Feds Could Move Against California’s Pot Boom

As soon as today, Attorney General Eric Holder is expected to release a letter clarifying the Justice Department’s policy toward the 15 states that have approved medical marijuana laws.

Of particular importance to California is whether federal authorities will tolerate states, cities or counties licensing and regulating commercial marijuana growing and distribution.

Tommy LaNier of the National Marijuana Initiative, which is funded by the White House, is unequivocal: “That, in very simple terms, is what drug traffickers do,” LaNier says.

Justice Department officials in California say they are stepping up a broad enforcement strategy that could target medical marijuana operators even if they are in compliance with state medical marijuana laws.

But Jay Rorty, an attorney with the American Civil Liberties Union, says those warnings violate previous assurances from federal officials.

“It’s important that the DOJ makes clear that people who are complying with valid state law do not fear federal prosecution,” Rorty says.

Rorty and others insist that was the promise made in a 2009 Justice Department memo, which he interprets this way: Comply with state law, and federal officials won’t prosecute you.

But Justice Department officials are saying the exemption applies only to seriously ill people, not commercial growers or medical marijuana distribution outlets.

In a co-production with the Center for Investigative Reporting, KQED’s “The California Report” took a closer look at the Obama administration’s pushback on medical marijuana and how it’s stifling the growth of the medical marijuana industry in cities like Oakland. The story is the first installment in the forthcoming multimedia series “Republic of Cannabis.”

– Article from California Watch.


Feds Threaten to Extinguish California’s Pot Boom

by Michael Montgomery, California Report

With demand for medical marijuana surging around the country, some cities and states are looking to license commercial growing, including in California. Local officials say regulating the industry protects public safety and is a good source of tax revenue. But now the Obama administration is pushing back.

Last October business and city leaders gathered with medical marijuana growers and activists in a gritty industrial compound in east Oakland.

With DJs on hand, the crowd was inaugurating a super-store for pot growing supplies — and celebrating plans to open four industrial-scale medical pot farms under a new city ordinance.

Oakland Mayor Jean Quan spoke at the event, welcoming the potential tax windfall.

“When these cultivation facilities come online, we’re estimating in the first few years five to eight million dollars. Now that’s a sizeable chunk of change and it’s going to be an important part of this city’s economy,” said Quan.

Eight months later, Oakland’s plans are in tatters following stern warnings from the U.S. Justice Department that licensing of commercial marijuana growing, even for medical use, violates federal law.

At a large industrial park just off the Oakland’s 880 Freeway, developer Jeff Wilcox walks into a giant concrete and glass warehouse. It’s empty.

“This building was dubbed the football field of cannabis during our heyday. We were going to have 380 employees, and the average pay was about $52,000 [a year]per person,” said Wilcox.

Wilcox thought the facility would be safe from the feds as long as the operation closely complied with the city’s regulations and state laws. But today he sees things differently.

“The industry is scared that there’s a big push back coming against us,” said Wilcox.

The push back isn’t just against Oakland. Recently, the Justice Department warned officials in eight other states that they would be violating federal law if they allowed commercial production of medical marijuana.

“That, in very simple terms, is what drug traffickers do. That is drug trafficking period,” said Tommy LaNier, director of the National Marijuana Initiative, a program funded by the White House Office on Drug Control Policy.

LaNier says the tripwire for the Feds’ tough new posture came last year after Californians narrowly rejected Proposition 19, a measure to legalize recreational pot use. He says officials then zeroed in on local medical marijuana schemes like Oakland’s, and decided to threaten prosecution.

“They’re not going to go after someone who’s standing on the corner or in their home using marijuana. This is going to be targeting those individuals who are facilitating production, trafficking, engaged in the distribution,” La Nier said.

LaNier says the Justice Department letters state pointedly that even local officials could face criminal charges. But Jay Rorty, an ACLU attorney, says those warnings violate previous assurances from the Feds.

“It’s important that the DOJ makes clear that people who are complying with valid state law do not fear federal prosecution,” Rorty said.

