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Oakland Pot Doc Is Defrocked

It's hard to get in trouble for running a pot prescription mill in California, but one local doctor was so bad, he lost his medical license.

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Dr. Hany Youssef Assad and his NorCal Healthcare System Medical Clinic, whose main office is in Oakland, recommended marijuana to patients an estimated 40,000 times in the past seven years. It was one of the most prominent cannabis clinics in the East Bay, netting $1.2 million in revenue per year. And while it's common knowledge in California that cannabis users can get a doctor's recommendation for as little at $150 and a handshake, Assad ran such an egregiously negligent operation and had such a dark track record as a doctor — including an alleged rape and two alleged sexual batteries of patients — that the California Medical Board took the historic step of revoking Assad's license late last year.

According to the Medical Board, there are more than 99,000 physicians in California, yet Assad's case is believed to be the first in which a doctor lost his license to practice medicine for carelessly recommending marijuana. In addition, thousands of local patients now have shady recommendations from a discredited doctor and some cannabis dispensaries won't honor them.

Public records also indicate that Assad's revocation has more to do with his history of sexual abuse than pot. His drive by style examinations happen everyday. And had it not been for his proclivity for feeling up patients, Assad might still be writing scripts for cannabis in Oakland.

Nonetheless, his business, NorCal Healthcare, remains open, because a new pot doctor has taken over. The new guy, Dr. Philip A. Denney of Sacramento, also was the only person to stand up for Assad at his medical board hearing last year. Denney said he knew of Assad's sordid past, but he decided to come forward anyway because he felt that Assad's handling of the marijuana case that resulted in the revocation of Assad's medical license was correct even if his loose practices were suspect. "I struggled with it, I really did," Denney said. "I had the impression there were very real problems with Assad's practice."

For his part, Denney appears to be the polar opposite of Assad. He's an old-school clinician who insists on wearing a white doctor's coat and doing things by the book. For example, he said in a recent interview that healthy young men will have a hard time getting a recommendation for pot without bringing in their medical records that show a history of ineffective treatment for a malady. And, unlike Assad, he said he won't write recommendations for patients with mental health issues and complicated medical histories. "If you're healthy with nothing wrong with you, it's very hard for me," Denney said. "If you come in with a shopping bag full of medications, a complicated medical history and you're depressed over your breast cancer, that's harder for me. If you're in a wheelchair, it's easy."

Denney also said he intends to lead by example in an exploding field inherently attractive to profiteers, mavericks, and some downright bad doctors.


Dr. Assad's troubles began more than a decade ago, shortly after he received his license to practice medicine in California. According to medical board records obtained by the Express, the Egyptian-born and trained doctor received his California Physicians and Surgeon's Certificate Number A54309 in 1996. But then a year later, while he was working for Kaiser Permanente Medical Group in Vacaville, he started seeing patient "KS," a then 31-year-old woman with a history of migraines. She was in a troubled marriage with two small children.

From November 1997 to the February 2000, patient KS saw Assad for treatment at Kaiser roughly forty times in 26 months. Initially, he would do weird things to her like lift her off the exam table. He would hold her in his arms before putting her down. He often held her face during exams for no apparent medical purpose, and would routinely call her to "check if she was okay," according to medical board records.

Then in spring of 1998, during an examination, Assad passionately kissed her and asked if he could call her. She said yes. He called that day, and asked her to meet him at a local motel. According to medical board records, Assad gave her money to request a room at the back of the motel and they had sex.

The tryst continued throughout 1998, with Assad meeting KS at a motel up to three times a week. He told her to hide the affair, and continued to treat her as a patient with a total of 83 injections of heavy narcotics Toradol, Demerol, and Phenergran or a combination of all three. KS would call Assad for an injection and come down to Kaiser to receive it. According to records reviewed by the medical board, Assad did no further evaluation of her migraines nor did he assess the effectiveness of his treatment method.

By the summer of 1998, KS's world was starting to unravel. She separated from her husband, moved out two months later, and then things only got worse. "She had an ovary removed," according to medical board records, "was working about 67 hours a week, was the full time custodial parent for her two children, was having problems with her estranged husband and was in a clandestine sexual relationship with Assad." He also kept kissing her at the doctor's office, and on at least two occasions, inserted his fingers inside her vagina for no apparent medical purpose.

By the end of 1998, medical board records indicate that Assad was stalking his patient. She had a male friend over to her house one night, and Assad called her afterward, said he'd been watching with a gun and that he wanted to shoot her, her friend, and himself.

