Federal Medical Marijuana Arrests Resume After Supreme Court Decision (Aug, 2005)

California has seen a resumption of federal medical cannabis arrests in the wake of the Supreme Court's Gonzalez v Raich decision, So far, federal authorities have acted in cooperation with local police to target larger operators deemed to be out of line with local policy.

Although the DEA insists that it isn't interested in pursuing medical marijuana patients, only organized criminal enterprises, local law enforcement officials have been making use of federal law to circumvent Prop. 215 in charging local providers.

Targets have included grower- activist Dustin "DC" Costa, founder of the Merced Patients' Group. DC was first arrested in February, 2004 for maintaining a patient greenhouse with some 900 plants. Costa had maintained a high political profile while awaiting trial on what he had expected would be state charges, but the Merced district attorney finally turned his case over to the feds on August 10th, depriving him of the opportunity for a Prop. 215 defense.

In Kern County, another vocal patient activist-provider, Joe Fortt, director of the American Kenpo Kungfu School of Public Health, was arrested on federal charges for cultivating over 2,000 plants at three different locations. Although Fortt claimed to be operating a legal medical marijuana co-op under Prop. 215, he faces a 10-year mandatory minimum under federal law, where medical marijuana is not a defense.

The DEA launched its own warning shot against medical marijuana operators immediately after the Raich decision. On June 22nd it raided three San Francisco dispensaries and arrested 19 defendants, most of them Asian-Americans, in what was described as an organized crime operation. Federal agents searched 24 homes and businesses, located 10 indoor grow sites, and seized over 9,000 plants. To date, 20 defendants have been indicted for conspiracy to cultivate and distribute over 1,000 marijuana plants. In addition, three were indicted for sales of ecstasy, and two others for money laundering. There were also allegations of international cash smuggling. The three closed dispensaries were Herbal Relief Center at 1545 Ocean Ave., Medicinal Herbal Remedy at 1939 Ocean Ave., and Sunset Medicinal Resource Center at 445 Judah St.

Federal spokesmen denied attacking medical marijuana per se. "It's not an attack on medical marijuana," one law enforcement official told the S.F. Chronicle, "This is an organized crime group that is using the whole pot club thing as a front."

Supporters say that the defendants were mostly involved in medical marijuana. One of them, Van Nguyen, was well known as the director of the first Asian- American dispensary, the Herbal Relief Center, which was known to give away cannabis to needy patients. "I am not a profiteer, I don't know what money laundering is," Nguyen told the SF Bay Guardian, "This is what I believe in, I'm not going away."

Defense attorneys argue that the involvement of minority Asian-Americans plus the charges of ecstasy sales, money laundering, and large-scale operations, made this an opportune target for federal officials.

Significantly, the defendants had also attracted the ire of the San Francisco police department, who were intimately involved in the investigation. Eleven of the defendants had been arrested by the SFPD in the course of six other raids for growing in San Francisco and Oakland over the past two years. They had avoided prosecution on grounds of Prop, 215.

The organization had also attracted neighborhood complaints by opening what was the third dispensary in the sleepy Ingleside district along Ocean Ave., where they operated another facility. Complaints about over-concentration of clubs were a major factor in San Francisco's recent decision to impose a moratorium on new facilities.

California NORML coordinator Dale Gieringer described the San Francisco raids as a "warning shot across the bow" and expressed hope that further raids could be avoided through better cooperation between police, dispensary owners, and public officials.

On the same day as the San Francisco raids, federal officials in Sacramento arrested medical marijuana physician Dr. Marion Fry and her husband, attorney Dale Schafer, on a sealed indictment. Fry and Schafer, who run a medical cannabis center in El Dorado County, had been under investigation since 2001, when DEA agents raided their office. Although Dr. Fry was protected from prosecution for recommending marijuana under the federal court Conant decision, a medical marijuana garden was discovered on the couple's property, rendering them liable to federal prosecution. Dr. Fry, who is also a cancer patient, contended the garden was legal under Prop. 215. However, the Supreme Court's Raich decision ruled out any defense based on personal medical use, clearing the path for the couple's recent indictment.

