ORDER IS AIMED AT CLOSING SAN FRANSISCO OPERATION

Pot clubs may survive despite order by top court

The California Supreme Court on Wednesday clouded the future of the state's
medicinal marijuana clubs, upholding a lower court ruling that would shut
down the San Francisco operation of Proposition 215 author Dennis Peron.

But despite the high court's action and predictions by California Attorney
General Dan Lungren, most marijuana clubs across the state are unlikely to
close anytime soon. In fact, such clubs as the Santa Clara County Medical
Cannabis Center in San Jose and Oakland's Cannabis Buyers' Cooperative are
expected to survive for now -- in large part by distancing themselves from
the way Peron's Cannabis Cultivators Club does business.

``I don't think there is an easy, fast answer,'' said Santa Clara County
Assistant District Attorney Karyn Sinunu, whose office has permitted the
San Jose club to operate under strict regulations. ``But I don't think
anything is going to be the death knell for medicinal marijuana.''

Added Jim McClelland, chief financial officer of the Oakland pot center:
``If I were a betting man, I'd say not much will come of this. Lungren will
try to use it as leverage to close all the clubs, and I don't think he'll
be successful in doing that.''

Lungren's office did vow to move quickly to close down Peron's operation,
and a state lawyer said the Supreme Court decision warrants a ban on all
such clubs throughout California.

But as recently as last month, Lungren backed off on threats to use the
Peron court case to seek the closing of other marijuana clubs. And it
remains to be seen whether he is willing to force the issue in places such
as San Jose, where law enforcement officials have backed the clubs.

California voters in November 1996 approved Proposition 215, which allows
the possession and cultivation of marijuana if its use is approved by a
doctor.

Since then, medicinal marijuana operations have opened in more than a dozen
cities throughout the state, offering the drug to people suffering from the
pain and nausea associated with such diseases as AIDS and cancer.

Peron's club has been ground zero in the battle over medicinal marijuana
from the start, with Lungren targeting the outspoken medicinal pot advocate
for flouting the state's drug laws. Critics have alleged that Peron has not
maintained the level of controls on the distribution of marijuana at his
clubs that exists in other operations. Peron has defended his club and its
role in helping the sick obtain medicinal pot.

Order rekindles dispute

The state's high court rekindled the furor over the clubs with Wednesday's
brief order, which let stand a December ruling by the San Francisco-based
1st District Court of Appeal. In that ruling, a three-justice panel found
that Proposition 215 did not permit commercial operations to sell
marijuana.

In language that has now been endorsed by the state Supreme Court, the 1st
District said the intent of Proposition 215 ``was to allow persons to
cultivate and possess a sufficient amount of marijuana for their own
approved medical purposes, and to allow `primary caregivers' the same
authority to act on behalf of those patients too ill or bedridden to do
so.''

The appellate court concluded that clubs such as Peron's do not qualify as
a ``primary caregiver.''

But other club operators around the Bay Area say they believe they can
survive the legal test established under the ruling, an argument expected
to be used to fight attempts to shut them.

``This case dealt with a specific situation and said this situation isn't
allowed,'' said Oakland lawyer William Panzer, who represents clubs in
Oakland, Marin and Ventura. ``No, it doesn't shut down the clubs.''

Official doesn't foresee problem

Peter Baez, head of the Santa Clara County medicinal marijuana center on
Meridian Avenue, agreed.

``I think (the Peron case) is going to have a big impact on Lungren's
ability to selectively close down the cannabis centers,'' Baez said. ``But
if you play by the rules, I think you are going to be OK.''

According to lawyers following the issue, the bigger legal challenges to
the clubs' existence are pending federal court lawsuits filed last month by
the U.S. Justice Department.

Those cases seek to shut six Northern California clubs -- San Jose's is not
among them -- arguing that federal drug laws foreclose the clubs' ability
to sell marijuana under the ballot initiative, regardless of whether it is
for medicinal purposes.

San Francisco U.S. District Judge Charles Breyer, who is hearing all six
cases, is expected to consider the federal government's case in March.

Lawyers for the pot clubs predict that the Justice Department will try to
use the state court ruling to its advantage.

Peron, meanwhile, pledged Wednesday to keep his club open ``until the tanks
come in.''

Peron maintains his club has operated differently since the passage of
Proposition 215 and that the court case has dealt with how he distributed
marijuana before the initiative went into effect.

``They defined the parameters of Prop. 215,'' Peron said of the appellate
court ruling. ``We've been in accordance with the law for some time. That's
what I envisioned when I wrote the law.''