For a time after that, Assad stopped seeing patient KS for sex, but continued to treat her as a patient and mistreat her personally. Medical board records state: "On more than one occasion in 1999, while patient KS was in an exam room after having received an injection for her migraine, [Assad] held her face in his hands and said something to the effect of 'I should have killed you when I had the chance.'"


In December 1999, the two again began having sex at a motel. But KS's troubled life apparently had become too much for her to bear. On March 7, 2000 after sleeping with Assad the night before, she tried to kill herself. She was held for psychiatric treatment at Kaiser, and entered an intensive outpatient program where she met a fellow male patient and offered him a temporary place to stay at her apartment. Assad found out about her new housemate and arranged another meeting at the motel.

"On or about March 26 or 27, 2000, during their meeting in a hotel room, [Assad] became violent after patient KS acknowledged seeing another man," states the official medical board complaint filed against Assad in 2001. "[Assad] threatened to kill KS if she spoke to anyone about [him]. [Assad] forcefully had violent sex with patient KS, against her will. Patient KS was fearful for her life. After this encounter, patient KS went to a hospital emergency room with a complaint of a terrible pain in her neck and back and numbness in her face."

The next day, on March 28, KS informed another physician at Kaiser what Assad had done. She filed a complaint of rape with the Vacaville police and detectives set up a sting to catch Assad at the motel. She then arranged a final meeting at the motel, and when Assad showed up, police arrested him.

Vacaville police sent the case to the Solano County District Attorney's Office, but prosecutors rejected it for insufficient evidence. Vacaville police Sergeant Denise Quatman said certain domestic violence cases lack proof beyond a reasonable doubt, making them tough to prosecute.

But KS wasn't the only female patient to complain about Assad. A patient "KR" filed a complaint with Kaiser in 1999 after Assad lifted up the back of her skirt during an examination for asthma, according to medical board records. He also lifted her and hugged her without cause. And a patient "MB" filed sexual battery charges with Vacaville police, according to medical board records, after she went to see Assad complaining of bronchial problems, and he put his fingers in her vagina.

Assad's misconduct involving his three female patients prompted the medical board to place him on probation for seven years. Medical board spokeswoman Candis Cohen called the stay of revocation a common procedure. "We bring them up to the brink of losing their license, and then pull them back and then we say, 'We're not going to revoke you so long as you remain on the straight and narrow during probation,'" she said. "That language is typical in a decision."

Cohen, however, could not explain why a reported rape and two reported sexual batteries did not earn Assad a full revocation in 2001, but prescribing pot would seven years later. She said perhaps the evidentiary burden on the medical board may have been too high. Yet in med board documents, Assad did not dispute the allegations and admits to misconduct and inappropriate behavior with KS and KR.

At any rate, the conditions of Assad's probation included a ninety-day suspension and mandatory courses on prescribing practices, ethics, plus a psychiatric evaluation. The board placed a two-year restriction on practicing solo, and prohibited him from examining or treating female patients. Assad stipulated to the conditions and to official misconduct on November 19, 2001. Soon after, he moved into the pot business.


Ever since Proposition 215 passed in 1996, there's been a boom in clinics run by doctors that only prescribe pot. According to Dr. Philip Denney, former president of the Society of Cannabis Clinicians, there's an estimated 600,000 to 700,000 people with pot recommendations from a doctor, amid a field of perhaps 4 million California pot smokers. Anywhere from fifty to a few hundred doctors in the state do all the prescribing. No one counts them. They set up high-volume practices where they exclusively determine if marijuana would be an effective treatment for customer maladies.

Assad set up four such clinics starting in 2004 with offices in Arcata, Bakersfield, Ukiah, and the primary location in Oakland, where he employed one physician's assistant, two nurse practitioners, and office assistants. Fred Gardner, editor of leading cannabis journal O'Shaughnessy's, estimated that Assad issued 40,000 recommendations in five years and Assad stated in documents that nearly 100 percent of the people who sought a recommendation from him to use marijuana got one. One such customer was a patient that the medical board dubbed "SW," and he would be Assad's downfall.

Patient "SW" was a troubled teen. The Walnut Creek resident was a senior in high school with a history of mental issues that worried his parents. A few weeks before he turned eighteen, SW made an appointment to see Assad at his Oakland location. On February 3, 2007, the day after he turned eighteen, SW went to Assad's office to get a marijuana recommendation.

