Marijuana and Cannabis News

Feds: California Marijuana Dispensaries Must Shut Down
By Steve Elliott ~alapoet~ in Dispensaries, News
Thursday, October 6, 2011 at 3:20 pm
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LSQ
In a major escalation of the U.S. federal government's war on medical marijuana dispensaries, federal prosecutors have warned California collectives they have 45 days to shut down or face criminal charges and confiscation of their property -- even if they are operating legally under the state's medical marijuana law, approved by voters in 1996.

California's four U.S. Attorneys sent letters on Wednesday and Thursday to at least 16 dispensaries or their landlords notifying them they are violating federal drug laws, reports Lisa Leff at the Associated Press. Medical marijuana is legal in California, but federal law prohibits pot for any purpose.

The U.S. Attorneys are scheduled to announce their coordinated crackdown on dispensaries at a Friday news conference. Their offices have so far refused to confirm the closure letters.

The Associated Press said it obtained copies of the letters that one federal prosecutor send to 12 dispensaries in San Diego; they say that federal law "takes precedence over state law and applies regardless of the particular uses for which a dispensary is selling and distributing marijuana."

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Voice of San Diego
U.S. Attorney Laura Duffy: "Real and personal property involved in such operations are subject to seizure by and forfeiture to the United States"
​"Under United States law, a dispensary's operations involving sales and distribution of marijuana are illegal and subject to criminal prosecution and civil enforcement actions," read the letters signed by U.S. Attorney Laura Duffy in San Diego. "Real and personal property involved in such operations are subject to seizure by and forfeiture to the United States ... regardless of the purported purpose of the dispensary."

"Please take the necessary steps to discontinue the sale and/or distribution of marijuana at the above-referenced location within 45 days," the letter warns, reports George Warren at News 10.

The letters inform landlords that their properties could be forfeited and their tenants could be thrown into prison for up to 40 years unless the dispensaries close, reports Chris Roberts at SF Weekly.

A spokeswoman for the U.S. Attorney's office in Sacramento confirmed her office would also be contacting dispensary landlords.

"We are initiating similar communications to selected property owners in the Eastern District," public information officer Lauren Horwood said. "We will be in a position to say more in the near future."

After two years during which the Obama Administration said they wouldn't move aggressively against medical marijuana providers abiding by state law, the federal government started cracking down earlier this year with threatening letters from U.S. Attorneys to governors and legislators in most of the 16 states which allow medicinal cannabis.

The effort to shutter California dispensaries is part of a multi-pronged assault by the federal government on the shops.

Banks are cutting business ties with dispensaries, possibly under federal pressure and undoubtedly due to federal banking rules as they pertain to "illegal drugs." On a related front, the Internal Revenue Service is investigating the finances of some California dispensaries including Oakland's Harborside Health Center, alleging the shop owes millions of dollars in back taxes.

Federal tax rules prohibit medical marijuana dispensaries from taking tax deductions normally available to other businesses. The federal government issued Harborside -- the largest collective in the country, with more than 90,000 patients -- with a $2.4 million tax bill this week, reports Nick Schou at OC Weekly.

"If you can't declare your business expenses on your taxes, and if you can't open a bank account, how can you run a business?" asked one San Francisco attorney specializing in medical marijuana.

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Steve Elliott ~alapoet~
Steve DeAngelo, Harborside Health Center: "If we don't get a change in the IRS ruling, every legal, regulated distributor of cannabis in the United States is going to have to go out of business"
​"If we don't get a change in the IRS ruling, every legal, regulated distributor of cannabis in the United States is going to have to go out of business, and patients will be forced back into the hands of criminals," said Steve DeAngelo, executive director at Harborside.

"It's just the latest evidence that despite early signs from the Obama administration that it wasn't going to interfere with the right of states to allow the medical use of marijuana, nothing could be farther from the truth," Schou wrote at the OC Weekly. "And assuming the feds make good on this latest threat, it could mean the end of medical marijuana as we know it."

"I think the feds are seeing how much land, especially in northern California, is being used for marijuana growing, and realize they can start seizing these properties and turn it into federal land," Christopher Glew, who represents collectives in Orange County and elsewhere, told OC Weekly. "And the thing with federal forfeiture is that it can take two or three years before it goes to court, but meanwhile you lose all your property."

Glew said that the medical marijuana industry is "either going to the grave or it will have to be reinvented."

William Panzer, an Oakland attorney who coauthored Prop 215, the 1996 ballot initiative that legalized medical marijuana in California, said the days are numbered for the current model of marijuana dispensaries, report Andrew Becker and Michael Montgomery at California Watch.

"It's an effective strategy because they're basically saying to landlords. 'If you don't do this, then you lose your property, and we could also come after you criminally,' " Panzer said.

"Although reprehensible and cowardly, the strategy does at least offer a useful guideline as to who will be at risk," said Dale Gieringer of California NORML. "The memorandum sets thresholds that make investigations more likely to be prosecuted.

"Those include distributors caught with at least 200 kilograms of marijuana, including distribution near schools, playgrounds and colleges; cultivators with gardens of at least 1,000 plants that are not on federal land and at least 500 plants on federal or tribal land or where there is significant damage; and dispensaries that sell more than 200 kilograms or 1,000 plants annually," Gieringer said.

"Prosecutors are also looking for provable ties to international drug-trafficking organizations or instances in which marijuana is distributed outside of California," Gieringer said. "The memorandum also outlines guidelines for civil forfeitures for those who indirectly participate -- like landlords or property owners -- in marijuana operations."

There's no word on whether the federal government plans to raid and shut down its own medical marijuana farm in Oxford, Mississippi, or arrest its own federal employees for distributing medical marijuana to the four surviving Compassionate Investigational New Drug cannabis patients who have received pot from them for the past 30 years.

Marijuana is, after all, still against federal law.






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