THE CANNABIS CONUNDRUM

Butte County Stalls in the March Toward Regulation, Choosing
Prohibition Instead

The day started off like any other. Rick Tognoli was tending to his
indoor garden. Robert Galia was at home with his fiancee. And Hilary
Tellesen was doing laundry. Then unexpected visits turned their lives
upside down.

Tognoli saw the Butte County Sheriff's Office vehicle heading toward
his house and immediately thought the officers were coming to do a
compliance check. He'd recently started an indoor medical-marijuana
garden, part of what he described as "an ultra-self-supporting system"
for his collective, Scripts Only Service (aka SOS). Then he saw four
SUVs pull up behind the sheriff's car and knew something else was going on.

"I opened the door, and they said, 'We have a warrant to look
around,'" said Tognoli, who also owns his own trucking business and
has been outspoken at local City Council and Board of Supervisors
meetings regarding drafting an ordinance for medical-marijuana
collectives.

Several deputies searched through his house, seizing all his plants,
his cell phone, computer, bank records and other papers. He didn't
realize until he tried to use one of his bank accounts that those had
been seized as well--the account for SOS, his personal account and the
one for Tognoli Trucking & Grading.

"Of course, every check bounced," he said. Two of his three trucks
were in the shop at the time, and since he wasn't able to pay for
their repair, he had just one on the road until early last week, when
he paid for the repairs with a personal loan. "I was barely making
enough to pay for fuel for the next day. I estimate [the raid has]
cost my trucking business about $111,000."

Galia's story is similar.

On that Wednesday morning, June 30, Galia and his then-fiancee Edythe
Kohn (they married last month) had just woken up when they heard a
knock on the door of their Butte Creek Canyon home. Sheriff's deputies
seized cell phones, computers and pertinent files and, of course,
uprooted the couple's outdoor marijuana garden. Galia said requests to
see the search warrant were denied, but a copy was left at his North
Valley Holistic Health co-op, which was also raided. When the Galias
tried to use a credit card, they realized their accounts had been frozen.

By the time you read Hilary Tellesen's account of the raid, you'll
have figured out the pattern. Except her case has a disturbing twist.

"I heard something and came out into the hallway and saw police
officers with my son," Tellesen said. She thought a criminal of some
sort was loose in the neighborhood and immediately feared for her
daughter, out playing in the back yard. When the police told her they
had a search warrant, it didn't compute for a full few minutes that
they were there to search her house.

Tellesen's husband, Dylan, has been an outspoken advocate urging the
city and county to create medical-marijuana ordinances outlining how
and where a medical-marijuana collective/dispensary can operate. He's
been so vocal, in fact, that he was astonished to learn that he'd been
connected to CPC, a collective operating out of the Gasoline Alley
warehouse complex where he used to run an art gallery.

The search warrant the police gave Hilary the day of the raid
indicated that, CPC, wrongly identified as Citizen Patient Collective,
would be searched in connection with the Tellesen home. Dylan's
nonprofit, which has been proposed but is not yet in operation, is
named Citizen Collective.

CPC actually stands for California Patients Collective (BCSO had fixed
the error as of last week, when it sent a list of collectives involved
in the raid to the CN&R). Tognoli said he didn't know the guys who ran
it, except that they were from Redding and had another location there.
CPC's fictitious-business statement was filed by a Joshua Rose (not
Dylan Tellesen), the same person who pops up on the collective's
MySpace page.

Tellesen said he was told that he was connected to the dispensary
after someone named him as the person running CPC. A trip to Redding
apparently confirmed his connection in the minds of the deputies.

"I guess I shouldn't have gone to Redding to paint that mural," he
joked during a recent interview.

"I'm supportive of the police doing their job," Tellesen said, "but it
would be insanely easy to do a background check on me. We've been very
public. It's pretty hard to believe that that fact-checking wasn't
available."

