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Feds Target Financial Institutions Associated with Medical Marijuana Clinics

Feds Target Financial Institutions Associated with Medical Marijuana Clinics
Oct. 26, 2011

In its effort to shut down California’s booming medical marijuana dispensaries, the Justice Department is seeking to seize the property where the clinics are based, even going after at least one bank that holds the mortgage on a clinic.

Chase bank received a letter to evict the Marin Alliance for Medical Marijuana, according to Greg Anton, attorney for the clinic. The bank owns the note on the building in Fairfax, Calif.

According to Anton, the bank received a similar letter from U.S. attorney Melinda Haag for the northern district of California that was sent to the Alliance’s landlord on Sept. 28 and other medical marijuana dispensaries. The letters threatened that unless the owners evicted the cannabis clinics within 45 days, they could face criminal action.

Anton said he obtained a copy of the letter to JPMorgan Chase through the clinic’s landlord, as reported by the Bay Citizen.

A spokesman for JP Morgan Chase said he had no comment and would not confirm whether the bank received a letter from the U.S. attorney.

The Justice Department announced on Oct. 7 it is cracking down on the illegal distribution of marijuana in four federal districts in California, which has had a growing cannabis industry since legalizing medicinal marijuana in 1996 through Proposition 215.

A spokesman for the U.S. attorney in the state’s Northern district said he could not comment on who received letters.

The U.S. attorneys for Sacramento, San Francisco, Los Angeles and San Diego revealed enforcement actions against at least 16 cannabis distributors in those federal districts. Deputy Attorney General James Cole said the department will not focus the investigation on individual patients with serious illnesses like cancer or their immediate caregivers.

Lynnette Shaw, owner of the Marian Alliance for Medical Marijuana, which calls itself the oldest medical marijuana dispensary in the state, said her landlord is planning to evict the business from the premises, though Shaw is hoping to obtain a court order or even an executive order that would bring a temporary stay on the U.S. Attorneys’ actions.

Shaw said she has obeyed all state laws for 15 years and never diverted medicine for non-medical purposes or sold out of state.

But she and her landlord, who she has been supportive since the time the clinic launched, are fearful of the Justice Department’s threats.

“My landlord is terrified, I would never do anything to endanger him,” Shaw said. “Now he’s asked us to remove marijuana from premises.”

On Tuesday, state and local legislators gathered with clinic owners in San Francisco prior to President Obama’s fundraiser event, calling on the president to intervene.

“This destructive attack on medical marijuana patients is a waste of limited law enforcement resources and will cost the state millions in tax revenue and harm countless lives,” California Assemblyman Tom Ammiano said. “President Obama needs to reverse this bad policy decision and respect California’s right to provide medicine to its residents.”

Aaron Smith, executive director for the National Cannabis Industry Association, said, “President Obama needs to immediately reign in the Justice Department for defying his administration’s stated policy to respect state medical marijuana laws.”

The Justice Department’s action places into question marijuana-related activities in 15 other states and the District of Columbia, which have legalized medicinal marijuana in some form.

Kevin Sabet, former Senior Policy Advisor to President Obama’s Drug Czar, Gil Kerlikowske, and currently a consultant to drug prevention and policy organizations, said financial institutions that deal with medical marijuana organizations should be on alert.

“Smoked marijuana remains illegal in all states, and federal law — while recognizing certain components of marijuana as having medicinal value — does not allow the whole marijuana plant to be smoked for any purpose, including purported medical purposes,” he said.

Sabet also warned that all states with legalized medical marijuana should pay attention to the enforcement actions in California.

“Remember, all actions have to be approved by Attorney General Holder, so it’s hard to imagine that California would be the only place the Department of Justice is focusing on,” Sabet said.

While dispensaries outside California have not received similar letters from the Justice Department, some have been audited by the IRS for taking business deductions that were related to “trafficking in controlled substances.” The IRS can penalize cannabis dispensaries based on section 280E of the tax code, passed during the Reagan administration in 1982, which prohibited drug dealers to take any deductions based on trafficking activities.

Jill Lamoureux, chairwoman of the National Cannabis Industry Association, said she knew of one audit in Colorado, the details of which are confidential. She said the deductions were accepted an no additional taxes or fines were assessed.

“If the IRS determines across the board that this industry cannot take standard business deductions it will severely limit the ability of these businesses to thrive serving patients and contributing to our state’s economies desperately in need of new growth industries,” Lamoureux wrote in an email to ABC News.

Sabet said the federal government is sending a message that the “rush” in the medical marijuana industry is “over.”

