FEDS ANNOUNCE CALIF. POT DISPENSARY CRACKDOWN

Federal Authorities in California Vowed to Shut Down Dozens of Pot
Growing and Sales Operations in a Major Crackdown, Saying the Worst
Offenders Are Using the Cover of Medical Marijuana to Act As
Storefront Drug Dealers.

The aggresiving crackdown comes a little more than two months after
the Obama administration toughened its stand on medical marijuana.

Prosecutors Friday described it as the first coordinated statewide
offensive against marijuana dealers and suppliers who use California's
15-year-old medical marijuana law as legal cover for running
sophisticated drug trafficking ventures in plain sight.

U.S. Attorney Benjamin Wagner cited a 2009 federal study that 72
percent of marijuana plants eradicated nationwide were grown in California.

"California's marijuana industry supplies the nation," he
said.

The actions were geared toward stopping a proliferation that has led
to thousands of pot shops opening their doors across the state. The
spread was fueled partly by the Obama administration's assurance two
years ago that it did not plan to devote federal resources to
countering marijuana outlets operating in compliance with state laws.

One example cited by the prosecutors Friday: In one Orange County
strip mall, eight of the 11 second-floor suites are occupied by
dispensaries and doctors' offices for doctors where healthy
individuals obtain "sham" recommendations to use medical marijuana.

It is "a Costco, Walmart-type model that we see across California,"
said Andre Birotte Jr., U.S. attorney in the Los Angeles-area. Some
people making money from medical marijuana openly revel in what some
have called "the new California gold rush," he said.

Landlords leasing property to dozens of warehouses and agricultural
parcels where marijuana is being grown and retail spaces where pot is
sold over the counter are receiving written warnings to evict their
tenants or face criminal charges or seizure of their assets, the
state's four U.S. attorneys said.

"The intention regarding medical marijuana under California state law
was to allow marijuana to be supplied to seriously ill people on a
nonprofit basis," said U.S. Attorney Melinda Haag, the top federal law
enforcement officer for the San Francisco Bay area. "What we are
finding, however, is that California's laws have been hijacked by
people who are in this to get rich and don't care at all about sick
people."

For two years before the federal government's toughened stand,
officials had indicated they would not move aggressively against
dispensaries in compliance with laws in the 16 states where pot is
legal for people with doctors' recommendations.

The Department of Justice issued a policy memo to federal prosecutors
in late June stating that marijuana dispensaries and licensed growers
in states with medical marijuana laws could face prosecution for
violating federal drug and money-laundering laws. The effort to
shutter California dispensaries appeared to be the most far-reaching
effort so far to put that guidance into action.

Increased federal intervention will likely unify marijuana growers and
sellers in a drive to change federal policy, National Cannabis
Industry Association spokeswoman Melissa Milam said.

"We're not going anywhere. We're mothers, we're patients, we're family
members of patients," she said. "We want to pay taxes, we want to be
able to make deposits at our bank, we want to be a business."

Not all of the thousands of storefront pot dispensaries thought to be
operating in the state are being targeted in the crackdown, which also
involves new indictments and arrests of marijuana growers and vendors
throughout the state over the past two weeks, said Wagner, who
represents the state's Central Valley.

The strategies federal authorities are using vary somewhat, with
warning letters issued by the U.S. attorney in San Diego giving
recipients 45 days to comply and property owners in Los Angeles,
Orange County and the Central Coast given just two weeks to evict pot
dispensaries or growers.

Haag said she is initially going after pot shops located close to
schools, parks, sports fields and other places where there are a lot
of children.

Wagner, who represents the state's Central Valley, also is targeting
what he termed "significant commercial operations," including farmland
where marijuana is being grown. Birotte is prioritizing dispensaries
in communities where local officials have been trying unsuccessfully
to shut down marijuana businesses.

Moreover, the four said their warnings were aimed at cities and
counties that have started licensing and taxing marijuana shops.

The California Board of Equalization has estimated medical marijuana
generates between $53 million and $104 million in annual sales taxes
on sales of between $700 million and $1.3 billion.

"If it creates revenue and jobs and increases safety, with all that's
going on in the world and the nation, why is the federal government
mounting this assault - just because they can?" asked attorney Mark
Reichel, who represents three licensed Sacramento dispensaries that
face federal charges or civil forfeitures.

More than a dozen dispensaries named by officials either did not
respond to telephone messages or refused to comment on the closure
demands. Damian Nassiri, a lawyer for two of dispensaries inside the
Orange County shopping center authorities cited, predicting it would
not be long before the owner sends his clients packing.

"These collectives had a hard time finding landlords who were willing
to rent to them," Nassiri said.

Three of the four prosecutors declined to reveal how many dispensaries
are subject to closure orders. Birotte said 38 property owners in his
district were sent warnings.

Birotte said his office already had initiated property forfeiture
proceedings involving three properties whose owners had received prior
warnings.

The effort was criticized by two Democrat state legislators who
represent San Francisco.

Assemblyman Tom Ammiano said the crackdown "means that Obama's medical
marijuana policies are worse than Bush and Clinton. It's a tragic
return to failed policies that will cost the state millions in tax
revenue and harm countless lives."

"I don't understand the politics of it, and certainly if we haven't
learned anything over the past century, it's that Prohibition does not
work," added State Sen. Mark Leno, who has worked to safeguard and
regulate medical marijuana in California.

Wagner said individual U.S. attorneys general in other states
including Nevada, Oregon and Washington state have also coordinated
actions with the U.S. Department of Justice.