California U.S. Attorneys Target Pot Growers, Retailers; Letter to Landlord of SF Dispensary Threatening Property Seizure

• US Attorney letter threatening property seizure sent to owner of SF building where dispensary operates
• Audio, transcript: N. Calif US Attorney comments on going after large growers and marijuana retail establishments near schools and parks

Yesterday Andrew Becker and Michael Montgomery previewed the federal government's intention to:

...smother California’s pot industry by targeting not only medical marijuana dispensaries and growers, but also those who do business with them. The latest possible targets: landlords and property owners who rent buildings or land where dispensaries sell or cultivators grow marijuana....

William Panzer, an Oakland attorney who co-authored Proposition 215, the 1996 ballot initiative that legalized medical marijuana in California, said the days are numbered for the current model for medical marijuana dispensaries.

"It's an effective strategy because they're basically saying to landlords, 'If you don't do this, then you lose your property, and we could also come after you criminally,' " he said.

Today, the four U.S. Attorneys for the state of California -- Benjamin B. Wagner of the Eastern District, André Birotte Jr. of the Central District, Laura E. Duffy of the Southern District, and Melinda Haag of the Northern District -- released a joint statement making it official. At a press conference in Sacramento, they delineated enforcement actions being taken, along with justifications for the harder line on marijuana dispensaries.

One of the enforcement steps announced was "letters of warning to the owners and lienholders of properties where illegal marijuana sales are taking place."

Michael Montgomery obtained one such letter sent from Northern California U.S. Attorney Melinda Haag to the owner of property where a San Francisco marijuana dispensary is operating. Here is the closing paragraph:

And here is the full letter.

The LA Times has talked to another letter recipient, the Marin Alliance for Medical Marijuana in Fairfax:

Landlords for some dispensaries have already received letters, including the owner of the building that houses the Marin Alliance for Medical Marijuana inFairfax, 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.

The letter to the Marin Alliance notes that the dispensary is within a prohibited distance of a park, raising the possibility that enforcement will zero in on stores within 1,000 feet of schools and playgrounds, a distance that can bring enhanced penalties for illegal drug sales. But letters received by dispensaries in San Diego make no mention of such prohibitions. "We're trying to figure this out," said Jessica C. McElfresh, who represents some dispensaries in the city. "I am surprised at the size of this. I am surprised by the vast amount of planning that has clearly gone into it."

On the San Jose front, from the Oakland Tribune this morning:

Activists said they weren't aware of any notices received yet in the San Jose area. The San Jose City Council last month approved regulations allowing up to 10 marijuana collectives in a city now believed to have as many as 140, and requiring them to grow all their product on site rather than buying it wholesale from growers -- a requirement that some complained would invite federal drug raids.

Marijuana collectives complain the city's rules would effectively force all of them to close, and so they have launched a drive to collect the required 30,000 signatures of city voters needed to qualify a referendum to repeal the city laws.

Rich Robinson, a San Jose political consultant advising the city referendum drive, said the effort would continue unabated. He called the federal prosecutors' letters a "scare tactic to get as many clubs to close down as possible" and predicted it would fail because "there's too many to enforce."

San Jose City Councilman Pierluigi Oliverio, who led the city effort to regulate and tax medical marijuana shops, suspected the move stemmed from President Obama's concerns his administration's previous tolerance for medical marijuana in states that allow it may hurt his re-election chances. His predecessor, George W. Bush, and other presidents have strongly opposed state efforts to legalize marijuana use even for the sick.

Here's audio of Melinda Haag, US Attorney for Northern California, speaking today.

Audio: Full statement of Northern California U.S. Attorney Melinda Haag on new marijuana enforcement actions

Edited transcript of Haag's statement:

More than 40 years ago our elected federal representatives determined that various substances have a high potential for abuse and no accepted medical use in the United States. Based on these findings, Congress passed laws making it unlawful for people in this country to manufacture, cultivate or distribute various drugs, including heroine, MDA, LSD, and marijuana, among others. In sum, these substances are illegal under federal law. And US Attorneys in California and across the US have an obligation to uphold federal law.

Since 2009, the Department of Justice has given the US Attorneys guidance with respect to marijuana prosecutions and how best to use our limited resources in the marijuana context. For example we will not likely use our limited resources towards individuals with cancer or other serious illnesses or their caregivers who use marijuana based on a doctor's recommendations.

The Attorney General has already made clear, however, that the prosecution of significant traffickers including those involved in the commercial cultivation and distribution of marijuana remains a core priority.

One of the reasons we are making these announcements today is to try to put to rest the notion that large marijuana businesses can shelter themselves under state law and operate w/o fear of federal enforcement. Many in the marijuana industry have portrayed the Oct 2009 Dept of Justice guidance as giving a free pass to any marijuana business that invokes state law or calls its customers patients. That was frankly never correct.

Dept Attorney General James Cole issued guidance on Jun 29 of this year clarifying that the dept is committed to enforcing the Controlled Substances Act in all states and that the 2009 memo was never intended to shield commercial marijuana operations or industrial -sized grows from enforcement actions.

In the N. District of Calif. marijuana cultivators are converting our public lands and pristine forests into large-scale clandestine marijuana grow operat ions. They are cutting down trees and plants, they are diverting streams, polluting the water table, and the land with toxic pesticides. They are starting wildfires, bringing in undocumented workers from Mexico, some of whom may be the victims of human trafficking. Many of these workers who guard the grow operations do so with firearms, thereby endangering hikers who might unwittingly stumble in.

[And when the growers are through] they harvest their crops and leave behind literally tons of trash, unused pesticides, hundreds of miles of plastic piping, camping equipment and human waste…

Residents and visitors…are increasingly intimidated by the prospect of armed drug traffickers and illegal cultivation sites. sites. People sadly know not to go hiking in certain areas during the summer months because they're likely to encounter illegal grow operations.…

Another challenge ..is the proliferation of retail marijuana stores. I think it's safe to say there are more than a thousand of them in my district alone. The California Compassionate Use Act was intended to help seriously ill people. But the law has been hijacked by profiteers who are motivated not by compassion, but by money. Even under Calif law, marijuana cultivation is supposed to be not for profit. What we are finding is that people are using the cover of medical marijuana to make extraordinary amounts of money. In short to engage in drug trafficking. And many of these drug trafficking operations are in plain site. In many communities like mine you can't walk a mile without seeing multiple retail marijuana stores, sometimes surrounded by fences and patrolled by security guards. If you sit and watch for a moment, you see cars pulling over, seemingly young healthy people jumping out of the cars, running into the store, and emerging with paper bags full of marijuana.

Some of these operations allow their customers to smoke marijuana while on the premises. Presumably at least some of them get back into their cars and drive away impaired. There's a reason for the security guards and fences; where there's marijuana there's money and lots of it. these places are prime targets for robberies and violence...

[Because of limited resources] I have decided to focus initially on stores that sell marijuana and allow people to smoke marijuana very close to schools, parks and other places where children learn and play.

Last week we sent letters to the landlords and lien holders of these stores, putting them on notice that marijuana is being sold and used on their property in close proximity to children and that the operations must cease. I understand that there are people in California who believe that marijuana stores should be allowed to exist. But I trust these same people would all agree we don't need marijuana retail outlets across the street from playgrounds and schools and little league fields.

And from today's press release by the state's U.S. Attorneys:

SACRAMENTO, Calif.October 7, 2011 – The four California-based United States 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 United States 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.

The enforcement actions being announced today are the result of the four United States 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." Full statement