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Feds to Pot Shops: No One is Safe

In escalating campaign, US attorney says many dispensaries serving as fronts for "drug trafficking"

SACRAMENTO - No medical marijuana dispensary in California is safe from federal prosecution. 

That was the message Friday from the state’s four U.S. attorneys, who announced a crackdown on what they described as widespread criminal activity in a $1 billion industry that includes dozens of medical marijuana stores in the Bay Area.

“People are using the cover of medical marijuana to make extraordinary amounts of money, in short, to engage in drug trafficking,” said Melinda Haag, the US Attorney for the Northern District of California, which includes the Bay Area as well as the marijuana growing capital of Mendocino County.

“One of the reasons we are here today is to try and put to rest the notion that large medical marijuana businesses can shelter themselves under state law and operate without fear of federal enforcement,” she said.

Friday’s highly choreographed announcement was the clearest indication that the federal government has declared war on the medical marijuana industry, putting the Obama administration directly in conflict with California law and the public policies of numerous cities, including Oakland and San Francisco. 

Under Gov. Jerry Brown, California has continued to deemphasize marijuana prosecution. This year, Brown defunded the marijuana eradication program known as CAMP. Marijuana possession in small amounts is now punishable by the equivalent of a parking ticket. A bill before the state legislature would give district attorneys the option of charging marijuana growers with a misdemeanor. 

Oakland was preparing to license four large-scale pot farms last fall before Haag issued a warning to the city that it could face prosecution. Oakland is set to expand its total number of dispensaries from four to eight this year. 

State Assemblyman Tom Ammiano, who is sponsoring the legislation reducing penalties against growers, said in a statement that he was “bitterly disappointed in the Obama Administration for this unwarranted and destructive attack on medical marijuana and patients’ rights to medicine.”

Haag said her office recently sent out “dozens” of letters to landlords and dispensaries in California’s Northern District, ordering them shut down or face criminal prosecution and seizure of their property and profits.  Sources identified three dispensaries in San Francisco’s Mission District — Mr. Nice Guy, Medithrive, and 208 Valencia Street Caregivers — and one dispensary in Fairfax, the 14-year old Marin Alliance for Medical Marijuana, as four of the targets.

Haag said that pot dispensaries that did not receive letters “should take no comfort.”

The first letters were aimed at “stores that sell marijuana and allow people to smoke marijuana near to schools parks and other places where children learn and play,” she said. Although her office does not have enough resources to prosecute every pot shop, she said this was just the first phase of the government’s effort.

“We will almost certainly be taking actions against others,” said Haag. “None are immune from the action by the federal government.”

She said federal prosecutors would not be targeting cancer patients who use medical marijuana or their caregivers. 

Haag said the Internal Revenue Service is working with federal prosecutors. The IRS last week ruled that Oakland's Harborside Health Center, the largest dispensary in the Bay Area, owes millions of dollars in back taxes.

Haag said that cities licensing and taking fees from dispensaries, such as Oakland, should take heed of a recent court decision involving Long Beach, which held that licensing medical pot shops was against the law.

She said that cities like Oakland will “hopefully be making some changes as a result,” but said prosecution of city officials was not being considered.

Ben Wagner, the US Attorney for the Eastern District, which stretches from Sacramento to the Sierras, has launched 11 criminal prosecutions against people involved with medical marijuana operations.

The poster boy in Wagner’s effort is Yan Ebyam, the ambitious potrepreneur profiled by the Bay Citizen in March shortly before his arrest. Ebyam convinced down and out trucking and plumbing companies to turn their warehouses into some of the largest marijuana growing operations in Oakland. 

Haag said many marijuana dispensaries are not primarily in the business of helping sick people. She said anyone could sit outside a shop and watch “seemingly young and healthy people jumping out of their cars running into the store and emerging with paper bags full of marijuana.”

Dozens of medical marijuana advocates marched outside Sacramento’s federal courthouse, where the press conference was held. Many said they felt betrayed by President Obama, who initially said the federal government would not target those complying with state medical marijuana laws.

Jeff Patterson, a medical marijuana user, held a sign with a picture of Obama saying: “No You Can’t.”

“Two years ago he said it was okay and he didn’t have a problem with it,” said Patterson. “He’s completely turned around.”

Dan Rush, boss of United Food and Commercial Workers Local No. 120, which represents cannabis workers said the move would simply drive the marijuana back underground, making it more dangerous for everyone.

“The commercialized industry is the only responsible industry,” said Rush. “The back door industry is a fertile training ground for thugs.”

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