The day of the raid, police seized four computers, cell phones,
documents, even a New Yorker magazine featuring a story about pot on
the cover, Hilary noted. When she got to San Francisco with her kids
the following weekend, with $30 in cash and half a tank of gas, she
quickly learned their bank accounts had been frozen.

"It was extremely embarrassing," she said.

Before long, the bank accounts were unfrozen, but Hilary didn't get
her cell phone back until just last week. District Attorney Mike
Ramsey said it was his understanding the BCSO was trying to return the
Tellesens' property immediately. He refused to say, however, that the
search of their home was a mistake. Two computers have yet to be returned.

"My son now thinks the police take things from your house," said
Dylan, who has been holding off on opening Citizen Collective until an
ordinance is in place. "If I wasn't connected, why didn't I get any of
my stuff back to begin with? They took our livelihoods--we live on our
computers." Dylan is a graphic designer and Hilary is a writer.

Whether Tognoli, Galia or Tellesen is guilty remains to be determined.
The Butte County Sheriff's Office is slowly sifting through the
evidence, but no charges have been filed. A problem some of them have
with the raid, however, is that it seemed as though they were assumed
guilty, treated like they were guilty, before being so proven.

From law enforcement's perspective, however, the officers were merely
collecting evidence. In Ramsey's eyes, the collectives were acting
outside the law by continually accepting new members and charging a
fee--even when termed a "donation"--for certain quantities of marijuana.

"Generally, storefront collectives are illegal because you can't sell
marijuana," Ramsey said.

While the collectives mentioned above--SOS and North Valley Holistic
Health--operate as nonprofits and both Tognoli and Galia say they
haven't taken a paycheck since opening, Ramsey said affixing a set
price for a set amount of pot makes them illegal.

"Collectives can only grow marijuana; they cannot sell marijuana," he
explained.

But people like Ralph Bailey, who runs Doctor's Orders Co-op Inc., has
had no trouble with his location in Sacramento. In fact, many other
counties and cities allow storefront collectives, or dispensaries, and
have even created ordinances regarding their operation.

In 2008, state Attorney General Edmund Brown issued a set of
guidelines regarding the growing, dispensing and use of medical
marijuana. The introduction indicates it is to help patients and
caregivers operate under the law, and to help law enforcement perform
their duties. The portion of the guidelines regarding collectives'
right to dispense medical marijuana reads:

"Marijuana grown at a collective or cooperative for medical purposes
may be: a) Provided free to qualified patients and primary caregivers
who are members of the collective or cooperative; b) Provided in
exchange for services rendered to the entity; c) Allocated based on
fees that are reasonably calculated to cover overhead costs and
operating expenses; or d) Any combination of the above."

It's Ramsey's contention, however, that when a collective accepts new
members regularly, it is impossible to set a fixed price for a set
amount of marijuana because the overhead would constantly change.

"In no way can you say that this new member is figuring into what the
overhead cost is," he said.

So when the Butte County Sheriff's Office, which enforces the laws
that Ramsey's office then prosecutes, got wind of storefront
collectives popping up in the Chico area last year, it launched an
investigation.

"We had confirmed one as of last December," explained Sgt. Steve
Collins, who led the raid, which included 13 law-enforcement agencies,
and is leading the team that's going through the evidence. "Then we
saw ads in your paper for others."

The investigation had begun. By the end of June, they had gathered
enough evidence--of what, Collins wouldn't disclose--to get search
warrants for eight storefront collectives in the Chico area and 11
residences associated with those sites. They were raided virtually
simultaneously on that Wednesday morning, June 30.

Collins spoke thoughtfully during an interview last week. Though he
wouldn't speak much to the specifics of the ongoing investigation, he
did say that there were about five officers actively going through the
evidence. He said they're trying to return as much personal property
as they can in a timely manner.

"We're trying to be as sensitive about this as possible," he said. "We
understand these are trying times for everyone."

