ARIZONA MEDICAL POT LAW NO SHIELD FOR USERS, GROWERS, PROSECUTOR SAYS

Arizona's top federal prosecutor launched a pre-emptive strike
against the state's medical-marijuana industry Monday, warning
prospective pot growers and sellers that they could be prosecuted
under federal drug-trafficking laws.

U.S. Attorney Dennis Burke, joining a growing chorus of federal law
officers across the country, said his office will abide by a 2009
Justice Department memo that discourages prosecution of
medical-marijuana users. But he said anyone who possesses or
distributes marijuana is still violating federal law. And he singled
out large operations.

"The (Controlled Substances Act) may be vigorously enforced against
large marijuana-production facilities," Burke wrote to Will Humble,
director of the state Department of Health Services. "This compliance
with Arizona laws and regulations does not provide a safe harbor, nor
immunity from federal prosecution."

Opponents of the voter-approved law called on Gov. Jan Brewer to shut
it down immediately, saying Burke's letter makes clear that state
regulation of medical pot is illegal and anyone involved with
dispensaries or cultivation sites could risk prosecution.

Even supporters said mounting federal pressure likely will have a
chilling effect on the fledgling industry. They predicted a move
toward smaller, tightly regulated operations and called the U.S.
attorney's stance "reactionary." "If you increase the legal demand
and don't increase the legal supply, you're going to increase
revenues for the drug cartels," said Andrew Myers, co-founder of the
Arizona Medical Marijuana Association, who led the campaign for
Proposition 203 in Arizona.

Brewer said she was unaware of Burke's letter, but she doesn't intend
to stop implementation of the program. "It was passed by the voters,
and we've tried to implement the voters' wishes," Brewer said.
Maricopa County Attorney Bill Montgomery said Burke's letter
clarifies that federal authorities, despite their reluctance to
prosecute sick people, will not look the other way when it comes to
marijuana cultivation and distribution.

"I think this is the end of the medical-marijuana movement,"
Montgomery said. "You can't do a wink and a nod toward unlawful
conduct and not have a consequence."

Burke said he wrote the letter "in response to numerous inquiries and
to ensure there is no confusion regarding the Department of Justice's
view of such a regulatory scheme." It follows similar correspondence
in recent weeks between federal prosecutors, attorneys general and
governors in several other states, and dispensary and greenhouse
raids in Washington, Montana, Colorado and California.

On Monday, Rhode Island Gov. Lincoln Chafee halted the state's
medical marijuana dispensary program after the U.S. attorney for his
district threatened to prosecute those involved with licensing
"compassion centers" there.

Washington Gov. Christine Gregoire on Friday vetoed a bill in to
regulate the medical-marijuana industry, which voters approved in
1998. Federal prosecutors also made good on a promise to crack down
on landlords who leased their property to dispensaries, raiding
several Spokane dispensaries on Thursday.

In his two-page letter, Burke said "individuals and organizations -
including property owners, landlords and financiers" could be
prosecuted under federal drug-trafficking laws. But he made no
mention of Arizona employees, who have been processing ID cards for
hundreds of medical-marijuana users and are preparing to license
dispensaries and cultivation sites this summer.

Montgomery said he believes state, county and municipal employees
could be at risk if they help people use, grow or sell marijuana.

But Humble said he's not worried about his staff and believes
Arizona's program will continue to operate, if on a smaller scale, in
the wake of Burke's letter.

"It looks to me like a big shot across the bow for folks who were
thinking about building a very large cultivation facility or a very
large dispensary," Humble said. "I don't think it's going to end the
program. I do think it's going to change what the program looks like."

Scottsdale attorney Jordan Rose, who advises potential dispensary
owners, said Burke's letter should not change Arizona's medical
marijuana landscape.

"There is a risk, and it cannot be minimized," Rose said. "But if
anybody is saying the sky is falling, they didn't read the federal
government's position."

In a letter to U.S. attorneys in October 2009, deputy U.S. Attorney
General David Ogden indicated that, in light of the burgeoning
industry and the variety of state laws, the administration didn't
intend to prosecute sick people who used medical pot or the
caregivers who provided it. The "Odgen memo" made clear that
marijuana remains illegal and that federal prosecutors will go after
drug traffickers, but some say the memo triggered the industry's
growth in Colorado, California and elsewhere.

Arizona law limits to 12 the number of plants an individual can grow.
But there are no limits to the size of a dispensary, and owners are
allowed to operate separate cultivation sites, where they can grow an
unlimited amount of marijuana.

Burke and other U.S. attorneys have mentioned "large" or
"large-scale" operations in their letters to state officials, though
they have not defined what that means.

Myers said most would-be dispensary owners had planned to grow
upwards of 1,000 plants to supply their non-profit dispensaries. "I
think it's not hard to imagine that people are going to be scared off
by something like this," Myers said.

Burke was in Washington, D.C., on Monday and unavailable for comment.

Rep. John Kavanagh, R-Fountain Hills, said Burke's letter is reason
enough for Humble to stop issuing marijuana cards and halt plans for
granting dispensary permits.

"I hope he doesn't think the Legislature is going to bail him out if
he facilitates the distribution of marijuana," Kavanagh said. "The
federal government has told him that this is an illegal operation. I
don't think they have to do the math for him."