Federal crackdown targets state, local medical marijuana dispensaries
Federal prosecutors last week launched a crackdown on pot dispensaries in California. Stores were told in no uncertain terms they must shut down in 45 days or face criminal charges and confiscation of their property, even if they are operating legally under the state’s 15-year-old medical marijuana law (AB 215). Potentially on the block: Mammoth Lakes’ two dispensaries, which were approved for business just last year.
California’s four U.S. attorneys have already delivered letters notifying at least 16 pot shops or their landlords that they are in violation of federal drug laws, even though medical marijuana is legal in California. The offices did not confirm or deny issuing any such closure orders. According to an AP report, copies of letters that a prosecutor sent to 12 San Diego dispensaries state that federal law “takes precedence over state law, and applies regardless of the particular uses for which a dispensary is selling and distributing marijuana.”
“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,” letters signed by San Diego U.S. Attorney Laura Duffy read. “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.”
The move is seen as odd, coming from President Barack Obama’s administration, which many in the industry expected to be more liberal with regard to the dispensaries. In 2007, as then-candidate Barack Obama was campaigning for President of the United States, he stated his support of legalization of marijuana for medical purposes. However, until it was legalized, Obama said, he wouldn’t use federal resources to enforce the federal law.
Instead, the Obama administration has suddenly toughened its stand on medical marijuana following a two-year period during which federal officials had indicated they would not move aggressively against dispensaries in compliance with laws in the 16 states where pot is legal for people with doctors’ recommendations.
As of 2011, 16 states, including California, have medical marijuana laws on the books that recognize a medicinal value for marijuana. A recent Gallup poll showed that half of Americans now support legalizing marijuana use, a record high, part of a groundswell of support for decriminalization that could build pressure to eventually change U.S. laws on the drug.
Despite state laws popping up across the nation, however, the federal law has remained unchanged: marijuana growing and/or use for ANY purpose is still illegal.
An October, 2009 memo (known as the Ogden memo) released from the DOJ (U.S. Department of Justice) stated that federal resources would not be used to enforce current federal laws against medical marijuana users. But by this June, that policy had been reversed. A follow up DOJ memo (the Cole Memo) made it clear that federal resources WOULD be used to enforce current federal laws prohibiting marijuana production, distribution and use, essentially saying that state laws regarding the legalization of medicinal marijuana are irrelevant when it comes to the prosecution of marijuana growers, sellers and distributors.
In a textbook example of the conflict between state and federal law, marijuana dispensaries and licensed growers in states with medical marijuana laws could face prosecution for violating federal drug and money-laundering laws.
“This really shouldn’t come as a surprise to anyone. The administration is simply making good on multiple threats issued since President Obama took office,” said Kevin Sabet, a fellow at the University of Pennsylvania’s Center for Substance Abuse Solutions and a former adviser to the president’s drug czar, former Seattle Police Chief Gil Kerlikowske. He told the L.A. Times, “The challenge is to balance the scarcity of law enforcement resources and the sanctity of this country’s medication approval process. It seems like the Administration is simply making good on multiple statements made previously to appropriately strike that balance.”
Greg Anton, a lawyer who represents a Marin Alliance for Medical Marijuana, also told the L.A. Times a 14-year-old dispensary’s landlord received an “extremely threatening” letter Wednesday invoking a federal law that imposes additional penalties for selling drugs within 1,000 feet of schools, parks and playgrounds. The landlord was ordered to evict the pot club or risk imprisonment, plus forfeiture of the property and all the rent he has collected while the dispensary has been in business, Anton said.
The Marin Alliance “has been paying state and federal taxes for 14 years, and they have cashed all the checks,” Anton said. “All I hear from Obama is whining about his budget, but he has money to do this, which will actually reduce revenues.”
Locally, Mono County dispensaries Green Mammoth and Mammoth Lakes Wellness are understandably concerned. As Green Mammoth’s Steve Klassen said Thursday, “I’m certainly intimidated … but I’m not closing.”
Some other counties have already taken preemptive measures just in case G-men come banging on dispensary doors. An example: citing conflicting federal and state laws and law enforcement concerns, Santa Barbara County officials earlier this week opted to pursue a ban on medical marijuana collectives rather than allow those interested in running such a business to apply for a conditional-use permit on a case-by-case basis.
Also on the front lines of the crackdown: the U.S. Drug Enforcement Agency. “The DEA and our partners are committed to attacking large-scale drug trafficking organizations, including those that attempt to use state or local law to shield their illicit activities from federal law enforcement and prosecution,” DEA Administrator Michele Leonhart said in an agency statement. “Congress has determined that marijuana is a dangerous drug and that its distribution and sale is a serious crime. It also provides a significant source of revenue for violent gangs and drug organizations. The DEA will not look the other way while these criminal organizations conduct their illicit schemes under the false pretense of legitimate business.”