Collins isn't busy full-time keeping tabs on local dispensaries,
however. As part of the marijuana unit at BCSO, he also concerns
himself with making compliance checks of medical-marijuana grows and
tracking down the large plantations created by Mexican drug cartels
that tend to grow in the forested areas.

Last Wednesday (Aug. 25), Collins took the CN&R along on a compliance
check at a purported medicinal grow at a nondescript home near
Oroville. His visit was, naturally, a surprise to the resident of the
house. The encounter that unfolded was almost comical.

The man who answered the door there told Collins that he simply rented
a room in the house and that he would need to phone his landlord to
get his OK for the check. He went on to say that he didn't know much
of anything about the marijuana production taking place there.
However, after Collins was granted permission to look over the
operation, the man turned off an alarm system and ushered him through
a gate and into a structure containing the doctor's recommendations
legitimizing the cultivation.

He indicated that his landlord lived at the home, but that story
fizzled when the landlord arrived at the site and told Collins he
lived elsewhere. He then explained that he was getting paid by an
out-of-county collective to oversee cultivation for 16 of its medi-pot
members. Posted at the site was laminated paperwork denoting the name
of the Redding-based organization and the number of plants allowed:
200 immature or 96 mature plants.

In a fenced area behind the barn-like building was what should be
described not as a garden, but as an orchard. Deputy Jay Freeman set
to work counting the dark-green bushy plants, most of which towered
six to eight feet tall (or higher) and four to six feet in diameter.
Meanwhile, Collins began writing down the names of the people whose
recommendations were associated with the grow.

Freeman noted that each of the plants would soon yield between three
and five pounds of processed cannabis--that's close to 20 pounds per
patient.

Freeman explained that, depending on the THC content, the street value
ranged from $2,000 to $3,500 per pound. This grow, then, were it bound
for sales, would be worth a minimum of about $600,000. That kind of
money will attract thieves, which is why it made sense that the garden
was home to a makeshift bed constructed out of scrap wood designed for
a nighttime guard.

The grower, of course, insisted his operation is perfectly legal. And
his paperwork, evidently, was sufficient evidence to support that.

Butte County Sheriff Jerry Smith said his department is not concerned
with what he described as "semi-legitimate" organic medical-marijuana
growers. These are people who are cultivating for personal use for
medicinal reasons. He emphasized that the concern is with cultivation
for profit under the guise of Proposition 215--the Compassionate Use
Act.

Passed by California voters 14 years ago this November, the
legislation exempts qualified patients and their caregivers from
criminal prosecution related to possession and cultivation. It also
extends protections to doctors who recommend the drug as medicinal
treatment.

>From the perspective of law enforcement officials, it's become
increasingly easy over the years to exploit Prop 215. What has
resulted is a proliferation of people growing cannabis for profit,
hiding behind the medical-marijuana recommendations.

BCSO Undersheriff Kory Honea mentioned a number of factors leading to
the rise in cultivation, including a 2008 appellate court ruling that
deemed Senate Bill 420's limitations on the amount of cannabis a
patient can possess unconstitutional. The ruling has since been upheld
by the California Supreme Court.

And then last year, U.S. Attorney General Eric Holder issued a
directive to federal prosecutors to focus their investigations only on
those "cultivating substantial amounts of marijuana and doing so in a
way that's inconsistent with federal and state law."

"In my opinion that burst open the dam," Honea said.

Honea reiterated that there are legitimate "true believers" who are
using cannabis medicinally, but there are others, including longtime
drug traffickers, who are growing solely for profit and believe that
the law will shield them.

Smith echoed him, noting that there's big money in this
activity.

"They are out there making tens of thousands, millions, of dollars,"
he said.

The sheriff cited several cases, including that of Casey James
Wilkins, a Chico man who was sentenced last year in Butte County
Superior Court to three years in prison for his role in a major
for-profit pot ring with grows in the eastern foothills and
residential Chico. Wilkins pleaded no contest to charges of illegal
cultivation, possession for sales and money laundering.

