DEA BUSTS HAYWARD MARIJUANA DISPENSARY

Investigators Find 30 Pounds of Pot on Premises, 10 Times City's Legal Limit

HAYWARD -- The Local Patients Cooperative marijuana dispensary was
raided by the federal Drug Enforcement Administration on Tuesday as
part of a yearlong investigation that also involved the Internal
Revenue Service and Hayward police.

"The distribution of marijuana is a federal offense, and this place
was making millions of dollars," said DEA Assistant Special Agent in
Charge Michael Chapman.

Along with the Foothill Boulevard marijuana club, two additional
residences in Hayward were raided and searched, authorities said.
Northbound traffic on Foothill, between B and C streets, was halted
during the police activity.

Shon Matthew Squier, 34, owner of the dispensary, and Valerie Lynn
Herschel, 23, manager, both of Hayward, were arrested on suspicion of
conspiracy to distribute marijuana and the distribution of marijuana.
Law enforcement agents had five federal warrants to search the
facility, Squier's and Herschel's residences and their cars,
according to authorities.

Squier and Herschel are scheduled to appear at 10 a.m. today in U.S.
District Court in Oakland before Magistrate Judge Wayne D. Brazil.

Authorities said several vehicles were seized in the raid, including
two Mercedes, a Hummer, a Cadillac Escalade, and Harley Davidson and
Ducati motorcycles; indoor marijuana growing equipment; an estimated
200 marijuana plants; and marijuana-laced cookies, brownies, popcorn and pies.

Cash seized by investigators from the dispensary and residences
totaled $200,000, and another $2.1 million in associated bank
accounts. The IRS routinely works with the DEA on the financial side
of an investigation of this kind, a DEA spokesman said.

The maximum statutory penalties for conspiracy to distribute and
distribution of marijuana charges are 20 years imprisonment, a $1
million fine and a three-year term of supervised release.

Federal agents were alerted to the activity of the dispensary during
a separate investigation, and began looking into the operation in October 2005.

"At some point during their investigation, they contacted us and
requested our help," said Hayward Police Capt. Phil Ribera. "We
provided information from several observations we made concerning
cultivation at the site and amounts of marijuana."

The dispensary, one of two in Hayward located on the same block of
Foothill Boulevard, was to be closed by local authorities at the end
of this month for breaking its three-year agreement for operating
within the city. City officials said the cooperative had more than 3
pounds of marijuana on the premises at one time, in violation of city
regulations.

Hayward police inspected the club in September and said they observed
30 pounds of marijuana -- 10 times more than the city allows.
Officers returned in November and said they observed 200 pounds.

Sticking to the 3-pound rule is impossible because of the volume of
patients the club serves, an employee of the dispensary said in a
previous interview earlier in the week.

According to the criminal complaint, the cooperative attempted to
disguise the breadth of its criminal activity by claiming that it
caters exclusively to people suffering from medical illnesses, when
people without any medical conditions can purchase marijuana at the
retail establishment.

"There is no difference in the street price," said DEA public affairs
officer Casey McHenry, pointing out that an ounce of marijuana at the
club cost the same as on the street, between $300 and $320.

"This was a money-making business," she said.

The passage of Proposition 215 by California voters in 1996 allows
doctor-approved medical use of marijuana. But McHenry said the
distribution of marijuana is a violation of federal law and that the
Supremacy Clause in the U.S. Constitution allows federal law to
supersede state regulations.

News of the raid was met with protests by Americans for Safe Access,
a national grassroots coalition based in Oakland that works to
protect the rights of patients and doctors to use marijuana for
medical purposes. The organization was established four years ago in
response to federal raids of marijuana dispensaries in California.

"California has made a decision," said Tom Dolphin, communications
director for Americans for Safe Access. "We want the federal
government to stop circumventing California law."

A Hayward resident, who has a doctor's prescription to use marijuana
for symptoms related to HIV and went to the dispensary once a week to
fill his prescription, expressed frustration with the raid of the facility.

"They were very good to residents of Hayward," he said.

The dispensary gave a 10 percent discount to city residents. The man
said he will probably start going to the other dispensary nearby.