A new federal crackdown on medical marijuana businesses in
California is facing strong resistance from backers of the
dispensaries.
A new federal crackdown on medical marijuana businesses in California is facing strong resistance from backers of the dispensaries.
“It’s coming out of left field as far as we’re concerned,” said Joe Elford, the chief counsel for Americans for Safe Access, which advocates for medical marijuana use. “I really don’t know what inspired this. It’s a complete about-face from what (Obama) said when he was campaigning.”
Federal prosecutors are threatening to shut down medical marijuana dispensaries throughout California, sending letters that warn landlords to stop sales of the drug within 45 days or face the possibility that their property will be seized and they will be charged with a crime.
In 2010, a Superior Court judge upheld the City of Gilroy’s decision to prohibit medical marijuana dispensaries within the city and determined the city’s sole nonmobile dispensary was operating illegally. Medileaf, which was open less than a year at 1321 First St.(it closed shop in August 2010), did not obtain a business license because it was operating as a not-for-profit its directors argued. Medileaf has two other locations in San Jose and Willow Glen, where dispensaries providing medical marijuana are not illegal.
The stepped-up enforcement escalates the Obama administration’s efforts to rein in the spread of pot stores, which accelerated after the attorney general announced in 2009 that federal prosecutors would not target people using medical marijuana in states that allow it. Selling and using medical marijuana – with a license and prescription, respectively – is legal in California.
The initiative, spearheaded by the four U.S. attorneys in the state, will focus on dispensaries selected by the prosecutors, said a person familiar with the operation. He declined to say what criteria would be used to target dispensaries and asked not to be identified because the prosecutors are scheduled to make the official announcement at a news conference Friday morning in Sacramento.
Landlords for some dispensaries have already received letters, including the owner of the building that houses the Marin Alliance for Medical Marijuana in Fairfax, Calif., the oldest dispensary in the country. “I assume the story you’re calling about is: Obama takes resources away from fighting terrorists and goes after old ladies with glaucoma,” said Greg Anton, a lawyer who represents the dispensary.
Letters sent this week to targeted dispensaries in San Diego, San Francisco, Marin and elsewhere warn that California’s medical marijuana law is no protection against property seizure or prosecution under federal law.
The letters demand that landlords or operators “discontinue the sale and/or distribution of marijuana … within 45 days.”
The specter of new federal intervention against California dispensaries follows the disclosure this week that the Internal Revenue Service is seeking a $2.4 million tax penalty against California’s largest medical marijuana provider, the Harborside Health Center in Oakland.
The letters also come as top federal prosecutors from California’s four federal judicial districts are due to appear in Sacramento on Friday to announce a U.S. Justice Department policy towards medical marijuana sales and cultivation.
In recent weeks, federal authorities in Sacramento have seized accounts of two dispensaries in a probe of irregular banking practices.
They filed criminal charges against operators of another dispensary accused of conspiracy and illegal marijuana sales for alleged profiteering, despite California law mandating that dispensaries operate as non-profits.
The federal actions could have significant consequences in California where medical marijuana transactions are estimated at $1.5 billion or more. The state of California receives an estimated $100 million in sales taxes on dispensaries. Several cities, including Sacramento, have sought to infuse depleted coffers by taxing medical marijuana at local dispensaries.
