DISPENSARY ADS NEXT TARGETS IN FEDERAL WAR ON POT

A U.S. attorney in Southern California says she is preparing to go
after newspapers, radio stations and other media outlets that
advertise medical marijuana dispensaries, an escalation in the Obama
administration's newly invigorated war against the state's pot industry.

This month, U.S. attorneys representing four districts in California
announced that the government would single out landlords and property
owners who rent buildings or land where dispensaries sell or
cultivators grow marijuana. Media outlets could be next.

U.S. Attorney Laura Duffy, whose district includes Imperial and San
Diego counties, said marijuana advertising is the next area she's
"going to be moving onto as part of the enforcement efforts in
Southern California."

Duffy said she could not speak for the three other U.S. attorneys in
the state, but noted their efforts have been coordinated so far.

Sacramento's U.S. attorney, Benjamin Wagner, told The Chronicle that
newspapers "are not a focus of our enforcement efforts," and he has
no plans to prosecute them for running ads. U.S. Attorney Andre
Birotte of Los Angeles has not taken any actions against media
outlets that advertise dispensaries, said spokesman Thom Mrozek.

The office of San Francisco's U.S. attorney, Melinda Haag, did not
respond to The Chronicle's inquiries.

Federal law prohibits people from placing ads for illegal drugs,
including marijuana, in "any newspaper, magazine, handbill or other
publication." The law could conceivably extend to online ads.

William Panzer, an attorney who specializes in marijuana defense
cases, said publishers may have reason to worry. Federal law singles
out anyone who "places" an illegal ad in a newspaper or publication.

The penalty for a first offense is a maximum four years in prison;
for someone with a prior felony conviction the maximum sentence is eight years.

The federal law makes an exception for ads that advocate the use of
illegal drugs but don't explicitly offer them for sale or
distribution. Newspapers, Panzer said, could argue that they have a
right under the First Amendment to run the ads.

Duffy said she believes the law gives her the right to prosecute
newspaper publishers or TV station owners.

"If I own a newspaper ... or I own a TV station, and I'm going to
take in your money to place these ads, I'm the person who is placing
these ads," Duffy said. "I am willing to read (the law) expansively,
and if a court wants to more narrowly define it, that would be up to
the court."

Seven states, including California, allow medical marijuana to be
distributed in dispensaries, though more than 200 California cities
and nearly two dozen counties have bans or moratoriums in place on
storefront pot businesses.

Ngaio Bealum, publisher of West Coast Cannabis, said he receives a
significant portion of his revenue from dispensary ads, though he has
tough competition for ad revenue from alternative newspapers and even
the Sacramento Bee, which began running print advertisements for
dispensaries this year.

Bealum said it is "misguided for the Department of Justice to come
after people who are following state law and doing well for the
economy in a recession.

"We're just in doctors' offices and cannabis collectives, where you
have to be 18 years old or where you have to be a patient," he said.

Alternative newspapers throughout the state have benefited from the
increased business, even as other advertising sources have dwindled.

In April, the Sacramento News & Review published a supplement devoted
exclusively to marijuana dispensaries.

The ads in the supplement, which have cost $2,000 for a full page,
allowed the News & Review to hire additional reporters.

California is not the only state struggling with the issue of
marijuana ads. In Colorado, the city of Boulder recently voted to ban
medical marijuana ads that are aimed at young people or recreational
users. Now, the city clerk will decide whether the tone of the ads
crosses the line.

Chronicle staff writer Bob Egelko contributed to this report.

California Watch is a project of the nonprofit Center for
Investigative Reporting. For more, visit californiawatch.org.