“People – including drug dealing organizations – flocked to the promise land of California thinking they could get rich off of this grey market, but the federal government is now reminding folks that there’s nothing grey about marijuana markets,” Sabet said. “‘Marijuana is an illegal drug and we take it seriously,’ is the message they seem to be sending.”

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California Pot Advocates Take Their Case to Courts

“Medical marijuana advocates take their battle to the courts”

By Peter Hecht
By Peter Hecht The Sacramento Bee
Published: Thursday, Nov. 10, 2011 – 12:00 am | Page 1A
Last Modified: Thursday, Nov. 10, 2011 – 12:10 am
Copyright 2011 The Sacramento Bee.

They are the public face of a litigious battle to redefine federal authority on medical marijuana.

With emotion and printed placards – “Marijuana is medicine, Let states regulate!” – about 200 people protested at the U.S. courthouse in Sacramento Wednesday against a federal crackdown on California dispensaries and property owners leasing to medical cannabis businesses.

But the real action may result from five lawsuits filed in recent days against U.S. government officials, including Attorney General Eric Holder, California’s four U.S. attorneys and President Barack Obama’s director of national drug control policy.

The suits assert that federal prosecutors are violating equal protection laws and states’ rights, and constitutional protections for in-state commerce. The ultimate goal may be to force the government to negotiate a settlement that spells out what it will tolerate in California and other states permitting medical marijuana use.

“We would like to get a rational dialogue going with the federal government about how to handle medical cannabis in California,” said Matt Kumin, a lead attorney in lawsuits filed in each of the state’s federal judicial districts. The suits seek injunctions to stop the seizure of properties of landlords leasing to medical marijuana operations.

A fifth suit, by the advocacy group Americans for Safe Access, seeks to bar federal actions “to dismantle the laws of the state of California.”

Don Heller, a former Sacramento federal prosecutor, said the suits could force a definitive answer by the U.S. Supreme Court on the issue of federal “supremacy and states rights and who shall prevail with respect to marijuana.”

“It has been nibbled at and now it really should be decided,” he said.

In an announcement last month, U.S. prosecutors broadly asserted that dispensaries in California are profiteering in violation of both federal and state law. They’ve brought charges that some bad actors have trafficked medical marijuana out of state or pocketed millions of dollars from cultivation operations for marijuana stores.

U.S. Attorney Benjamin Wagner in Sacramento said in a statement Wednesday that California prosecutors “will continue to enforce federal narcotics laws, unless and until ordered to do otherwise.”

In contrast, marijuana advocates are suing on behalf of people such as Ryan Landers of Sacramento, who uses medical marijuana for symptoms of AIDS, or Briana Bilbray, a cancer patient who uses cannabis and the daughter of San Diego Republican Rep. Brian Bilbray.

The suits also challenge threats to seize properties of landlords who rent to dispensaries, including the El Camino Wellness Center, one of Sacramento’s leading medical marijuana outlets, or the Marin Alliance for Medical Marijuana, California’s longest operating medicinal cannabis provider.

Kumin said plaintiffs want to know why the federal government has taken little action in Colorado, which permits a heavily regulated, for-profit medical marijuana industry, while launching aggressive actions in California.

The government’s stance is that all marijuana – medical or otherwise – is illegal under federal law. But Kumin said the Colorado model suggests California may be able to negotiate standards for medical marijuana distribution that would ward off federal intervention.

Santa Clara Clara University law professor Gerald Uelmen said a U.S. Supreme Court battle is unlikely to produce positive results for the medical marijuana movement.

Uelmen unsuccessfully argued a 2001 case for the Oakland Cannabis Buyers Club, in which the Supreme Court ruled no “medical necessity” exempts marijuana from federal law. In 2004, the court rejected California medical user Angel Raich’s claim that federal marijuana laws intruded on constitutionally protected state commerce.

But Uelman said legal actions may force the government to negotiate with the advocates.

Uelmen represented the Santa Cruz Wo/Men’s Alliance for Medical Marijuana (WAMM) in an eight-year battle against federal authorities after a 2002 raid on the pot garden of a colony of severely or terminally ill patients. It resulted in a 2004 ruling permitting the group to grow marijuana and a 2010 agreement to drop the suit on the condition the government would no longer raid the garden.

Uelmen said authorities may be less accommodating for dispensaries the government views “as a ploy to run commercial operations to sell marijuana.”

In a parallel effort to the lawsuits, advocates are drafting a ballot initiative for statewide regulation of California’s medical marijuana industry, hoping it may diminish incentives for federal intervention.

