Feds announce Calif. pot dispensary crackdown

October 7, 2011 - 6:10 PM
Medical Marijuana

FILE - In this Tuesday Jan. 26, 2010 file photo, a pedestrian walks past a marijuana leaf neon sign advertising a medical marijuana provider along a street in the Sherman Oaks section of Los Angeles, Calif. Federal prosecutors have launched a crackdown on pot dispensaries in California, warning the stores that 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. (AP Photo/Richard Vogel)

SACRAMENTO, Calif. (AP) — Federal prosecutors announced an aggressive crackdown against California pot dispensaries Friday, vowing to shut down dozens of growing and sales operations and saying that the worst offenders are using the cover of medical marijuana to act as storefront drug dealers.

Officials described it as the first coordinated statewide offensive against marijuana dealers and suppliers who use California's 15-year-old medical marijuana law as legal cover for running sophisticated drug trafficking ventures in plain sight.

"California's marijuana industry supplies the nation," said U.S. Attorney Benjamin Wagner, who represents the state's Central Valley. "Huge amounts of marijuana grown here in this state is flowing east to other states, and huge amounts of money are flowing back in the opposite direction."

Landlords leasing property to dozens of warehouses and agricultural parcels where marijuana is being grown and retail spaces where pot is sold over the counter are receiving written warnings to evict their tenants or face criminal charges or seizure of their assets, the state's four U.S. attorneys said.

"The intention regarding medical marijuana under California state law was to allow marijuana to be supplied to seriously ill people on a nonprofit basis," said U.S. Attorney Melinda Haag, the top federal law enforcement officer for the San Francisco Bay area. "What we are finding, however, is that California's laws have been hijacked by people who are in this to get rich and don't care at all about sick people."

The crackdown comes a little more than two months after the Obama administration toughened its stand on medical marijuana. For two years before that, 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.

The Department of Justice issued a policy memo to federal prosecutors in late June stating that marijuana dispensaries and licensed growers in states with medical marijuana laws could face prosecution for violating federal drug and money-laundering laws. The effort to shutter California dispensaries appeared to be the most far-reaching effort so far to put that guidance into action.

The crackdown will likely unify marijuana growers and sellers in a drive to change federal policy, National Cannabis Industry Association spokeswoman Melissa Milam said.

"We're not going anywhere. We're mothers, we're patients, we're family members of patients," she said. "We want to pay taxes, we want to be able to make deposits at our bank, we want to be a business."

Not all of the thousands of storefront pot dispensaries thought to be operating in the state are being targeted in the crackdown, which also involves new indictments and arrests of marijuana growers throughout the state over the past two weeks, said Wagner, who represents the state's Central Valley.

The strategies they are using vary somewhat, with warning letters issued by the U.S. attorney in San Diego giving recipients 45 days to comply and property owners in Los Angeles and the Central Coast given just two weeks to evict pot dispensaries or growers.

Haag said she is initially going after pot shops located close to schools, parks, sports fields and other places where there are a lot of children.

Wagner also is targeting what he termed "significant commercial operations," including farmland where marijuana is being grown. Andre Birotte Jr., U.S. attorney in the Los Angeles area, is prioritizing dispensaries in communities where local officials have been trying unsuccessfully to shut down marijuana businesses.

Three of the four prosecutors declined to reveal how many dispensaries are subject to closure orders, saying only there were dozens in each of their four districts. Birotte said 38 property owners in his district were sent warnings.

Birotte said his office already had initiated property forfeiture proceedings involving three properties whose owners had received prior warnings. One is an Orange County strip mall where eight of the 11 second-floor suites are occupied by dispensaries and doctors' offices for doctors where healthy individuals obtain "sham" recommendations to use medical marijuana.

It is "a Costco, Walmart-type model that we see across California," Birotte said, alleging that some people making money from medical marijuana openly revel in what some have called "the new California gold rush."

Haag said the move is not designed to clamp down on patients who grow their own marijuana for medical use. But dispensaries that were not part of the initial wave of warning letters "shouldn't take any comfort," she said. "They are illegal under federal law."

"I understand there are people in California who believe marijuana stores should be allowed to exist, but I think we can all agree we don't need marijuana stores across the street from schools and Little League fields," she said.

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Associated Press Writer Lisa Leff in San Francisco contributed to this story.