OWNERS OF TWO WEST HOLLYWOOD MARIJUANA DISPENSARIES INDICTED

The owners and operators of four marijuana dispensaries, including
two in West Hollywood, were indicted yesterday on charges they
conspired to distribute and distributed large quantities of
marijuana, including to minors, for significant profits, prosecutors
said.

Also indicted was a medical doctor who is accused of writing
marijuana recommendations for payment including recommendations for
minors with no medical examinations.

In 1996, voters in California adopted Proposition 215, which
authorizes the distribution of "medical marijuana" in certain
circumstances, with a doctor's recommendation. Under federal law,
however, distribution of marijuana for any purpose is illegal.

Among those indicted were Larry R. Kristich and James Carberry,
identified as the operators of a chain of marijuana stores called
"Compassionate Caregivers," located in Oakland, San Francisco, San
Leandro, Ukiah, Bakersfield, San Diego and West Hollywood.

Prosecutors said sales of marijuana and THC-laced products at the
stores totaled more than $95 million, and that Kristich used profits
from marijuana sales to purchase expensive automobiles and real
estate in Costa Rica. Kristich and a business associate, James L.
Ealy, allegedly set up non-drug-related businesses to launder the
profits of the marijuana stores.

Carberry also allegedly managed a marijuana store in West Hollywood
known as "Yellow House." Yellow House allegedly had an ATM machine
and credit card readers in the store to facilitate purchases totaling
more than $1.7 million in a single month.

Charles C. Lynch is charged with having owned and operated "Central
Coast Compassionate Caregivers" in Morro Bay, where he and his
employees allegedly sold more than $2.1 million in marijuana in a
one-year time period. During that year, prosecutors charge, Lynch and
his employees sold marijuana to 281 minors.

Also charged in the indictment is Dr. Armand T. Tollette Jr., who
allegedly wrote marijuana recommendations for patrons of the Morro
Bay marijuana store. Tollete allegedly paid "finder's fees" in
marijuana for client referrals.

In a separate indictment, John C. Moreaux, a former "Compassionate
Caregivers" employee, was indicted for operating a second marijuana
store in West Hollywood and for possessing a firearm inside the
store, which he is prohibited from doing as a convicted felon.

Another indictment charges Ronald B. Naulls, who operated the
"Healing Nations Collective" marijuana store in a shopping center in
Corona, with selling more than $1.2 million in marijuana in a
nine-month period.

Under federal law, prosecutors noted, conspiracy to distribute
marijuana carries a sentence of up to 40 years in prison, while a
violation of the money-laundering statute carries a sentence of up to
20 years in prison.