FEDS UNVEIL CHARGES AGAINST SOME MEDICAL MARIJUANA OPERATORS IN CALIFORNIA

Declaring that California's medical marijuana law "has been hijacked
by profiteers," U.S. prosecutors announced charges Friday against
dispensaries, growers and financial speculators throughout the
state's medicinal pot market.

California's four U.S. attorneys also said they have seized
properties of landlords facilitating the marijuana trade. And they
delivered a rhetorical indictment of medical marijuana's evolution
into cannabis commerce.

"The California Compassionate Use Act was intended to help seriously
ill people," said San Francisco U.S. Attorney Melinda Haag, referring
to the 1996 initiative that made California the first state to
legalize marijuana for medical use. "But the law has been hijacked by
profiteers who are motivated not by compassion but by money."

In a Sacramento news conference, Haag and U.S. attorneys from
Sacramento, Los Angeles and San Diego detailed criminal cases against
people who they said were pocketing mountains of cash from
dispensaries that are supposed to operate as nonprofits under state law.

The charges come as the U.S. attorneys are sending out dozens of
letters across California, warning dispensaries and landlords of
potential prosecution and telling them to cease selling or growing
marijuana within 45 days.

"Our intention is not to prosecute everybody in the state," said
Benjamin Wagner, the U.S. attorney in Sacramento. "Our intention is
to get people's attention in order to deter this activity."

On Friday, Wagner announced a criminal complaint that alleged a Los
Angeles attorney, Nathan Hoffman, raked in millions of dollars while
organizing a vast growing network for marijuana dispensaries in
Southern California.

Wagner said Hoffman's "wide-ranging conspiracy to organize and
finance major marijuana grows" brought in people such as
prize-winning Sutter County tomato growers Thomas Jopson, 62, and
David Jopson, 60. The brothers were indicted this summer along with
an Oakland medical marijuana entrepreneur, Yan Ebyam.

Los Angeles U.S. Attorney Andre Birotte Jr. also announced an
indictment charging six people from a former North Hollywood
dispensary, NoHo Caregivers, with illegal drug trafficking.

The L.A. indictment alleged dispensary operators, pot growers and
alleged couriers were sending 600 to 700 pounds of purported
California medical marijuana to New York and Pennsylvania. Birotte
said he is seeking to seize $14.7 million in proceeds from the operation.

In another case, Birotte said he is seeking seizure of an Orange
County strip mall, where a landlord leased space to eight marijuana
stores across the street from a preschool.

Holding up a marijuana magazine showing a pot leaf and wads of cash,
Birotte assailed "brick and mortar Costo/Wal-Mart dispensaries" that
he contended are turning huge profits "in a new California Gold Rush."

Outside the Sacramento federal courthouse where the news conference
was held, marijuana advocates, including people with doctors'
recommendations for medicinal use, marched and chanted, "We're
healers, not dealers."

They charged that the federal government is launching an assault on
the will of California voters who legalized medical marijuana and on
sick people who need places to buy it.

David Brock, a Sacramento attorney who advises marijuana dispensaries
on how to follow California's medical marijuana law, said
prosecutions of alleged misconduct in the industry should be dealt
with in state court not through federal raids.

"They (federal prosecutors) need to respect the rights of the states
instead of coming in with these heavy-handed and bullying tactics," Brock said.

Dan Rush, whose United Food & Commercial Workers International Union
has organized 700 medical marijuana workers in California, said the
U.S. attorneys were broadly and unfairly tainting an industry that
largely operates legally and professionally.

Besides providing marijuana to people with medical needs, Rush said,
dispensaries "are providing well-paying jobs and health care to
thousands of families in the middle of the recession."

Wagner said U.S. prosecutors in California have no intention "to
target the backyard grows and small amounts of marijuana" cultivated
"for use by seriously ill people." But he said pot stores are illegal
under U.S. law.

Outside the courthouse, F. Aaron Smith, executive director of the
Cannabis Industry Association, a Washington D.C., lobbying group,
said dispensaries are necessary for delivering marijuana to medical users.

"If they're saying they want cancer patients growing in their
backyards, that means we are going to have thousands of unregulated
grows," Smith said. "What we're asking for is a legal, licensed
regulated system ... for people to obtain their medicine."

The U.S. attorneys offered a starkly different picture.

Birotte decried Los Angeles billboards advertising services of
medical marijuana physicians, whom he blasted as doling out medical
recommendations "solely for the purpose of recreational use."

San Diego U.S. Attorney Laura Duffy, who on Sept. 30 unsealed an
indictment against two dispensaries and a network of growers, alleged
the pot stores were marketing to customers under 21, including some
likely to provide marijuana to children.

She took issue with dispensary pot treats, including "marijuana-laden
cotton candy, flavored like bubble gum, and packaged with pictures of a clown.

"This is not a marketing campaign that is aimed at people under the
supervision of a doctor," Duffy said.