News
Feds Target Financial Institutions Associated with Medical Marijuana Clinics
Feds Target Financial Institutions Associated with Medical Marijuana Clinics
NYTimes.com
By SUSANNA KIM
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.”
Sexy Pot Ads Question Medical Marijuana Goals
Sexy pot ads provoke debate over medical marijuana goals
By Peter Hecht
phecht@sacbee.com
Published: Monday, Nov. 28, 2011 – 12:00 am
Last Modified: Monday, Nov. 28, 2011 – 6:58 am
In 2009, as Los Angeles’ booming medical marijuana economy inspired an emerald city of weed, Vanessa Sahagun found a business opportunity as “Chacha Vavoom,” maven of the 420 Nurses.
Chacha and her “nurses” became a pot culture phenomenon. They savored bong hits on YouTube, modeled skimpy outfits to promote marijuana dispensaries – and stirred young men at medical pot shows teeming with sexual imagery.
“I was proud I was opening up a market creating ‘green jobs’ for these ladies,” said Sahagun, 25.
But now, the sexual marketing of medical marijuana – with racy promotions that often trump the beer industry’s swimsuit models – is at the center of an uncomfortable debate in the medicinal cannabis community.
Fifteen years after California voters legalized use of medical marijuana amid images of ailing AIDS and cancer patients, pot dispensaries featuring “bikini budtenders” suggest a different message: pot as a recreational pleasure.
“I’ve often said how offensive it is that we have naked girls with cannabis leaves or mini-mini-mini-skirts,” said Lanette Davies, a Sacramento dispensary operator who condemns others in the industry for marketing sex. “That has nothing to do with medication.”
Davies, whose family runs the Canna Care dispensary, said some in the industry “believe there is more money” marketing to recreational marijuana users. “That’s not what people voted in. That’s not why we’re supposed to be here,” she said.
Ryan Landers, a Sacramento AIDS patient who leads a medical marijuana policy group called “the Compassionate Coalition,” said trade shows featuring “Hot Kush Girl” contests and spicy ads “make my job a hell of a lot harder to convince people what we’re doing is true and real.”
Most medical marijuana dispensaries refrain from suggestive advertising – and some even feature multiple sclerosis patients or car accident victims who use cannabis for chronic pain.
But the California Organic Collective dispensary in Los Angeles’ San Fernando Valley touts bikini-clad counter attendants in ads that depict a buxom nurse holding a red, nipple-shaped stethoscope to her breast.
The Reserve dispensary in Sacramento County employed a model in a metal-studded brassiere and Old West gun belt to promote a super-potent “Green Ribbon” strain packing 25 percent of marijuana’s psychoactive tetrahydrocannabinol, or THC.
“They claim to be offering medicine, yet they’re using marketing techniques reminiscent of some of the lowest standards of the beer industry,” said John Lovell, a lobbyist for the California Narcotics Officers Association.
At the “HempCon” medical marijuana trade show this month in San Jose, the event’s own marketing director took exception when she passed a booth for a magazine called Cali Chronic X. It featured seminude models posing suggestively with pot and exotic smoking accessories.
“I don’t know why we have to mix marijuana with porn,” protested Shawna Webb, a communications professional who uses medical cannabis for pain from a ruptured disk.
Webb said sex is the wrong image for the industry, particularly as California’s four U.S. attorneys are targeting pot dispensaries for prosecution and threatening their landlords with property seizures under federal drug laws.
But Jeffrey Peterson, publisher of Cali Chronic X and a performer known as “the 420 comic,” said he is making a stand against what he sees as prudish advocates who deny pot’s popularity as a recreational drug.
“How dare do these people, who think they represent the cannabis culture, single out the edge of this culture – because we are the cannabis culture,” he said.
Near Peterson at the San Jose trade show, Leslie Henck, a Bay Area go-go dancer, wore a bikini as the spokesmodel for a company selling joint-rolling machines. “You don’t have to look unhealthy to need medical marijuana,” said Henck, 19, who says her recommendation for pot helped her deal with anxiety.
“Sativa Grace,” a model for Cali Chronic X, came to the show dressed as a tawdry Alice in Wonderland. Sativa’s real name is Andrea Frye. The 21-year-old, who works in an adult novelties store, said she is empowering women.
“Hey, I may have sex appeal,” she said, “but I can smoke all day like a guy.”
Sahagun, a.k.a. Chacha Vavoom, started 420 Nurses as Los Angeles lit up with neon marijuana leaves from hundreds of new dispensaries. She sold outfits with hot pants sporting green medical marijuana crosses for women seeking pot modeling jobs.
“We went out with our cute uniforms, and I noticed a big response,” Sahagun said. “I knew there was a fire there.”
She said her “nurses” earn $10 to $25 an hour working in dispensaries or passing out business cards for doctors recommending marijuana – or $100 to $1,000 a day for promotional photos and videos.