Rorty and others insist that was the promise made in a 2009 Justice Department memo, which essentially stated: comply with state law and the feds won’t prosecute you. But Justice Department officials are saying the exemption only applies to seriously-ill people, not commercial growers and not medical marijuana distribution outlets.

Benjamin Wagner, the US Attorney for California’s Eastern District, says the Justice Department will enforce federal law.

“We’ve met with the DEA in this regard. People from Washington have been out to California to coordinate a statewide enforcement strategy,” Wagner said.

It’s unclear whether the Feds will target the state’s most established medical marijuana operators, like Harborside Health Center in Oakland.

On a recent afternoon at Harborside, dozens of customers were eagerly inspecting gleaming glass cases displaying well-manicured marijuana buds. Despite a grueling audit battle with the IRS, owner Steve Deangelo says Harborside is turning over millions of dollars in sales each month. Still, he says, medical marijuana remains a risky business.

“Until federal law changes, this is not an industry, it’s a movement. And anybody who gets involved in distributing medical cannabis has to be prepared to be arrested and have a monumental challenge on your hands,” said Deangelo.

Oakland city officials say they haven’t given up on plans to license marijuana cultivation. But for his part, developer Jeff Wilcox says the Feds’ warnings have scared off people who wanted to invest in a legitimately regulated business.

“You want to try to start an industry and then you have the IRS working against you, the federal government working against you — you’ve got a real problem,” said Wilcox. “So the problem is if you don’t grow this industry what happens is that it remains a black-market industry, and it’s always going to be that way.”

Medical-marijuana supporters are calling on the Obama administration to clarify the recent warnings. Sources close to the Justice Department say Attorney General Eric Holder is planning to do just that, in a letter that will be released soon.

– Article from California Report.

Comments

5 Comments

  1. Anonymous on

    It only shows how ignorant these people are, every time they open their mouth you can see that there is an error with their thinking.. “that is what drug dealers do”? no, that is what legal drug sellers do and the state made that drug legal. THAT is what people operating within a states laws should and would be doing. The reason why the disparity is because a drug that has medical use has been banned by the feds and they do not want to face up to their mistake. Maybe its time to grow up and admit the glaring mistake.

    They said that they would not bust people in compliance with state law but now they are trying to stop the state lawmakers making laws that allow for production. so tell us then, who are people supposed to get their supply of legal drugs from? That person standing on the street, that person at home that they will not bust because they have a legitimate medical need for the substance…where is the legal supply coming from? Just like there is a legal supply coming for all other medically useful drugs..
    Only these goons can not work this one out or is it more so the case that they are hoping that the general populace does not see this glaring error. They really feared the slim margin from prop 19 and its going to happen again and again until it all falls away anything they do from now on will only make the people unhappy with the federal stance. No wonder they dont plan on busting the people in their homes or standing on the corner but likening the suppliers to drug dealers must be their only resort.

  2. Anonymous on

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  3. Anonymous on

    MARIJUANA PROHIBITION MAKES LYME WEAPON POWERFUL

    YOU HAVE TO FIGHT FOR REAL!

    The people in the present authority who deny your god given right to cure have to be prosecuted by the citizens of the world — like yesterday please.

    Jesse Ventura brings to consciousness for everyone the truth of the biological war creating a living holocaust on North America. Under Our Skin the Lyme disease awareness movie brings the devastating consequences of the biological weapon to the audiences of the world.

    Marijuana prohibition is what made the Lyme weapon so very powerful. The womb of the mother must be defended by every living citizen that cares about having any chance to be reborn healthy.

    PLEASE PLEASE DO YOUR PART NOW!

  4. Anonymous on

    Here comes the real “change”, as opposed to the hypocritical, empty rhetoric Obama campaigned on.

  5. TheOracle on

    Holder and his ilk should do something that allows DC’s medical cannabis to be implemented practically and definitely without the Feds being able to swoop in for the slamdunk medical marijuana bust.