Office assistants gave SW forms to fill out, where he listed he was on cannabis and Depakote, a prescription drug for seizures and migraines. He said he was looking for a medical pot recommendation for his insomnia, uncontrollable rage, and shoulder pain from baseball. The teen wrote that his parents and brother had histories of mental health disorders and was a patient at Kaiser in Walnut Creek.

Assad asked SW how Depakote was working for his temper, anxiety, and insomnia. The teen said he didn't like it and that marijuana helped more. He was smoking it in the morning before school and in the evening before bed. Assad asked about the teen's shoulder pain but didn't examine the shoulder, or physically examine him, or conduct any other evaluation or tests. Instead, Assad said the teen had attention deficit disorder, prescribed cannabis, and told him to come back in a year to see how it was working. The teen later said the entire examination took ten minutes and he paid Assad $155.

When the parents found out about the recommendation, they complained to the California Medical Board. Cohen said the med board gets about a dozen pot doctor complaints each year, and they've disciplined exactly twelve since Prop. 216 took effect in 1997. They soon launched an investigation that determined Assad violated numerous rules for treating patients.

According to 2009 med board records, Assad didn't ask about SW's mental health issues, perform a physical, or take his vitals. He didn't even measure or weigh the teen before he listed SW's height and weight at six feet, 150 pounds. He didn't contact Kaiser for the teen's medical records because SW didn't want his parents to find out. But if Assad had gotten the records, he would have learned that the teen had been hospitalized for alcohol abuse. Assad later admitted to the board that he had underestimated the importance of the teen's medical records, and that he didn't follow his "routine" when examining him.

During Assad's revocation hearing, Dr. Barbara Neyhart of UC Davis Medical Center, a board-certified family practitioner, echoed board guidelines, which state that medical marijuana patients should be treated no differently than patients who come in asking for any other medicine. "There should be an appropriate history and an appropriate examination, followed by a discussion of therapeutic alternatives," the guidelines state.

Neyhart said in an interview that such by-the-books procedure is especially important when a patient comes in claiming to know what they need for an ailment. "I believe the concept behind Prop 215 was to make therapeutic cannabis available for patients who have chronic pain issues," she said, "not as a subterfuge for recreational users of the product."

Dr. Denney, the Sacramento family practitioner who later took over Assad's practice, testified on Assad's behalf, saying essentially that the doctor had loose procedures, but that Assad's recommendation of marijuana for SW's insomnia, anxiety, and ADD was appropriate. Denney, a founding member of the Cannabis Research Group, said recently in an interview that he intervened in the case to make sure that Assad, who was just an acquaintance of his, got a fair hearing. "No one would testify on Assad's behalf," Denney explained. "It can be distasteful and I didn't do it for Assad or for the movement, but rather a sense of duty to the system."

But the board ruled that Assad was grossly negligent and incompetent in his care of SW, and failed to maintain adequate and accurate medical records for the patient. The board lifted the stay of revocation it instituted in 2001, and revoked his certificate on November 23, 2009. After the hearing, Assad's lawyers — who declined to comment for this story — looked for potential NorCal Healthcare System Medical Clinic buyers. They found one in Assad's only defender, Dr. Denney. Assad himself is rumored to have gone back to Egypt.


Dr. Philip Denney looks like a congenial grandpa. He has a fluffy, white, clean beard, and his blue eyes sparkle behind his prescription glasses. During a recent interview at a downtown Oakland eatery, he wore a blue, short-sleeve, button-down shirt with a red tie and slacks, and carried with him a scratched, older-model Nokia cell phone. The five-dollar-a-plate restaurant and the six-pack of Anchor Steam he brought in indicate he's not getting rich off the pot practice he now runs.

Denney said he's just an old hippie trying to do what's right. He was born in Washington, DC and quit high school to join the Navy, where he jumped out of airplanes for fun and worked the skies in an anti-submarine patrol unit during Vietnam. His commander encouraged night school and when Denney finished a six-year stint in the Navy, he majored in zoology at Ohio University. When he did better than the pre-med students in a comparative anatomy, he applied to six medical schools and got into the University of Southern California, a move that would change his life.

He graduated from USC in 1976 and became a general practitioner. During his career, he has delivered more than 300 babies and has done rotations in busy emergency rooms and jail wards. While the rest of the medical field was reaping the profits of intense specialization in cities, Denney became a rural general practitioner, providing cradle-to-grave care in inland Northern California. He built his own house and raised a family. He got tired of patients missing payments, and bloody kids coming up his driveway for sutures, so did urgent care and occupational medicine in Sacramento.