California Board of Equalization member Betty Yee joined courthouse protesters Wednesday, decrying federal actions against dispensaries that she described as “responsible corporate citizens who pay state sales taxes.”

Kumin said he hopes the lawsuits can “enshrine” support for medical marijuana in California into federal law or policy. “We believe there are judges out there who are brave and ready to look at the utter contradictions,” he said.

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Tod H. Mikuriya, Grandfather of Medical Marijuana Movement, Dies May 29, 2007

Tod H. Mikuriya, 73, Dies; Backed Medical Marijuana

Published: May 29, 2007
Dr. Tod H. Mikuriya, a California psychiatrist who was widely regarded as the grandfather of the medical marijuana movement in the United States, died on May 20 at his home in Berkeley. He was 73.

Marcio Jose Sanchez/Associated Press
Dr. Tod H. Mikuriya
The cause was complications of cancer, his family told California news organizations.

Dr. Mikuriya, who helped make the use of marijuana for medicinal purposes legal in California, spent the last four decades publicly advocating its use, researching its effects and publishing articles on the subject.

He was an architect of Proposition 215, the state ballot measure that in 1996 made it legal for California doctors to recommend marijuana for seriously ill patients. He was also a founder of the California Cannabis Research Medical Group and its offshoot, the Society of Cannabis Clinicians.

As a result of his work, Dr. Mikuriya was considered a savior by some, a public menace by others. To his supporters, he was a physician of last resort: for years, a stream of patients with illnesses like cancer and AIDS made their way to his private practice in Berkeley. Dr. Mikuriya sometimes wrote a dozen or more recommendations for marijuana each day; at his death, he was reported to have approved the drug for nearly 9,000 patients.

Elsewhere, however, Dr. Mikuriya’s work found little favor. In 1996, for instance, Gen. Barry R. McCaffrey, director of the Office of National Drug Control Policy under President Bill Clinton, publicly derided the doctor’s medical philosophy as “the Cheech and Chong show.”

In 2000, the Medical Board of California accused Dr. Mikuriya of gross negligence, unprofessional conduct and incompetence for failing to conduct proper physical examinations on 16 patients for whom he had recommended marijuana. In 2004, the board gave him five years’ probation and a $75,000 fine. Dr. Mikuriya, who appealed the ruling, was allowed to continue practicing under the supervision of the state-appointed monitor.

A longtime registered Republican (he became a Libertarian in later years), Dr. Mikuriya began researching marijuana’s therapeutic possibilities in the 1960s. He maintained a list of more than 200 ailments whose symptoms it was said to relieve, including stuttering, insomnia, premenstrual syndrome, writer’s cramp, poor appetite and some side effects of cancer treatment, among them nausea and vomiting.

Dr. Mikuriya saw his work, he often said, as a means of righting a historical wrong, namely the backlash against medical marijuana that began in the “Reefer Madness” era of the late 1930s.

“It had been available to clinicians for one hundred years until it was taken off the market in 1938,” he told The East Bay Express, a Northern California newspaper, in 2004. “I’m fighting to restore cannabis.”

Tod Hiro Mikuriya was born in Bucks County, Pa., on Sept. 20, 1933. His mother, the former Anna Schwenk, an immigrant from Germany, was a special-education teacher. His father, Tadafumi Mikuriya, the descendant of a Japanese samurai family, was a civil engineer. Tod Mikuriya received a bachelor’s degree in psychology from Reed College in Oregon in 1956. From 1956 to 1958, he was a medic in the United States Army.

Dr. Mikuriya earned his M.D. from Temple University in 1962. While studying there, he became intrigued by a reference in a pharmacology textbook to the medical use of marijuana, the first stirrings of his future career.

From 1966 to 1967, Dr. Mikuriya directed the drug addiction treatment center of the New Jersey Neuropsychiatric Institute, in Princeton. In 1967, he became a consulting research psychiatrist at the Center for Narcotics and Drug Abuse Studies of the National Institute of Mental Health, where he was in charge of marijuana research. He left the post after several months, he later said in interviews, because he felt that the agency was interested primarily in research that highlighted the negative effects of the drug.

Dr. Mikuriya is survived by two sisters, Mary Jane Mikuriya and Beverly Mikuriya; a son, Tadafumi, known as Sean; and a daughter, Hero. Information on other survivors could not immediately be confirmed.

Among doctors who support the therapeutic use of marijuana, many are publicly circumspect when asked if they ever take a taste of their own medicine. Not so Dr. Mikuriya. As The Los Angeles Times reported in 2004, “He willingly acknowledges, unlike most of his peers in cannabis consulting, that he does indeed smoke pot, mostly in the morning with his coffee.”