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Chem Tales: Superman Falls 

Wednesday, Aug 19 2015
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His indictment is barely a week old, but many of his former friends in organized labor and the cannabis industry have already buried Dan Rush.

Rush, 54, was once the gregarious director of the United Food and Commercial Workers' national medical cannabis and hemp division; on Aug. 10, he was indicted in federal court on two felony counts of violating labor law.

The lifelong union man — the first labor organizer to make a serious effort to bring the nascent marijuana industry on board in 2010 — is accused of selling out those same workers in order to pay off a debt.

In January 2010, before UFCW had signed up a single trimmer, budtender, or joint-roller, Rush allegedly took a $600,000 cash loan from an Oakland marijuana grower in order to pay off a private hard-money loan that Rush had taken out on his home.

After informing the grower that he'd be unable to repay, Rush allegedly offered services in kind. Rush would help his lenders open a new dispensary in Las Vegas and ensure the dispensary would never be union, according to an affidavit filed by the FBI.

The FBI had been looking into Rush since 2012, following a tip from his creditors, who include the owners of a local dispensary and officers from Terra Tech, one of the largest publicly-traded cannabis companies in the country.

UFCW wasted no time in parting with Rush, informing the media on the day the indictment became public that Rush had been "terminated."

Rush did not respond to a message seeking comment. Out on bail, he's been active on social media, posting on Facebook support for the union and "our members."

His attorney, William Osterhoudt, noted in a statement to the press that the indictment is based on the testimony of "informants" and "cooperators." "[He] should not be vilified or deprived of his livelihood on the basis of unproven accusations," Osterhoudt wrote.

"We don't want to pre convict him ... but these charges are very disappointing," said Dale Sky Jones, who worked with Rush on the Prop. 19 legalization campaign in 2010.

Jones is chairwoman of the Coalition for Cannabis Policy Reform — ­one of the groups working to legalize cannabis in California on next year's ballot. Rush was a board member of CCPR until last year.

Here are some initial takeaways.

Rush was everywhere. He had a hand in Prop. 19, he pushed to expand Oakland and Berkeley's number of allowed cannabis dispensary permits, he lobbied and organized in support of union dispensaries in San Francisco, and he was a big backer of Measure D, the controversial ballot initiative that limited the number of dispensaries in Los Angeles. As of press deadline, he was still a sitting member of the city of Berkeley's Medical Cannabis Commission. He also had a close enough relationship with Lt. Gov. Gavin Newsom to have Newsom, now legalization's top public proponent, appear at his labor events.

Rush was also involved in the efforts to legalize medical marijuana in New York and Minnesota. Other UFCW operatives are lobbying for legalization in Ohio. That such a player has been indicted will only help the prohibitionists.

The cannabis industry hasn't grown up yet. All week, marijuana industry insiders have been buzzing about the case and lobbing harsh words — but not at Rush. Instead, they're angry at Carl Andersen, Martin Kaufman, and Derek Peterson, the three cannabis industry players who went to the FBI. (None appear queued up for indictments).

Kaufman is a big-time grower by reputation. Peterson is CEO of publicly traded Terra Tech, which has four dispensary permits in Nevada. Peterson and business partner Salwa Ibrahim are the owners of Blum dispensary in Oakland. Blum is also applying for a permit in Berkeley.

For going to the authorities and cooperating with the FBI against Rush, they've been branded as "snitches." This is an industry that wants to be legit and play by the rules, but some black market habits die hard.

Rush was not great with money. Always quick to pick up a check for his industry colleagues, Rush was known for spending lavishly. "He was a baller," one industry insider told me. He also filed for Chapter 13 bankruptcy protection in 2005, an affair that had just wrapped up by the time he allegedly took his first cash loan from Kaufman. According to the affidavit, he spent $2,000 a month on bills, flights, jewelry, cigarettes, and at "Indian casinos." This could just be a story of one man unable to manage his finances.

He had real connections to the Hells Angels. Rumors of close ties to the Oakland-bred motorcycle club have dogged Rush for years, and with good reason. In addition to growing up with Angels and riding with Angels, Rush also paid the motorcycle club's cell phone bills, according to his indictment. Why he did this, and whether it was a quid pro quo arrangement, nobody can say, though "biker gangs" have been involved with the illicit marijuana industry since the 1960s.

More indictments are coming. Oakland labor attorney Marc Terbeek allegedly gave Rush kickbacks in return for Rush sending clients his way. Terbeek also aided the FBI by wearing a wire and having his phone tapped when talking with Rush. Terbeek is cooperating with authorities but may yet be indicted, the FBI affidavit suggested. He may not be alone.

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About The Author

Chris Roberts

Bio:
Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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