POLICE RAID SMITHS FALLS OFFICES OF MEDICINAL MARIJUANA COMPANY

Move Comes As Users Launch Major Court Challenge After Health Canada Says
It Can't License Firm

A medicinal marijuana grow operation that was to be part of a challenge to
Canada's marijuana laws was raided by Smiths Falls police yesterday, after
it was revealed that the company had started to grow marijuana before it
received a licence to operate.

Police seized 221 marijuana plants from the headquarters of the Carasel
Harvest Supply Corporation, with an estimated street value of approximately
$220,000. It was the largest drug seizure ever conducted by the Smiths
Falls police force.

Though police were aware of Carasel's intentions for the site, they had not
been told that operations were under way.

"It was news to our service that there was anything growing there," said
Chief Larry Hardy following the raid. "We instructed the individuals
involved that until such time as they are properly licensed, that they
should not be growing. Our investigation is now ongoing, with charges pending."

Carasel CEO Samantha Klinck could not be reached for comment following the
raid.

Carasel set up shop at a former Canadian Tire location in February, and,
according to Ms. Klinck, performed extensive renovations on the site.

Ms. Klinck attended a town council planning meeting on Tuesday night to
propose a bylaw amendment to have the company's headquarters rezoned as a
greenhouse, but it was not made clear to council that the company had
already begun growing plants there.

Outside of the meeting, Ms. Klinck told the Citizen her company had started
growing plants to supply chronically ill patients with marijuana as quickly
as possible. She said the company's Health Canada licence was pending.

Earlier this week, Carasel's operation became part of a challenge to a
Health Canada policy that restricts who can legally grow medicinal
marijuana, and how much they can grow. Under current Health Canada policy,
individuals licensed to use marijuana can buy it from a single government
contractor, can grow it themselves or can authorize another person to grow it.

Last October, the Ontario Court of Appeals ruled that Health Canada's
policy of restricting third-party growers to a single customer was "an
unconstitutional obstacle to access," according to Alan Young, a professor
at Osgoode Hall law school in Toronto.

On Tuesday, 30 licensed medicinal marijuana users, mostly from Toronto,
filed a lawsuit

in federal court asking that Carasel be licensed to supply them with
medicinal marijuana, after Health Canada told the company it could not
process its application for a "multiple designated producer."

If the lawsuit is successful, it could open the door to large, private
medicinal marijuana-growing operations.

Mr. Young plans to testify in an affidavit that Health Canada has not
heeded the court's ruling, and continues to restrict medicinal marijuana
growers to one customer. He speculates that Health Canada "prefers (that)
people use the government supply."

Many customers of the government's marijuana source have complained in the
past that the marijuana provided to them has been weak, and Mr. Young said
many have even returned their drugs because of the poor quality.

Aggie Adamczyk, a spokeswoman for Health Canada, said that the agency has a
contract with Prairie Plant Systems of Flin Flon, Man., that runs through
December 2005, and is "presently meeting all of the government of Canada's
needs." Ms. Adamczyk said that Health Canada "will not pursue another
contract" with a private supplier of marijuana.

"Carasel's strategy is not currently within Health Canada's policy," she
said, adding that the Ontario Court of Appeal's ruling last fall did
instigate some policy changes. Among them, Ms. Adamczyk said, was the
elimination of a restriction that prevented single-customer pot growers
from making money off their crop.

Ron Marzel, a lawyer representing the 30 people who want to use Carasel as
their supplier, said his clients were all licensed medical marijuana users,
many of them suffering from diseases such as multiple sclerosis and AIDS.

"There's a lot of greater interest" in this case, Mr. Marzel, of the law
firm Marzel and Associates, said, adding that this was the first challenge
to Health Canada's medicinal marijuana policy since the Court of Appeal ruling.

But even if Carasel supporters win their case in federal court, the company
could still have legal problems closer to home. Gladys Weinstein, a retired
chartered accountant who lives with her daughter, Caren, up the street from
the site, said she would take the company to court "if necessary," should
their presence in her neighbourhood lower her home's value.

Ms. Weinstein said she would petition the city to lower her property taxes
if she proved her home lost value as a result of the marijuana grow-op's
presence, and said she would also go after Carasel for the difference in
lost property value.

"You pay for what you do," she said. "We all do."

Prior to yesterday's raid, Smiths Falls police indicated they did not
object to a legal marijuana operation in this town on the Rideau Canal, 80
kilometres southwest of Ottawa.

"It's like any other business operating in town," said deputy police chief
Pat Dolan. "If they meet the requirements and they're licensed and the
zoning changes are done, it's like any business operating in town."

"So far, any dealings we have had with the town have been very positive,"
Ms. Klinck said the night before the raid.

Wendy Alford, a Smiths Falls town councillor who has been supportive of
Carasel's plans, said she was disappointed by the way things turned out.

"I'm sure our chief of police did what he had to do," said Ms. Alford. "I
do hope that Samantha Klinck can sort this out."

Wayne Brown, Smiths Falls' director of corporate services, said it was not
unusual for businesses to begin setting up shop before all the licences are
in place.

"We would allow a business to function for a period of time" if the
business is expected to get a licence, Mr. Brown said. "It's not frequent,
but it does happen. The only thing strange about this case is that it's a
sensitive subject."

Mr. Brown added that he did not see any opposition to the grow-op on Smiths
Falls city council, and added he was not opposed to a legal grow-op.

"If marijuana helps people get them through the day ... I don't have an
aversion to having it in Smiths Falls.