FEDS TARGET S.B. MEDICAL MARIJUANA SHOPS

Up in Smoke?

After enjoying years of relatively hassle-free business, Santa
Barbara's medical marijuana scene is feeling the heat this week, with
a distinctly ganja-scented cloud of uncertainty hanging over its
future in the wake of a federal Drug Enforcement Administration (DEA)
letter-writing campaign.

In recent days, more than a dozen local property owners have received
word from the DEA that they could face the potential seizure of their
property and assets if they continue to rent space to cannabis
companies - a threat that has dispensary operators and building
owners alike waiting to exhale. Feeling the fallout from the letters,
at least two of the City of Santa Barbara's 10 dispensaries are
facing eviction notices, while many others are working overtime with
their landlords to prevent a similar fate from befalling their
storefronts. "Make no mistake about it: The DEA has officially come
to Santa Barbara," said Jennifer Nelson, the head of Santa Barbara's
chapter of Americans for Safe Access (ASA), a national nonprofit
dedicated to protecting the rights of medical marijuana patients.

Though no actual litigation has yet resulted, the DEA has in the past
month sent out at least 150 similar letters to property owners
throughout the state - the bulk of them to addresses in Southern
California, said Kris Hermes, an ASA spokesperson. "Basically, for no
more than the cost of postage, [the DEA] gets to shut down as many
dispensaries as possible," Hermes said. In his estimation, the
letters are "no more than scare tactics," given the fact that in the
11 years since Proposition 215 was implemented in California, the
federal government has been successful only twice in seizing a
building or house related to a medical marijuana dispensary raid.
That being said, Hermes admits the letter campaign is a huge setback
for dispensaries, as it works to scare away both current and
potential landlords. "Without a doubt, this makes it more difficult
to operate facilities in Santa Barbara and throughout California, for
that matter."

An informal survey of Santa Barbara's 10 dispensaries on Tuesday
morning showed business as usual for club owners and employees,
though all universally expressed a certain degree of worry about
eviction or - even worse - a federal raid. "If nothing else, this is
a reality check for us," said one of Santa Barbara's longtime
operators. "It is a reminder of the serious risks we and our
landlords take ... Let's just hope it isn't a sign of things to
come." Another club owner, who had already been told he was going to
be evicted in coming weeks, commented, "As a businessman, I can't say
I blame them. Unfortunately, this makes it up to the landlords from
now on and whether they personally want to take a stand or not."
(Both dispensary operators asked that their names not be used.)

Adding a serious wrinkle to the DEA development, the Santa Barbara
City Council voted unanimously this week to place a moratorium on
medical cannabis clubs within city limits. Retroactive to August 14,
the decision - which was supported by a coalition of club owners -
was meant to stop the perceived proliferation of dispensaries pending
the development of a set of universal rules and regulations governing
everything from zoning to hours of operation for the clubs. While an
unknown number of businesses are grandfathered in under this
legislation and therefore exempt from the moratorium, it remains to
be seen whether clubs evicted in the coming weeks will lose their
grandfathered status, given that their current business licenses are
based upon addresses that might become inaccurate if their businesses
were to be evicted.