POT FARM PROJECT SHUTS IN ISLETON AFTER FEDERAL WARNING

Facing threat of criminal prosecution by the federal government, the
group planning to build a large medical marijuana farm in Isleton has
killed the project.

"It's over," Sacramento attorney William Portanova said of his
client's plans to cultivate up to 30,000 square feet of marijuana
plants. "As far as this project goes, it's over and will not be revived."

Portanova made his comments Wednesday, two days after his client,
Michael Brubeck, received a three-page letter from U.S. Attorney
Benjamin Wagner warning that the plan violates federal law, "even if
such activities are permitted under state law."

"Individuals who elect to operate industrial marijuana cultivation
facilities will be doing so in violation of federal law," Wagner
wrote, adding that such an effort could result in criminal
prosecution, asset forfeiture and civil fines.

Portanova, a former federal prosecutor in Sacramento, said his client
quickly got the message.

"When the letter was received, we advised they shut it down and get
out of town," he said. "So that's the end of it."

The project, which city officials say has cost Brubeck and his Delta
Allied Growers group about $700,000 so far, is the focus of a
Sacramento County grand jury probe. That investigation broadened this
week with a new batch of subpoenas issued in an effort that had been
expected to last three days.

Now, witnesses are to be called over the next three weeks as the panel
and District Attorney Jan Scully's office investigate allegations of
kickbacks to city officials and the financing of the project, which
its organizers said was to operate as a nonprofit.

Isleton officials have denied wrongdoing and initially vowed to resist
the grand jury investigation by invoking their Fifth Amendment rights
against answering questions.

Last week, the panel granted immunity to several witnesses, including
City Manager Bruce Pope, and heard hours of testimony about the
financial details of the plan, The Bee has learned.

But the potential for a federal probe, which could result in prison
terms ranging from five years to life for defendants convicted of
marijuana cultivation and distribution, persuaded Delta Allied to
abandon its plans.

The decision comes amid growing efforts by the federal government to
halt large-scale marijuana growing efforts that provide the drug under
state laws that allow its use for medical purposes.

Wagner's letter echoes others sent by federal prosecutors nationwide
in recent months, including one sent to officials this week in
Arizona, where voters approved a medical pot law in November.

The Justice Department said in a 2009 memorandum that it would not
target ill individuals who use marijuana under a medical
recommendation, but prosecutors have emphasized that cultivation and
distribution of the drug are illegal under federal law.

Federal prosecutors and Internal Revenue Service investigators have
targeted some large-scale marijuana cultivation centers, and some
California district attorneys have increased their efforts to limit
the spread of dispensaries and other medical marijuana operations.

The conflicting ordinances and enforcement efforts have frustrated
Isleton officials, who note that the city of Sacramento and others
routinely take in taxes, fees and other payments from medical
marijuana dispensaries.

In Sacramento County, staffers have been working seven months to draft
an ordinance governing dispensaries and expect to present it to the
Board of Supervisors for a vote in the next two months.

"The city of Sacramento's doing it, the county, they're both taking
revenues," Pope said. "So why is it a problem if we do it?"

Isleton officials contend their efforts to bring the medical marijuana
growing operation to town was done legally and in the open, and would
have provided a windfall for the cash-strapped city.

The city approved the plan last September with the understanding that
the growers would pay Isleton 3 percent of their gross revenues, or at
least $25,000, every month.

That money, plus $80,000 the growers paid the city in a one-time
administrative fee, was to be used at Isleton's "discretion to advance
the general interests of the city," the development agreement states.

Leaders of the Delta town, which has a population of about 800
residents, envisioned using the pot money to add police officers to
their two-person force and to install surveillance cameras around town
for security.

The pot farm had been expected to be in operation by now, but the
grand jury probe halted its progress and no crops are being grown at
the site, officials say.

Pope said the city has been paid about $200,000 so far by Delta Allied
and that the group has spent about $500,000 on the facility. He added
that it is obvious work there has been shut down.

"If you go out to the site, there are no generators, no lights, it's
all shut down," Pope said, adding that he hopes the group will return
once the investigations are concluded.

But, he added, he is not confident.

"I'm not going to be looking for $25,000 the first of the month, I'll
tell you that," he said.