LEGAL ISSUE INTERRUPTS PRELIMINARY HEARING IN MEDICAL MARIJUANA CASE

RED BLUFF -- A legal issue central to the defense has interrupted a
preliminary hearing for two Red Bluff men accused of cultivating
marijuana and possessing marijuana for sale.

Tehama County Superior Court Judge John Garaventa on Thursday
continued until Sept. 23 the case against businessman Joseph Froome,
48, and his son-in-law, 26-year-old Daniel Ludwig. Froome also is
charged with eight counts of money laundering.

The hearing to determine whether sufficient evidence exists for the
men to stand trial began Wednesday. Defense lawyers maintain their
clients had established a legitimate medical marijuana cooperative at
a Baker Road warehouse when they were arrested Oct. 21.

Meanwhile, state Department of Justice financial investigator Scott
Ray testified Thursday his analysis of Froome's personal and business
bank accounts in 2009 showed $178,299 in "unexplained income,"
including large cash deposits, which the witness believed was "in
large part attributable to sales of marijuana."

Two of the three accounts belong to J&K Motorsports, producer of
monster truck shows in Red Bluff.

But William Panzer, Froome's Oakland attorney, challenged Ray's
conclusions and how he reached them.

Under questioning, Ray acknowledged that he had seen no records to
indicate the source of money deposited in the accounts and that his
opinions were based on bank statements and discussions with agents.

At the end of Ray's testimony, Deputy District Attorney Matt Rogers
said he would be the last prosecution witness.

After the hearing, Panzer said he had requested Garaventa's ruling on
the exchange of money within medical marijuana patient associations.
Eric Clay, a district attorney's office investigator assigned to the
Tehama Interagency Drug Enforcement (TIDE) task force, had testified
Wednesday he believes only primary caregivers can be compensated -- a
position that contradicts appellate rulings and guidelines issued by
Attorney General Jerry Brown, Panzer said.

If the judge rules no money can be exchanged "our defense would be
irrelevant," he said.

Panzer is a co-author of Proposition 215, the voter-approved
Compassionate Use Act of 1996. It allows qualified patients to use and
grow marijuana within certain guidelines.

Panzer expressed frustration that 14 years later, much remains
unsettled.

"It's sad," he said. "What's really going on here are technicalities
and loopholes to ban medical marijuana. Let's figure out a reasonable
way to regulate it."

At the time of the Baker Road raid, TIDE agents found 402 marijuana
plants growing in a building within a building and nearly 34 pounds of
drying marijuana. They also seized $9,591 from Froome's Paynes Creek
Road home.

Oakland attorney James Silva is representing Ludwig. The September
hearing is expected to conclude in one day.