At the “Kush Expo Medical Marijuana Show” in Anaheim this month, the 420 Nurses were joined by the Ganja Juice girls and a bikini troupe for an Orange County dispensary sponsoring the Expo’s “Hot Kush Girl” contest. A whooping, largely male throng cheered as 21 women competed for signature edition bongs and cash prizes.
“The marijuana industry is male-dominated, and dudes love to look at hot chicks,” said Ngaio Bealum, Sacramento publisher of a marijuana lifestyle magazine called West Coast Cannabis.
Bealum, who bills his publication as the “Sunset magazine of weed,” said he doesn’t run sexually suggestive ads.
And Bic Pho, marketing director for the Yerba Buena Medical Cannabis Club’s six San Jose dispensaries, junked ads with bikini models after deciding they projected a bad image for medical marijuana.
“I just didn’t feel it was appropriate. So we stopped,” he said. Now the dispensaries advertise a damsel, fully clothed, in pirate’s attire.
“We went with a pirate theme,” Pho said, “just something to remember us by.”
Read more: http://www.sacbee.com/2011/11/28/4083460/sexy-pot-ads-provoke-debate-over.html#ixzz1f1BeX4rN
California Pot Advocates Take Their Case to Courts
“Medical marijuana advocates take their battle to the courts”
By Peter Hecht
phecht@sacbee.com
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.
A Deportation Officer with U.S. Immigration and Customs Enforcement arrested for Pot Smuggling
APNewsBreak: ICE officer arrested in pot smuggling
By AMANDA LEE MYERS Associated Press
Posted: 10/19/2011 12:23:38 PM MDT
Updated: 10/19/2011 06:49:33 PM MDT
PHOENIX—A deportation officer with U.S. Immigration and Customs Enforcement led Arizona state police and federal agents on a high-speed desert chase in his government vehicle, throwing bundles of marijuana out of the window as he fled, the Department of Public Safety said Wednesday.
The deportation officer, identified as Jason Alistair Lowery, 34, had been under surveillance for more than month after a known smuggler who had been arrested gave authorities a tip about the officer in an effort to get lenient treatment, Department of Public Safety Officer Carrick Cook told The Associated Press.
In a criminal complaint filed late Wednesday against Lowery, who also used to be a Border Patrol agent, a Department of Homeland Security investigator wrote that he got further information about Lowery through a confidential informant on Oct. 4.
The informant, whose identity was protected, said that he or she was involved with Lowery and another man in a “rip” crew in which Lowery used his status in law enforcement to help steal marijuana from illegal immigrants, wrote Brian Gamberg-Bonilla, a special agent with the DPS’s Office of Investigations.
The informant agreed to call Lowery and arrange for him to pick up 500 pounds of pot in the desert on Tuesday, which is how authorities were able to follow him and begin to make their case, Gamberg-Bonilla wrote in the document.
DPS and federal agents tried to pull Lowery over after he picked up the marijuana with his unmarked ICE pickup truck, Cook said. Lowery then fled, leading agents on a 45-minute chase at speeds of up to 110 mph as he threw 10 of the 14 bundles of pot that he had in the truck out of the window, he said.
“He got pretty desperate,” Cook said.
The chase began in the Vekol Valley about 45 miles south of Phoenix and ended just south of Sacaton, about 20 miles as the crow flies northwest from where the chase began. It ended when Lowery’s truck rolled over and he gave himself up.
Lowery, who lives in the Phoenix suburb of Chandler, appeared in federal court in downtown Phoenix on Wednesday but did not address the court. He sat quietly awaiting the hearing and at one point looked up at the ceiling and repeatedly shook his head.
Prosecutor John Lopez argued that Lowery should be detained as his court case proceeds, saying that he poses a risk to the community and could flee the state. He also said that Lowery had a non-government-issued gun on him when he was arrested.
Federal Magistrate Michelle Burns set a hearing in the matter for Tuesday.
Lowery’s court-appointed attorney, Rebecca Felmly, declined to comment. Lowery’s wife, who identified herself as Trina Lowery, also declined to speak to The Associated Press.
Mexican drug cartels have infiltrated federal law enforcement agencies along the border for years, targeting hiring initiatives with their own people or recruiting officers.
Between 2003 and early 2010, 129 U.S. customs officers and Border Patrol agents were arrested on corruption charges, according to Tom Frost, the Department of Homeland Security’s assistant inspector general for investigations. The office was not immediately able to provide an updated figured to the AP.
“This is becoming all too common, in my opinion,” said Jim Dorcy, a retired Border Patrol agent who later investigated corruption among agents for the Justice Department. “Statistically it’s pretty rare, but you have to understand that as a law enforcement agency, it should be approaching zero.”
He said any amount of corruption in a police agency, let alone dozens of cases, destroys the public’s confidence and criminals’ respect. The heart of the problem lies in recent hiring booms in ICE and the Border Patrol in which the bar was lowered to meet hiring quotas, Dorcy said.