The DEA assisted the Sacramento County sheriff in closing another medical cannabis dispensary, Alternative Specialties, on Folsom Blvd. The dispensary's owner, Wayne Fowler, had a previous felony conviction for embezzling $5 million while a state employee, and was also charged with illegal possession of weapons. Sacramento County Sheriff's Sgt. R.L. Davis said Fowler was raided "because of who he is and because he was definitely operating without a business license." Other dispensaries are continuing to operate in Sacramento County, which has a moratorium on new facilities pending further regulations. Alternative Specialties had been the most conspicuous, as it had been located on a major highway with a big pot-leaf sign and live plants visible through the window.

In Modesto, the DEA arrested Thunder Rector, his wife, Rayleen, and a neighbor after Stanislaus County sheriffs discovered a substantial quantity of marijuana in a raid at his home. Rector, who is a patient, was associated with patients' groups in Modesto and San Francisco.

California NORML denounced the use of federal law to prosecute medical marijuana offenders. "Federal law deprives defendants of a just trial, since it forbids any mention of medical marijuana," said California NORML coordinator Dale Gieringer, "It also imposes draconian mandatory minimum sentences far in excess of what is allowed under California law even for non-medical offenders."

In San Bernardino County, the sheriff's department moved to shut down the county's only dispensary just two days after the Supreme Court decision without resorting to federal law. The dispensary, California Alternative Caregivers Christian Alliance in Big Bear Lake, was busted after selling eight ounces of medicine to an undercover sheriff's deputy with a physician's recommendation. San Bernardino District Attorney James Hosking has made it known that the country regards sales of medical marijuana to be illegal, although cooperative gardens are allowed under the law. No charges have been filed yet.

In San Diego, police arrested a medical cannabis dispensary owner, Jon Sullivan, at his home. Sullivan was arrested on account of a neighbor's complaint, not out of any investigation of his two dispensaries, which operate under the name "Triple Holistic Chronic." Police seized more that a pound of marijuana and patient records that were stored at his home. No federal charges have been sought.

Numerous other dispensaries remain in operation in San Diego, which so far has no ordinance regulating their presence. Three days after the Supreme Court decision, the San Diego grand jury rebuked the county for ignoring the needs of medical marijuana patients and urged it to take " all possible action" to promote access for the seriously ill.

Another major medical cannabis operation, Compassionate Caregivers, closed several of its outlets after becoming embroiled in a federal investigation. Their troubles began last May, when Los Angeles police raided their West Hollywood outlet, confiscating over $300,000 cash and a substantial quantity of products. IRS agents were involved in the raid. Following the Supreme Court decision, Compassionate Caregivers suspended its business, including seven outlets from Ukiah to San Diego. They have since re-opened two outlets in Oakland and San Francisco, but remain under federal investigation. Compassionate Caregivers insists that it has been operating legally and has vowed to fight to stay in business.

Another large medical cannabis operator, United Medical Caregivers Clinic of Ukiah and Los Angeles, voluntarily closed doors after the Raich decision. The move followed another LAPD raid last March, which resulted in seizure of $180,000 in cash and 200 pounds of product. No charges have been filed. UMCC has since re-opened under new management.

The IRS is said to be considering assessing operators for back taxes. Although medical cannabis businesses say they pay IRS taxes, the IRS is claiming that they cannot deduct the expenses of product purchased from growers unless they file 1099 forms for them. This presents an irresolvable dilemma to the dispensaries, since they need to assure anonymity to their growers in order to protect them from federal cultivation charges.

In other federal cases, US District Court Judge Charles Breyer sentenced Robert Schmidt to 41 months in prison for cultivation of marijuana. Schmidt, who operated the Genesis 1:29 cannabis center in Sonoma County, had been arrested in 2002 while growing over 3400 plants near Sebastopol. He had pled guilty in 2003, but his sentencing was put on hold pending the Supreme Court decision. Invoking the recent Booker ruling, which gives judges greater flexibility in sentencing, Breyer granted Schmidt a two-point downward departure, and dropped 10 months from his sentence because he was ineligible for a prison drug treatment program.

Numerous other federal defendants have outstanding cases, among them Bryan Epis, Keith Alden, Eddy Lepp, Judy Osburn, David Davidson and Cynthia Blake, and Anna and Gary Barrett.

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