In the short term, leaders are talking about wiring the city's waterfront, all of Treasure Island, and other commercial corridors. "We are not going to stop, probably, until all of San Francisco is connected to the internet," says Ron Vinson, the city's chief marketing officer.
Like many cities, San Francisco already has a robust fiber network in place to serve government offices. Vinson believes that the $1.7 million that the city has spent to outfit its network with public wifi (not including a $600,000 grant from Google) is totally worth it. "There's absolutely no downside being able to provide access to the internet, whether you are parking your car or waiting for a MUNI bus," he says. "It's one of those fundamental things. We fill potholes, we clean the streets, and yes, now we provide wifi. And our citizens expect that."