First Charges Handed Down After Medical Pot Raids

Three medical marijuana providers were arraigned Thursday in the first criminal case stemming from a series of federal raids that placed a chill over a once-booming pot industry and preceded sweeping changes to Montana law.

Jason Burns, Jesse Leland and Joshua Schultz pleaded not guilty in U.S. District Court in Missoula to charges of conspiracy, manufacture of marijuana, money laundering, distribution of marijuana and possession with intent to distribute marijuana.

All three have been conditionally released. None immediately returned messages left at phone numbers listed for their businesses.

Schultz, 38, operated Natural Medicine, of Great Falls, while Burns, 38, and Leland, 40, ran Queen City Caregivers in Helena. They were among more than two dozen Montana medical marijuana businesses, warehouses and residences raided by federal agents in March and April.

Agents seized thousands of marijuana plants, hundreds of kilograms of bulk marijuana, plus cash weapons and vehicles in those raids.

Afterward, up to a quarter of the state’s marijuana providers closed their businesses. The Department of Justice followed up with a warning letter to Montana political leaders and those in other states that federal prosecutors will pursue marijuana distributors, though not seriously ill patients who are following state law.

The spring raids and Wednesday’s indictment are part of an ongoing investigation into marijuana distribution in Montana, the U.S. attorney’s office said.

“Today’s indictment is a step towards ensuring the alleged large-scale distribution of the addictive and dangerous gateway drug of marijuana (is) curtailed in the state of Montana,” U.S. Attorney Michael W. Cotter of the District of Montana said in a statement.

The indictment was filed Monday and unsealed Thursday. It alleges that Burns, Leland and Schultz grew marijuana plants at various places around the state, including Helena and Belgrade, and distributed the marijuana in Helena and Great Falls. The charging documents allege they grew more than 100 plants, sold the marijuana and then engaged in illegal interstate commerce with the money.

The indictment seeks the forfeiture of at least $1.3 million received in exchange for growing and selling marijuana, along with a 2001 Mercedes Benz and $7,135 seized from a Great Falls home.

The conspiracy and manufacturing charges each carry maximum penalties of 40 years in prison and $5 million fines. Money laundering carries a 20-year prison term and a $500,000 fine.

After the spring raids, Montana lawmakers, led by a GOP majority seeking to rein in what it called an out-of-control industry, tried to repeal the state’s medical marijuana law. Gov. Brian Schweitzer vetoed the bill.

Instead, the Legislature passed a strict overhaul of the voter-approved medical marijuana law that will ban commercial operations. The new law is due to go into effect on July 1, but a marijuana industry group is challenging it as unconstitutional.

District Judge James Reynolds indicated Wednesday that he might temporarily block parts or all of the law until the case is fully heard.

– Article originally from Bloomberg Businessweek.

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