FED POT CRACKDOWN HITS COLO. SHOPS NEAR SCHOOLS

DENVER - Federal officials on Thursday began a California-style
crackdown on medical marijuana dispensaries in Colorado that targets
those located near schools, setting up a possible showdown with
businesses that worked closely with state lawmakers to develop
regulations they hoped would prevent such an action.

U.S. Attorney John Walsh said 23 dispensaries within 1,000 feet of
schools have until Feb. 27 to shut down or face federal penalties,
which can include asset seizure or forfeiture of property. The warning
letters dated Thursday were being sent to dispensary owners and their
landlords. He said the letters were a first step and prosecutors were
looking for medical marijuana businesses to target near schools.
Walsh's office declined to release a list of targeted businesses,
saying they do not make public individuals under investigation.

Rob Corry, a Denver lawyer who represents dispensaries and was a
member of a task force that wrote Colorado's regulations, said some of
his clients have received letters. He said he advised them to fight
the threats, which he called a "massive bluff."

"(Walsh)'s declaring war on state lawmakers who set up a highly
regulated medical marijuana industry," Corry said. "There's an entire
state bureaucracy devoted to this, not to mention thousands of jobs
and countless sick people."

State regulations prohibit medical marijuana businesses within 1,000
feet of schools but grandfathered in those businesses already in
existence before regulations were passed in 2010.

Sixteen states have passed laws allowing medical marijuana, beginning
with California in 1996. Unlike California, Washington, and Montana,
where federal officials have cracked down on businesses sanctioned by
the state, Colorado's industry is heavily state-regulated. A ballot
measure is pending to make it legal for recreational use, and state
officials have asked the federal government to recognize the herb as
medicine.

"When the voters of Colorado passed the limited medical marijuana
amendment in 2000, they could not have anticipated that their vote
would be used to justify large marijuana stores located within blocks
of our schools," Walsh said.

In California, four U.S. attorneys sent similar letters to
dispensaries, with some of them closing. It was unclear what actions
were taken by authorities against those that didn't close or move.

Colorado's medical marijuana industry began its boom after a September
2009 memo by then-Deputy Attorney General David Ogden that said
federal prosecutors should not focus investigative resources on
patients and caregivers complying with state laws. But faced with
dispensaries and states passing laws regulating medical marijuana,
Ogden's replacement, James Cole, in June issued another memo that took
a tougher stance and said state medical marijuana laws do not provide
immunity from federal prosecution.

He said commercial enterprises that sell or profit from marijuana
sales should be a priority. He reinforced that cancer patients and
caregivers shouldn't be targeted.

Colorado's attorney general, John Suthers, who opposed regulations
under the argument that they legitimize an illegal enterprise under
federal law, said he long warned lawmakers of the clash between state
and federal law.

"I would expect the federal government having jurisdiction, to do what
they think is necessary to limit drug problems in the state of
Colorado," Suthers said in a recent interview with The Associated
Press. "I'm not going to oppose it."

Colorado has more than 600 retail shops, 900 cultivations and 230
infused product manufacturers operating under state law, according to
the state revenue department. A spokeswoman for the department's
Medical Marijuana Enforcement Division did not immediately return a
call Thursday.

Samantha Beckmann manages a dispensary across from a high school, with
the school's baseball fields on the other side of a crosswalk of a
busy street. She said the U.S. attorney's action is discriminatory
because it singles out certain dispensaries.

"We will move. We will make it happen," she said. "If they're going to
do anything, they should shut everyone down. They shouldn't
discriminate."

Outside the Colorado state Capitol, about three dozen marijuana
activists rallied as Democratic Gov. John Hickenlooper gave his annual
State of the State address. The governor did not mention pot, though
he signed a marijuana regulation law last year and his administration
recently joined other states in asking the Drug Enforcement
Administration to reclassify marijuana so that it could be considered
a medical treatment.

A community organizer at the marijuana rally said he wasn't surprised
by the crackdown. He blamed state authorities and the state's larger
marijuana businesses for setting up elaborate rules for how medical
marijuana can be bought and sold.

"They set up all these rules and now they're coming back to pinch them
in the butt," said Miguel Lopez of The Denver 4/20 rally, which
attracted 20,000 people last year. Lopez favors full legalization for
the drug, not Colorado's system of dispensaries regulated by the state
Department of Revenue.