Smith has had a birds-eye view of the proliferation of pot in the
rural parts of the county during helicopter flights over the region.
During a recent trip by plane to Redding, he looked down upon grow
after grow, extending the entire stretch of Butte County and into
southern Shasta County.

The sheriff listed a number of consequences he said that voters did
not foresee when they approved Prop 215. He noted that there are
myriad ways these outdoor operations are harming the environment. His
main concern, however, is public safety.

At this point, Smith said the only way to rid Butte County of illegal
grows would be if the state and federal governments agreed to a
zero-tolerance policy. Granted that, it would still be a daunting task.

"If I had 200 men and women and two years, I might be able to do it.
That's how bad it is," he said.

Freeman explained that it's become extremely tough to shut down grows
because of their ability to appear legitimate.

"We have to prove sales," he said. "That's the only way we have a case
and the hardest thing to do."

Sales. That's really what it comes down to, it seems. Even Ramsey
agrees that growing pot individually or collectively for medicinal use
is legal. But when it's exchanged for money, it becomes something different.

Tognoli has become fluent in the language of medical marijuana. While
he needs the herb only occasionally, he believes he's helping others
by offering them a safe place to obtain their medicine. Some members,
like Charles Porter, volunteer at the collective, located off Highway
32, in exchange for marijuana.

"I thank God for Rick," Porter said, making Tognoli blush. "When I
came in here [for the first time], I was in a wheelchair. Now this is
how I get to work," he said, pulling his bicycle from behind the front
desk.

Tognoli was able to reopen the doors of SOS just four days after the
raid. The toughest part, he said, was finding members who were growing
themselves and were willing to donate some of their marijuana to the
collective. Tognoli's garden, which he used to donate to the
collective himself, was seized during the raid. If and when he gets
his plants back, they'll all be dead. They're already dead.

"Are we supposed to water them and make sure they have sunlight?"
Collins asked rhetorically, but not rudely.

More important to Tognoli, however, is that he get his money back.
He's filed three separate motions in court--for the three bank
accounts that were seized--to have law enforcement release those funds
to him. He's due in court next month.

"I'm going to sue the shit out of the county," Tognoli
said.

And he may have a case. Ramsey's interpretation of Proposition 215 and
the attorney general's guidelines for cooperatives is extremely
narrow. When asked how an entity could open a collective within the
parameters of the law, Ramsey said it would be impossible. Merely
using the word "open" implies it's a business, he said.

"Any time you start talking about a business enterprise, you're
talking about profit," Ramsey said. "Collectives or cooperatives are
only for cultivation. There is no provision for sale."

Clearly authorities in other jurisdictions think otherwise. The
communities of Oakland, San Francisco, Sacramento and Redding--just to
name a few--have all taken a proactive approach to what Butte County
views as a problem to be quashed. The city of Chico, in fact, has
drafted an ordinance that sets regulations--including a permit process
for "distribution facilities"--based on the attorney general's
guidelines and other research. The Planning Commission is expected to
bring up the subject again at its Sept. 16 meeting.

So, whether all the time and money (more than $9,000 at the BCSO
alone) spent on June's raid will result in convictions remains to be
seen. If Ramsey's assertion that simply accepting money in exchange
for pot is illegal holds up in court, we'll see the director of each
and every collective arrested and charged before long. Thus far no
charges have been filed, no arrests made.

"I'd love to see the city adopt its ordinance before the investigation
is over," Tognoli said. How much has it cost?

The June 30 raid was led by the Butte County Sheriff's Office and
included officers from Glenn, Plumas, Tehama, Sacramento, Nevada and
Sierra counties as well as the municipalities of Chico, Oroville,
Paradise and Gridley. Chico State police, the Butte Interagency
Narcotic Task Force and the Department of Justice also were involved.
Leading up to the raid, BCSO put in 152 hours of staff time (costing
about $3,555) on the investigation. The raid itself, including
overtime, cost the county $5,622 in wages. The Chico Police Department
contributed 14 officers at a cost of $4,300.