Federal prosecutors launched an attack on medical marijuana shop owners last week, vowing to shutter state-licensed marijuana dispensaries regulated by local governments and threatening landlords with property seizures. The decision to crack down on medical pot establishments in the Golden State was a collective decision by four U.S. attorneys in California and not the result of any directive from Washington, according to a spokesman for California-based U.S. Attorney Andre Birotte Jr. Continue reading after the jump.
The announcement came in spite of the Obama administration’s campaign promise to maintain a hands-off approach toward pot clinics adhering to state law, with Attorney General Eric Holder publicly asserting that federal prosecutors would not initiate enforcement actions against any patients or providers in compliance with state law, deeming it an inefficient use of scarce government resources.
Now California-based U.S. attorneys are taking on the battle themselves.
“There was no particular incident that prompted our enforcement actions,” Thom Mrozek, spokesman for Birotte, told HuffPost in an email on Friday. “Across the state, we have seen a fairly significant increase in the problem over the past couple of years. And, at least in our district, our actions were prompted in part by widespread concern among local officials – the City of Lake Forest is a particularly good example of this.”
On Thursday the owners of eight Lake Forest medical marijuana shops were given three days to close operations. Birotte said the shops were targeted because they violated a zoning ordinance and the city had already spent almost $600,000 in legal fees to have them removed.
Other dispensaries could simply be taxed out of existence.
Last month, Harborside Health Center lost a high-stakes battle with the Internal Revenue Service, in a ruling that could have dire consequences for the thriving California industry. The IRS has ruled pot clinics cannot deduct operating expenses from their tax returns, recently informing Harborside, a dispensary where medical marijuana patients can buy legal cannabis in Oakland and San Jose, that it owed $2.5 million in taxes, a full $2 million more than the the 83,000-member dispensary actually paid.
“The areas in which the initial warnings have been sent are all areas where local officials have taken steps to eliminate marijuana stores and have asked the federal government for assistance,” Mrozek told HuffPost, adding that the United States Attorney’s Office will continue to work with local municipalities and local law enforcement throughout California’s central district to assist in ongoing efforts to combat commercial marijuana operations.
Last week three pot shops in San Francisco were targeted by California’s U.S. attorneys, with dispensary landlords receiving threatening letters from Northern District U.S. Attorney Melinda Haag, who cited increasing federal penalties for drug activity within 1,000 feet of school zones and other public spaces, even as some of the city’s clubs were exempted under a grandfathering system.
But there appears to be no evidence that the intervention was provoked at the behest of local officials. San Francisco city officials, when contacted by The Huffington Post, could not confirm they had put in any requests with Haag’s office.
Federal prosecutors have also suggested the industry has been hijacked by pot profiteers.
“All the evidence indicates that the marijuana stores in California are for-profit enterprises, which is one reason why we’re using term ‘stores’ for these operations,” Mrozek said. “I am not saying that there are no true non-profit collectives involving only patients and their primary caregivers that are operating stores – there may be, but we have not seen one yet. This statement is based on numerous federal investigations, as well as numerous investigations and prosecutions by local officials throughout the state.”
While none of the dispensaries are IRS approved 501(c) nonprofits, many, like Harborside, a state registered not-for-profit corporation, say they go out of their way to give significant revenue back to the community by donating to local charities.
Earlier this week, U.S. Attorney Laura E. Duffy, whose district includes San Diego County, announced plans to target newspaper and radio outlets advertising medical marijuana. “I’m not just seeing print advertising, I’m actually hearing radio and seeing TV advertising,” she said in an interview with California Watch and KQED. “It’s gone mainstream. Not only is it inappropriate – one has to wonder what kind of message we’re sending to our children.”
But the three other U.S. attorneys charged with enforcing state laws have not signaled support for Duffy’s line of attack.
“Our office is not targeting newspapers or publications that accept advertising money from the medication marijuana industry,” Lauren Horwood, spokeswoman for the U.S. attorney’s office for the Eastern District of California, told HuffPost on Friday.
Meanwhile, legalization advocates say they fear Obama administration officials will be too busy to intervene. Tom Angell, spokesman for legalization advocacy group Law Enforcement Against Prohibition, explains:
I think it’s mostly a case of aloofness on the part of the president and his closest advisers. My hunch is that this is the doing of career drug war bureaucrats somewhere in the DoJ who are quite terrified of the increasing public acceptance of regulated marijuana distribution. They’ve made a calculation – sadly correct so far – that the president doesn’t care enough about this issue to intervene. Unfortunately for the president, though, voters are going to blame him at the ballot box.
Others insist the directives did in fact come from Washington.
“I don’t believe that for a second,” said Steve De Angelo, executive director of Harborside, when told federal prosecutors said the decision for a crackdown was made in California. “The recent actions by the U.S. attorneys in California are part of what appears to be a coordinated multi-agency assault by the federal government on the entire medical cannabis community, and that assault seems to be directed at systems of regulated and licensed systems of cultivation and distribution.”