In 2000, a neighboring doctor started making money prescribing pot. Denney joined their practice, having voted for Proposition 215, but said, "It became obvious they were playing fast and loose and it wasn't for me. I wanted to do things like take blood pressure and listen to the lungs. I thought it was obvious that the more controversial the practice, the closer you have to go by the book."

In 2004, he started three cannabis clinics in Orange County, Redding, and Sacramento with another doctor, and was semi-retired, working three days a week. "It was great," he said. "The patients are happy to see you. No one's dying in the lobby. No one's puking on your shoes. They pay on time."

Denney said he remembers first meeting Assad at a gathering of cannabis clinicians in Oakland where Assad's reputation as a loose cannon preceded him. Denney didn't see the doctor again until he testified on his behalf. "I had no intention of buying his practice when I testified," Denney said. But a Los Angeles buyer later approached him about a joint venture to purchase NorCal Healthcare and he agreed to buy the practice for $1.2 million (the company's annual net revenue).

Denney had given up the Redding and Orange County clinics to relax. But he got bored and said he saw NorCal as a chance to do right by Assad's 40,000 patients, who were left holding a recommendation from a discredited physician. He also likes testifying on his patients' behalf at court dates, parole hearings, Child Protective Services hearings, and union tribunals.

He intended to spend four months fixing Assad's practice, but said, "We're three months in and not even close. A conservative estimate is it's going to take till June. My role here is going to be limited to getting it up to the standards and functions of a physical plant I can be proud of."

He has let go of some NorCal staff, raised the standards of care, and brought in new medical professionals. Atop his to-do list: moving the Oakland office. "It's a pit," he said. "It's literally subterranean. It's dirty, stuffy, and we have to have a better space."

Denney said he intends to develop the premier cannabis practice in the state, rivaling its large peer MediCann. "We mean to practice excellence," he said. "We mean to be a model for physical evaluations of cannabis patients in the state. We understand we have to do a better job. We have to be exemplary. We have to be above reproach."

Denney said he sees about thirty patients a day now. Even Dr. Neyhart, the physician whose testimony was pivotal in Assad losing his license, agrees a good clinician can work that fast with the help of physician assistants and nurses doing much of the intake. "We focus the practice very narrowly," Denney said. "We determine the answer to a single question: Does this patient have a medical condition that could benefit from cannabis?"

Denney acknowledged that script mills exist, and if patients can't get a recommendation from him, they can just walk down the street to a less serious physician. "Such people give reputable physicians a bad name," he said. "They make this seem like a scam and they play into the hands of those who are opposed to this by doing things in a loose and unprofessional way."

But Denney said that fact belies an important distinction: Using pot is still safer than prescribing aspirin. "If this were a dangerous drug it would be a big issue," he noted.


Denney is the former president of the Society of Cannabis Clinicians, a trade group for pot doctors that had an open-door policy to people like Assad. The current president, Dr. Jeffrey Hergenrather of Sebastopol, said there's a rift in the clinicians' world between those who want to shun bad doctors like Assad and those who don't. The rift is so deep, in fact, that a splinter group has arisen called the American Academy of Cannabinoid Medicine, touting actual standards for clinical practice.

Hergenrather said consumers who see a shady pot doctor do themselves a disservice, because going to a place that keeps records, does physicals, takes blood pressure, looks at case history, and affords ample time with a doctor can save lives. He said he has often caught head and neck cancers in people who were coming in for a simple pot script. The fact that the California Medical Board did not permanently revoke the license of Assad after earlier misconduct indicates much bigger issues with doctors in the state than prescribing a harmless plant, Hergenrather argued.

Denney advises any of Assad's former patients with questions to call him and come in for a re-examination if necessary. And the issue of script mills may disappear all on its own this November if the Tax Cannabis 2010 initiative legalizes pot for personal consumption. If so, Denney estimates he'll lose 75 percent of his business and "fade into the woodwork."

Correction: An earlier version of this story misstakenly attributed the estimate that there are 600,000 to 700,000 people with pot recommendations from a doctor out of perhaps 4 million California marijuana smokers to Fred Gardner, editor of the cannabis medicine journal, O'Shaughnessy's. It should have been attributed to Dr. Philip A. Denney. In addition, an ealier version mistakenly said that a Los Angeles buyer had purchased NorCal Healthcare for $1.2 million, when in fact, it was Dr. Denney.

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