Marijuana and Cannabis News

Federal Threats Get Results: CA Marijuana Dispensaries Close
By Steve Elliott ~alapoet~ in Dispensaries, News
Friday, October 21, 2011 at 1:20 pm
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Salem-News
Dispensaries in California appear to be closing as a result of the federal crackdown on medical marijuana.

In conservative Orange County, a threatening letter from federal prosecutors achieved what nearly $600,000 in legal fees couldn't -- shutting down the dispensaries, reports the Associated Press

All eight collectives that had occupied the second floor of a mini-mall in Lake Forest have closed since California's four U.S. Attorneys announced a couple of weeks ago that they were cracking down on medicinal cannabis sales in the state, reports Greg Risling at the Associated Press.

The healthy competition between the eight dispensaries at the Lake Forest mall was good for everyone, local patient Melissa Morales told Toke of the Town.

"It was like heaven," Morales told us on Friday. "I got treated like a queen. One of the collectives had a frequent buyer program punch card. You got a free eighth after 10 donations and a free preroll with any edible."

"There is no other business that could survive next door to seven other shops selling the same product," Morales said. "It's going to be missed by hundreds of patients, possibly thousands.

"You could sit at the bottom of the stairs and watch about 100 people go into one of the shops in an hour after 5 p.m.," Morales told us. "Old people, young people, business professionals in suits, hippies, it was everyone from all walks of life.

"One time my friend drove and waited in the car and counted 90 people go up the stairs in the 15 minutes it took me to go in and out," Morales said.

Now, just think for a moment about just how many patients just had their safe, local access cut off. Including senior citizens with limited mobility, for whom driving is not an option.

"It's all right down the street from Leisure World, which is a retirement community now known as Laguna Woods, and I know a few home care nurses who were caretakers that would get medicine for their clients there after the home delivery service 'HUGS' (Healing Under God's Soil) was shut down," Morales said.

"I talked to one of the caretakers earlier today and she told me her patient is really upset," Morales told us. "She called to ask me if I knew of any other delivery services and I told her I haven't heard of any new ones.

"The good thing is, all those people can vote," Morales pointed out.

"The competition was crazy," Morales told Toke of the Town. "It drove down prices from 60 to 40 cap for top shelf. Every shop had a sign outside the door announcing specials. And in the middle was a head shop, which was convenient."

Many of the 38 dispensaries in the Central District of California -- which stretches from Santa Barbara to San Bernardino counties -- have reportedly already closed because landlords were given just 14 days to evict marijuana shops or face forfeiture of their real estate. That period expires today, Friday, October 21.

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California Cannabis Association
California Cannabis Association President George Mull: "Hopefully (Sacramento) will do the right thing and give back the application money"
​The California Cannabis Association estimates that the city of Sacramento has taken in more than $2 million in taxes, permits and fees from medical marijuana dispensaries in the past year. The city's Economic Development Committee doesn't dispute that number, reports KCRA.

Each of the dispensaries had to go through a lengthy permit process of three different phases, costing more than $20,000, according to the Economic Development Department. The city also gets a four percent sales tax on dispensary profits from selling marijuana, said Maurice Chaney, representing the department. According to Chaney, 35 dispensaries are going through the permitting process.

All of that money, of course, could be drying up if the federal government follows through on its threats.

"That source of revenue is new anyway," said Angelique Ashby, a Sacramento City Council member. "So hopefully we haven't become too reliant on it in the year that we have had the ordinance."

Since Sacramento froze the permitting process after the federal crackdown on dispensaries in California was announced, some are wondering what will happen to the money the city has already received for permits from dispensary owners still in the process.

"I don't think it's logical to keep the money," said George Mull, president of the California Cannabis Association. "Hopefully (the city government) will do the right thing and give back the application money."

But Chaney said Sacramento is keeping the money -- because it has only "frozen" the permitting process, not "ended" it.

While some smaller communities in California like Lake Forest have wrestled with the challenge of regulating the dispensaries, others have just banned them completely. The legal battles have already cost local municipalities millions of dollars in attorney fees.

Attorney David Welch, who represents three of the dispensaries in Lake Forest that closed after the letter went out, said every shop in the city got a warning letter that leaves it unclear exactly who is really being targeted.

"It doesn't seem there is any narrowing of who is a large operation and who is profiting," Welch said. "I think the main purpose of this tactic is to convince or scare landlords not to rent to medical marijuana collectives."

California law -- and that in 15 other states and the District of Columbia -- allows cannabis use and possession for authorized patients. Marijuana remains illegal for any purpose under federal law.


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