ATM INSIDE CANNAHELP IN PALM DESERT, INVESTIGATOR TESTIFIES

Hearing Resumes at 1:30 P.M.

INDIO - An ATM that was regularly stocked with thousands of dollars
was found inside a now-defunct medical marijuana dispensary that also
offered videos, hats and T-shirts for sale, a sheriff's investigator
testified today in the preliminary hearing for the dispensary's owner
and managers, who are facing drug charges.

Stacy Hochanadel, the former owner of CannaHelp, and managers James
Campbell and John Bednar, all 31, are charged with felony possession
of marijuana for sale, transport and sale of marijuana and keeping a
place to sell a controlled substance.

Under California law, marijuana can be sold only on a not-for-profit
basis and on the recommendation of a physician. The sale and use of
the drug for any purpose remains illegal under federal law.

Marijuana and financial records were seized at CannaHelp last
December during the raid conducted by the Riverside County Sheriff's
Department, which alleged the dispensary was a for-profit business.

Sheriff's investigator Robert Garcia testified today that he took
part in the December raid and spoke to Campbell inside the
dispensary, noting that an ATM was inside the building and videos,
hats and T-shirts were being sold.

Garcia said Campbell told him that the dispensary only accepted cash,
and the ATM was filled with $2,000 two to three times per week.

Campbell's attorney objected to the questioning, but Deputy District
Attorney Richard Cookson said the testimony was relevant because it
related to profits at the dispensary. Riverside County Superior Court
Judge Eric G. Helgesen overruled the objection.

The preliminary hearing is being held to determine if there is enough
evidence for the trio to stand trial.

Superior Court Judge Thomas N. Douglass had granted a postponement in
late October after Hochanadel's attorney, Ulrich McNulty, requested
more time to review evidence turned over by prosecutors.

Hochanadel shut down his El Paseo location in mid-September after his
lease expired following the Palm Desert City Council's decision in
May to ban medical marijuana dispensaries.

He then moved to another Palm Desert location, on Highway 111, in
violation of the ban, saying he did not want to let down his 1,500
patients. But Hochanadel bowed to what he called "pressure" from the
city and shut down the location about a week after opening.

Last Dec. 19, CannaHelp's El Paseo location was served with a
cease-and-desist order by the city of Palm Desert following the sale
of marijuana to an undercover officer who did not have a prescription
for the drug.

Hochanadel signed an agreement with the city before the order was
issued in which he agreed to sell only to patients with proper
identification cards issued by the state, according to prosecutors.

After a warrant was issued for their arrests, Hochanadel, Campbell
and Bednar surrendered at the Indio Jail in January.

At Hochanadel's Jan. 9 arraignment, his attorney at the time, James
Warner, said the dispensary was a nonprofit operation and prosecutors
had "no proof" against his client.

However, in August, the judge granted a request by Hochanadel to
remove Warner from the case and replace him with McNulty.

Attorneys for Hochanadel's co-defendants expressed concerns that
Warner could be called as a witness in the case because he allegedly
helped Hochanadel set up the business by providing legal advice.

Hochanadel's Palm Springs attorney, Ulrich McNulty, confirmed through
his secretary Monday that today's hearing would go forward.

Riverside County Superior Court Judge Thomas N. Douglass postponed
the proceeding in late October after McNulty requested more time to
review evidence turned over by prosecutors.

Hochanadel shut down his El Paseo location in mid-September, after
his lease expired, in the wake of the Palm Desert City Council's
decision in May to ban medical marijuana dispensaries.

He then moved to another Palm Desert location, on Highway 111, in
violation of the ban, saying he did not want to let down his 1,500 patients.

Hochanadel bowed to what he called "pressure" from the city and shut
down the location about a week after opening.

CannaHelp's El Paseo location was served with a cease-and-desist
order on Dec. 19 by the city of Palm Desert following the sale of
marijuana to an undercover officer who did not have a prescription
for the drug.

Hochanadel signed an agreement with the city before the order was
issued in which he agreed to sell only to patients with proper
identification cards issued by the state, according to prosecutors.

Under California law, marijuana can be sold only on a not-for-profit
basis and on the recommendation of a physician. The sale and use of
the drug for any purpose remains illegal under federal law.

Marijuana and financial records were seized at CannaHelp last
December during the raid conducted by the Riverside County Sheriff's
Department, which alleged the dispensary was a for-profit business.

After a warrant was issued for their arrests, Hochanadel, Campbell
and Bednar surrendered at the Indio Jail last January.

At Hochanadel's Jan. 9 arraignment, his attorney at the time, James
Warner, said the dispensary was a nonprofit operation and prosecutors
had "no proof" against his client.

However, in August, the judge granted a request by Hochanadel to
remove Warner from the case and replace him with McNulty.

Attorneys for Hochanadel's co-defendants expressed concerns that
Warner could be called as a witness in the case because he allegedly
helped Hochanadel set up the business by providing legal advice.