Last Thursday, DEA agents raided a medical marijuana cooperative that holds a Mendocino County sheriff’s permit to grow medicinal pot, further demonstrating the gaping discrepancy between state and federal marijuana laws. DEA officials declined to comment on the raid, which resulted in the confiscation of 99 pot plants at Northstone Organics, located about 10 miles north of Ukiah in Redwood Valley.
And the IRS was also brought in to use its financial expertise to ratchet up pressure on dispensary operators. “We will continue to use the federal asset forfeiture laws to take the profits from criminal enterprises,” promised IRS chief of criminal enforcement Victor Song in an interview with the Sacramento Bee.
The Associated Press reported this week that the U.S. Treasury Dept. has been pressuring banks into shutting down the accounts of providers in California and Colorado, the Department of Justice is aggressively prosecuting dispensary operators in Montana and elsewhere, and the IRS is attempting to drive dispensaries out of business by denying them standard business expense deductions. Oakland’s Harborside Health center was recently hit with a $2.5 million tax bill after the IRS disallowed its standard business deductions (because you apparently can’t deduct an expense from what’s considered an illegal operation).
Some lawmakers in other California counties seem to think that the DOJ could be targeting the state because of the sheer number of dispensaries that have popped up. Reported figures from Max Del Real, a lobbyist for the Sacramento Alliance of County Collectives (SACC), a medical cannabis trade association, show that as of this past July there were as many as 65 medical marijuana dispensaries operating in Sacramento County. Further, a Sacramento city staff report showed that, when the city’s medical marijuana ordinance was enacted in November 2010, there were already 39 registered medical marijuana dispensaries operating in the city.
Contrast that to the Town of Mammoth Lakes, which only has 2 dispensaries, the maximum allowed by Town ordinance. Mono County has no such medical marijuana ordinance, and outside of the Town’s 2 permitted dispensaries, no other dispensaries are known to exist within Mono County.
Locally, former Mammoth Lakes Planning Commission Tony Barrett, who was instrumental in the effort to write both Measure M, which 56% of Town voters approved last June, and the subsequent Town ordinance which governs the two local dispensaries, emphasized the Town’s meticulous approach.
“When we authored our ordinance, we used Proposition 215 [the Compassionate Use Act, which made legal medical marijuana use in California] as the template,” Barrett noted. “We followed 215 to the letter … even further in the case of extending the distance from schools to not less than 500 feet. I really don’t see an issue between us and the federal government.” Barrett also thinks the feds might be going after what he called “profiteers,” who aren’t following 215’s guidelines. “Those who comply should be left alone.”
Mammoth Lakes Mayor Jo Bacon said she thought the language and intent of Measure M was very clear when the citizens voted for it. “Limiting the number to just two, the storefront locations and the distance from schools, and having regular inspections and police oversight has given us more control,” Bacon said.
But the larger question could be whether the Town even has the right to enact such ordinances. In the recent case of Pack versus City of Long Beach, a local marijuana ordinance was targeted for invalidation.
In that case, in which the federal Supremacy Clause was invoked, it was argued that, while the state legislature enacted California Code 37100 that provides cities the power to enact ordinances “not in conflict with the Constitution of the State or the United States,” a municipal ordinance that directly conflicts with the federal Controlled Substances Act invalidates 37100.
(A decision in Pack versus Long Beach essentially invalidating the ordinance is currently under appeal.)
That finding, Mammoth Town Attorney Andrew Morris indicated, could set the stage for a similar challenge of Mammoth’s ordinance. With the feds filing various charges and seizing property (including any rented property) in other municipalities, Morris said it appears that the federal authorities could be planning to move in that direction locally. The Town has been discussing related “pending litigation” in closed session as recently as this Wednesday. He did, however, make clear that he “hasn’t been given any direction to take any enforcement action against the dispensaries in Mammoth.”
Green Mammoth’s Steve Klassen, who pointed out that the California Medical Association, the largest medical board, recently announced it supports legalization of medical marijuana.
Leaders of the 156-year-old California Medical Association have called for the legalization and regulation of marijuana “so its potential medical benefits can be studied.” At a meeting in Anaheim last Friday, the trustees of the 35,000-member organization approved a 14-page white paper, the findings of which stem from physicians’ frustration over whether to prescribe for patients a substance that’s illegal under federal law.
“If you get over the stereotypes of how people look and act when they’re stoned and instead look at what it does inside your body, it [marijuana] really is good for you,” said Klassen, who said he is concerned about what will happen to his patients if he is forced to shut down. Likely, they’ll be thrown onto the black market where, Klassen says, “You don’t know what you’re buying and have no idea if and what pesticides were used.”
Mono County is keeping an eye on the situation, but isn’t likely to be involved. Deputy District Attorney Tim Kendall told The Sheet that any issues that do arise will be between the federal government and the Town specifically. “It’s an evolving situation that’s just getting started,” Kendall said.
-Sources: Los Angeles Times, Sacramento Press, Digital Clipping Service, Department of Justice, Drug Enforcement Agency, Reuters, Mountain News, Scribd.com.