JUDGE HAS CONCERNS OVER MEDICAL MARIJUANA REFORM LAW

With restrictive state regulations set to go into effect July 1, the
medical marijuana industry seems to be making headway in its lawsuit
to block the new law. Meanwhile, three medical marijuana providers
whose businesses were raided this spring were arraigned in federal
court in Missoula.

In an effort to block the new medical marijuana laws, the Montana
Cannabis Industry Association sued the state in district court in
Helena claiming the law violates patients' right to pursue good health.

from making a profit or being reimbursed for their expenses.

When questioned by the Montana Cannabis Industry Association's
attorney, James Goetz, the top medical marijuana regulator for the
Montana Department of Public Health and Human Service said the new
law was difficult but not impossible to interpret and had unintended
consequences. Roy Kemp noted that under the new law, for example, a
husband could not grow medical marijuana for his sick, card-carrying
wife if they lived under the same roof.

The right to health care does not give patients an unregulated scope
of options, Assistant Montana Attorney General Jim Molloy said,
pointing out that marijuana is still an illegal drug under federal
law. He also said blocking the law would create unintended consequences.

As the three-day hearing closed on June 22, District Court Judge
James Reynolds cited concerns he had with the new law and said he
would issue a decision before July. Reynolds specifically pointed to
the provision barring profits by commercial medical marijuana
businesses. A similar provision does not exist for prescription drug
manufacturers, he said.

The very next day, in federal court in Missoula, three medical
marijuana providers were arraigned on identical charges of
manufacturing marijuana, distribution of marijuana, possession of
marijuana and money laundering. Each faced a mandatory five year
federal prison sentence and up to 40 years in prison and a $5 million fine.

Jason Burns, 40, and Jesse Leland, 40, both of Helena, operated the
Queen City Caregivers business in Helena. Joshua Schultz, 38, of
Helena, operated Natural Medicine, in Great Falls. All three pleaded
not guilty.

Their businesses were among 26 businesses across the state raided by
federal agents and local law enforcement in March and April. Locally
search warrants were executed in Columbia Falls, Whitefish and Olney.
Thousands of marijuana plants, hundreds of kilograms of marijuana,
cash, weapons and vehicles were seized in the raids. About a quarter
of the state's medical marijuana businesses closed following the raids.

"Marijuana is a Schedule 1 controlled narcotic in the United States,"
Michael Cotter, U.S. Attorney for the District of Montana, said about
the June 23 arraignments. "Today's indictment is a step toward
ensuring the alleged large-scale distribution of the addictive and
dangerous gateway drug of marijuana is curtailed in the state of Montana."