Monday, October 10, 2011

California Federal Prosecutors Taking Aim At Pot Business, Scattershot In Approach

What was always an uneasy truce between federal drug enforcement authorities and the thriving medical marijuana industry in the 16 states that have some version of the Arizona Medical Marijuana Act (AMMA) now appears completely shattered.

The U.S. Attorneys for the four California federal districts held a joint press conference in Sacramento on October 6, 2011 to announce a crackdown on the state's medical marijuana industry, which the prosecutors claim has corrupted the intent of the 1996 compassionate use voter referendum, the first such law in the nation.

The prosecutors are using a variety of tactics.  In Orange County, prosecutors have brought a criminal indictment against a strip mall operator who leased 11 suites to marijuana stores.  In Sacramento, prosecutors have filed criminal charges against operators of a large-scale dispensary that allegedly took in $30,000 to $50,000 a day from marijuana sales and had nearly $600,000 and more than 250 pounds of pot on hand. 

Also indicted was a Los Angeles attorney who allegedly has pocketed millions of dollars by organizing growing schemes for marijuana dispensaries. The attorney formed a management company and hired two prize-winning tomato growers to convert their greenhouses to cultivating thousands of marijuana plants.

Federal prosecutors around the state also have sent letters to landlords of major dispensaries and cultivators, ordering them to evict their tenants within 45 days or face 40 years in prison, forfeiture of the property, and any rents paid.  A recent report quotes a San Francisco woman who claims to be the first dispensary operator in the United States describing the letter her landlord received as "very ominous."

The top federal prosecutor for Los Angeles, Andre Birotte, stated at the press confernce that the California law did not permit the types of businesses the feds were targeting.  "While California law permits collective cultivation of marijuana in limited circumstances, it does not allow commercial distribution through the store-front model we see across California,” he said.

One big difference between the Arizona and California laws is that the AMMA expressly permits and regulates non-profit dispensaries and cultivation sites.  Of course, those are not yet up and running because of litigation Governor Jan Brewer filed back in June

Arizona citizens are left to wonder whether the higher degree of state regulation would make a difference to federal prosecutors here.  That likely would depend on whether Arizona's detailed regulatory scheme achieves its aim of keeping the focus on medical use, as opposed to recreational use.  But with the AMMA only partly implemented, the efficacy of that scheme has yet to get a fair test.

No comments: