Feds Target Property Owners of Medical Marijuana Dispensaries in California

The feds launched a new assault in their fight against medical marijuana today, threatening to seize the property of California medical marijuana dispensaries unless they close within 45 days.

If there's no push-back from the states that have legalized weed for qualified patients, including Arizona, it looks like this could be the end of the road for what has been a thriving, though not altogether legal, medical marijuana industry.

Oh, and Jan Brewer will be proved right.

As for medical marijuana users themselves -- the feds say they'll be left alone. Rather, as a U.S. Department of Justice official told us yesterday, no resources will be focused on "individuals with serious illness or their immediate caregivers who are in compliance with applicable state medical marijuana statutes."

Trouble is, the Obama Administration is setting up quite a conflict for itself. It'll be shutting down an arguably legal supply of medical marijuana, but not the demand.

Whichever Republican nominee for the 2012 presidential election expresses support for dispensaries may well win a High Times endorsement.

UPDATE: Here's the entire news release from the U.S. Attorneys in California that was released on Friday:



SACRAMENTO, Calif. - The four California-based U.S. Attorneys today announced coordinated enforcement actions targeting the illegal operations of the commercial marijuana industry in California.

The statewide enforcement effort is aimed at curtailing the large, for-profit marijuana industry that has developed since the passage of California's Proposition 215 in 1996. That industry has swelled to include numerous drug-trafficking enterprises that operate commercial grow operations, intricate distribution systems and hundreds of marijuana stores across the state -- even though the federal Controlled Substances Act makes illegal the sale and distribution of marijuana.

While the four U.S. Attorneys have tailored enforcement actions to the specific problems in their own districts, the statewide enforcement efforts fall into three main categories:

· Civil forfeiture lawsuits against properties involved in drug trafficking activity, which includes, in some cases, marijuana sales in violation of local ordinances;

· Letters of warning to the owners and lienholders of properties where illegal marijuana sales are taking place; and

· Criminal cases targeting commercial marijuana activities, including arrests over the past two weeks in cases filed in federal courts in Los Angeles, San Diego, Sacramento and Fresno, Calif.

The enforcement actions being announced today are the result of the four U.S. Attorneys working with federal law enforcement partners and local officials across California to combat commercial marijuana activities that are having the most significant impacts in communities.

"The actions taken today in California by our U.S. Attorneys and their law enforcement partners are consistent with the Department's commitment to enforcing existing federal laws, including the Controlled Substances Act (CSA), in all states," said Deputy Attorney General James Cole. "The department has maintained that we will not focus our investigative and prosecutorial resources on individual patients with serious illnesses like cancer or their immediate caregivers. However, U.S. Attorneys continue to have the authority to prosecute significant violations of the CSA, and related federal laws."

"Large commercial operations cloak their moneymaking activities in the guise of helping sick people when in fact they are helping themselves," said Benjamin B. Wagner, the U.S. Attorney for the Eastern District of California. "Our interest is in enforcing federal criminal law, not prosecuting seriously sick people and those who are caring for them. We are making these announcements together today so that the message is absolutely clear that commercial marijuana operations are illegal under federal law, and that we will enforce federal law."

"The federal enforcement actions are aimed at commercial marijuana operations, including marijuana grows, marijuana stores and mobile delivery services - all illegal activities that generate huge profits," said André Birotte Jr., the U.S. Attorney for the Central District of California. "The marijuana industry is controlled by profiteers who distribute marijuana to generate massive and illegal profits."

"The California marijuana industry is not about providing medicine to the sick," commented Laura E. Duffy, the U.S. Attorney for the Southern District of California. "It's a pervasive for-profit industry that violates federal law. In addition to damaging our environment, this industry is creating significant negative consequences, in California and throughout the nation. As the number one marijuana producing state in the country, California is exporting not just marijuana but all the serious repercussions that come with it, including significant public safety issues and perhaps irreparable harm to our youth."

"Marijuana stores operating in proximity to schools, parks, and other areas where children are present send the wrong message to those in our society who are the most impressionable. In addition, the huge profits generated by these stores, and the value of their inventory, present a danger that the stores will become a magnet for crime, which jeopardizes the safety of nearby children," said Melinda Haag, the U.S. Attorney for the Northern District of California. "Although our initial efforts in the Northern District focus on only certain marijuana stores, we will almost certainly be taking action against others. None are immune from action by the federal government."

Dozens of letters have been sent over the past few days to the owners and lienholders of properties where commercial marijuana stores and grows are located. In the Southern and Eastern Districts, the owners of buildings where marijuana stores operate have received letters warning that they risk losing their property and money derived from renting the space used for marijuana sales. In the Central District, where more than 1,000 stores are currently operating, prosecutors have sent letters to property owners in selected cities where officials have requested federal assistance, and they plan to continue their enforcement actions in other cities as well. In the Northern District, owners and lienholders of marijuana stores operating near schools and other locations where children congregate have been warned that their operations are subject to enhanced penalties and that real property involved in the operations is subject to seizure and forfeiture to the United States.

In the Central District and Eastern District, prosecutors this week filed a total of seven civil forfeiture complaints against properties where landlords are knowingly allowing marijuana stores to operate. One complaint filed against a south Orange County strip mall, for example, alleges that eight of the 11 second-floor suites in the buildings are occupied by marijuana stores and that one small city has spent nearly $600,000 in legal fees in its attempt to eradicate the illegal operations.

Criminal cases recently unsealed across the state reveal marijuana operations that produce huge profits, send their money and illegal narcotics to other states, and market products to young people. In a case involving a now-closed marijuana store in the San Fernando Valley, two conspirators allegedly used encrypted smartphones to coordinate marijuana sales to places as far away as New York and estimated that they would each receive $194,000 in profits per month. In a San Diego dispensary case unsealed last week, six defendants were charged in a 77-count indictment that alleges a wide-ranging conspiracy that included numerous marijuana sales to under-aged persons.

"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," said Drug Enforcement Administration (DEA) Administrator Michele M. Leonhart. "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."

"IRS-Criminal Investigation is proud to work with our law enforcement partners and lend its financial expertise to this effort, "said Victor S.O. Song, Chief, IRS-Criminal Investigation. "We will continue to use the federal asset forfeiture laws to take the profits from criminal enterprises."

Across California, the federal government will continue to investigate and prosecute those whose actions not only violate federal laws, but also the state laws regarding the use of marijuana. The problems associated with the marijuana business have dramatically increased over the past two years, even in areas where local governments and citizens actively oppose these businesses.

The statewide coordinated enforcement actions were announced this morning at a press conference in Sacramento.

# # #


Central District of California (Los Angeles)

Thom Mrozek - [email protected]

O: (213) 894-6947 M: (213) 494-9261

Southern District of California (San Diego)

Debra Hartman - [email protected]

O: (619) 557-5275

Eastern District of California (Sacramento and Fresno)

Lauren Horwood - [email protected]

O: (916) 554-2706 M: (916) 761-2706

Northern District of California (San Francisco)

Jack Gillund - [email protected]

O: (415) 436-6599

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.