3 NABBED IN POT BUST POST BAIL

Court Papers Say Medical Tag Was Smoke Screen

Investigators believe three men affiliated with a San Francisco medical
marijuana club used state law as a smoke screen and actually sold the drug
for profit to almost anyone, according to court papers.

The trio, along with another man, were arrested in a series of raids
throughout the Bay Area on Tuesday. Agents seized 8,135 marijuana plants,
$58,500 in cash and two guns, a Drug Enforcement Administration spokesman said.

The arrested include two Oakland men, marijuana writer and activist Ed
Rosenthal, 56, and James Halloran, 61. On Wednesday, they were freed on
$500,000 bail each, while Kenneth Hayes, 34, of Petaluma was freed by a
Vancouver, British Columbia, judge without posting any bail.

Richard Watts, 47, of San Francisco remains in federal custody at least
until a bail hearing Friday.

Hayes is the accused ringleader. His lawyer, John Conroy, said the
government's drug-dealing claims are "obviously" blown out of proportion.
Conroy said the drugs were for medical use and not part of an illegal
smuggling operation.

Hayes and Watts are accused of helping run the Harm Reduction Center
medical marijuana club in San Francisco. Rosenthal is accused of growing
pot in Oakland for the club.

Halloran's lawyer, Dennis Roberts, said his client also is accused of being
a grower.

The DEA's case is based partly on testimony from confidential informants
and undercover agents, affidavits show.

More information came from a January letter to the DEA from someone
claiming to be a member of a church which dispenses medical marijuana, who
said he was angry at "greedy, professional drug dealers who hide behind the
shield of Proposition 215."

Informants and agents say Hayes, Watts and other Harm staffers sold them
prepared marijuana and immature plants without any significant controls,
documents say. The DEA tracked more than $900,000 passing through Hayes'
and the center's bank accounts from June 2000 through last October.

Some drugs also were smuggled in from Canada, the papers say.

Rosenthal's attorney, William Panzer, noted Wednesday that state law allows
caregivers to be reimbursed for costs of acquiring, producing and
dispensing medical marijuana without running afoul of drug sale laws.

He said he expects the complaint filed Tuesday will be replaced by a
federal grand jury indictment more clearly outlining the government's case.
If not, he said, then he'll move to sever Rosenthal's case from the
others': "There's no basis for trying them together."

The men were arrested when DEA agents raided Rosenthal's home office and
other Oakland sites, the Harm center and Hayes' Petaluma home.

Although the DEA denies a link, medical marijuana advocates believe it's no
coincidence the raids occurred while DEA chief Asa Hutchinson was in town
to speak about the war on drugs.

After the raids, protesters showed up at Hutchinson's speech to tell the
feds to stay out of California's business. State law says medical use of
marijuana is legal; federal law says it isn't.

The raids also spooked other cannabis clubs. Cheryl Adams, who operates the
Hayward Patient Group in downtown Hayward, said she kept her doors closed
Tuesday in fear of agents.

"We're not in it for the money," Adams said. "Whatever money I do make, I
put right back into the club."

So far, federal prosecutors have not moved to have Hayes extradited from
Canada. If they do, attorney Conroy said, then Hayes will resist, and the
resulting legal battle could last several years.

Conroy said there wasn't an illegal smuggling operation. He said Hayes
probably sought Canadian marijuana because the "B.C. bud" is cheaper and of
better quality.

To fight extradition, Hayes could request refugee status. And the ongoing
medical marijuana debate between federal and state authorities will only
help his case should he argue that he would face political persecution if
sent back to the United States, Conroy said.

Hayes also faces a marijuana production charge in Canada, Conroy said.

Hayes' marijuana cultivation has been no secret. He and others were
arrested in 1999 after Sonoma County sheriff's deputies found almost 900
plants at Hayes' Petaluma home. They said the plants were for a different
San Francisco medical marijuana club, and were acquitted after a trial that
included San Francisco District Attorney Terence Hallinan testifying on
their behalf.

Tuesday's raids have Hallinan fuming, but Alameda County District Attorney
Thomas Orloff said Wednesday that"it's really hard to figure out what ought
to happen in these situations -- it's clear it's still a violation of
federal law. The state has acknowledged the right (to use marijuana
medically) but the law is so screwed up, it doesn't answer the second
question (of supply), which it ought to."