2011 WRAP-UP

California's year in medical marijuana might best be summed up with
the story of prominent Sacramento County dispensary Magnolia Wellness.

Sporting huge ads and a great selection of strains such as Violator
Kush, the Orangevale club boasted an estimated 40,000 patients at its
peak. But it drew increasing fire from fed up local and federal
prohibitionist-minded officials. Facing fines and potential
forfeiture, Magnolia held a widely publicized marijuana giveaway on
Friday, December 16. Hundreds of patients lined up for free grams as
police cruisers idled nearby.

All across California, the billion-dollar medical-marijuana industry
attained new heights in 2011-and drew a corresponding backlash from
hard-line law enforcement. The sour economy, combined with marijuana's
increased acceptance and the industry's perceived safety, created a
2011 boom in clubs-and with it behavior some viewed not only federally
illegal, but also in violation of murky state guidelines.

"It was going to cause a reaction," said Sacramento dispensary
attorney George Mull, "and it did."

The feds lashed back October 7, in a press conference marketing a new
crackdown of widely flouted pot laws. Just like under former President
George W. Bush, hundreds of marijuana-business landlords across the
state received letters threatening forfeiture of their property.

Kris Hermes, spokesperson for one of the biggest national patient
lobbies, Americans for Safe Access, called it "a total PR campaign" in
the face of an ascendant movement.

"It was a very unique press conference with all four U.S. attorneys.
It virtually never happens, let alone on the issue of medical
marijuana," he said.

U.S. Attorney Benjamin Wagner and posse claimed to be targeting the
worst violators of federal law, but "really what's going on is
widespread intimidation and an attempt to undermine the entire
medical-marijuana movement in California," Hermes said.

When the dust settled, battlegrounds Sacramento and San Diego ranked
as the two places hardest hit. The majority of clubs in Sacramento
County have closed, and letters also closed clubs in the city.

In December, Sacramento County-who said such clubs were never legal in
the first place-banned any storefront business that violated federal
law.

Many California cities have stopped permitting new clubs and farms,
said Debby Goldsberry, a longtime Bay Area activist and winner of the
High Times Freedom Fighter of the Year in 2011. They're afraid of
federal prosecution and changing state law.

"The feds have threatened to arrest city council members," she said.
"That's foul. It's not democracy as we know it."

The city of Sacramento also halted its permitting process. Existing
clubs in the city must still pay a 4 percent sales tax, thanks to the
voter-approved Measure C. City officials had expected the tax measure,
which went into effect in July, to raise $1 million in its first
fiscal year, though it's unclear how much it has actually brought in.

"We're taking it one day at a time," said one Sacramento city operator
who didn't want to be named for fear of federal reprisal.

And he should be afraid. Unlike San Francisco, where U.S. Attorney
Melinda Haag has targeted three permitted clubs, Sacramento is under
the control of U.S. Attorney Wagner, who's spent the year busting up
not only shady dispensaries but also black-market megafarms, U.S.
Department of Justice press releases state. Wagner's office is cited
on 157 DOJ press releases for marijuana enforcement in the last year.

For instance, Wagner ended the remote town of Isleton's plan to tax
and permit a pot farm this summer. The October 7 press conference was
just the latest in a pattern of increasing federal discontent with
what they see as the Wild West in California.

California is thought to have several hundred thousand qualified
patients. The High Times Medical Cannabis Cup pulled into San
Francisco this summer and brought with it a scene straight out of
Amsterdam, with thousands sampling hash and nary an arrest. Meanwhile,
200 Amsterdam police raided the actual High Times Cannabis Cup for the
first time in its 24-year history.

Fifty percent of Americans now support legalizing pot, a Gallup Poll
found this year, and the California Medical Association, which
represents more than 35,000 physicians statewide, urged legalization
for the first time this year.

Dr. Donald Lyman, the Sacramento doctor who wrote the group's new
policy, said prohibition is a bigger health risk than the herb.

Time Magazine named "The Protester" as its person of the year, and
medical marijuana has become an issue for the 99 percent, activist
Goldsberry said. 2012 promises a wave of people-powered efforts such
as referendums and initiatives not only at the state level, but also
at the local level.

Case in point: Some Sacramento County citizens intend to go around
their leaders and regulate their clubs at the ballot box next year.
Helping lead that charge, none other than Magnolia Wellness.

"If it doesn't kill you, it's going to make you stronger, and medical
cannabis is going to be stronger after the crackdown," said
Goldsberry.