As for the corruption cases he investigated, Dorcy said it usually came down greed.
“They just want to make more money than the job offers, and they get offered a very tempting amount of money,” he said.
In one notable case, former Customs officer Margarita Crispin was arrested in El Paso, Texas, in 2007 and sentenced to 20 years in prison after pleading guilty to conspiracy to import more than 1,000 kilograms (2,204 pounds) of marijuana. Prosecutors alleged that she accepted more than $5 million in bribes over several years in exchange for letting smugglers’ vehicles pass through her checkpoint without inspection.
In a more recent case, former Border Patrol agent Michael Angelo Atondo was found guilty of trafficking marijuana in southwestern Arizona after fellow Border Patrol agents found him in a remote area along the border near San Luis—several miles outside of his patrol zone—with 745 pounds of marijuana in his vehicle.
Prosecutors say Atondo appeared to be a mole who infiltrated the agency to smuggle drugs. The 34-year-old will be sentenced Jan. 9.
In Lowery’s case, DPS believes that he was taking the 500 pounds of marijuana that he picked up in the desert to a man working for a drug cartel whose house served as the nexus of the drug distribution.
Lowery was booked into Pinal County jail on charges of smuggling and felony flight and was turned over to ICE custody Wednesday morning. The sheriff’s office also booked the man who was to receive the marijuana, identified as 33-year-old Joshua Duane Powell of Arizona City.
At Powell’s home, police found 14 rifles and guns in the trunk of his car, seven of which had been reported stolen, according to a DPS document.
The document also said that Powell had been out on a $25,000 bond stemming from a separate investigation last month in which multiple bulletproof vests, weapons, stolen night-vision equipment, hundreds of rounds of ammunition and various drugs were found in his home.
“Since his release only a few weeks ago, (Powell) has amassed a small arsenal of weapons and has proven to continue involvement in the illicit drug trade,” the document said.
Powell does not yet have an attorney and he has declined interview requests from the news media.
ICE spokesman Vinnie Picard said that Lowery worked as a deportation officer for the agency since August 2008 but declined to provide further information about Lowery.
“ICE is cooperating with federal and state authorities in this matter,” Picard said in a statement. “We hold our officers and agents to the highest levels of responsibility and are committed to supporting the agencies investigating this incident.”
Lowery worked as a deportation agent in ICE’s fugitive operations team, which goes after illegal immigrants who fail to leave the country after they’re ordered to be deported. Such officers carry weapons and have arrest powers.
Border Patrol spokesman Mario Escalante said Lowery also worked for that agency before going to ICE, but did not know for how long.
Five Arkansas Law Enforcement Officers Arrested along with 70 Others in Drug Bust
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Denver’s Platte River Valley a hub of medical-marijuana grow sites
Denver’s Platte River Valley a hub of medical-marijuana grow sites
By John Ingold
The Denver Post
Posted: 09/26/2011 01:00:00 AM MDT
Updated: 09/26/2011 08:10:43 AM MDT
About a year ago, Karen Cuthbertson, the head of the Athmar Park Neighborhood Association in Denver, began noticing discussions on the group’s Facebook page about skunks infiltrating the neighborhood.
What are we to do, the Athmar Park residents asked, about the influx of stinky beasts?
Cuthbertson, though, suspected blame for the new smells might best be placed not on skunks but on something thriving in the industrial areas on the neighborhood’s eastern boundary near the South Platte River: skunky marijuana.
“People think there is a skunk problem,” she said. “I’ve said, ‘Perhaps it’s not skunks.’ ”
Such is life in Colorado’s cannabis belt.
To the list of agricultural regions of Colorado that includes the San Luis Valley and the Grand Valley, add the South Platte Valley right through the heart of Denver.
Newly available data from the state show that a ribbon of land on either side of the river, starting just below West Evans Avenue and ending just above Interstate 70, is home to more than 250 large medical-marijuana cultivation sites, more than any other location in the state.
In a 1-mile radius around the intersection of Interstate 25 and West Sixth Avenue, there are about 120 “grows,” according to an analysis of the data by The Denver Post.
There are 462 growing facilities in the city and county of Denver that have applied for a state license, according to the state’s data. Statewide, there are 1,114 grows.
All the cultivation facilities must be linked to either a dispensary or a maker of marijuana-infused products, of which there are just more than 1,000 in the state, according to the latest numbers. Some businesses have multiple growing sites.
Addresses of the growing facilities were kept confidential until the legislature passed a law, which took effect this past summer, making them public. Still, the grows have largely remained incognito.
Most are tucked into nondescript warehouse spaces, surrounded by electrical-supply companies and businesses that sell countertop granite. None has a sign out front. And aside from the occasional skunklike scent of budding marijuana, it’s hard to know they’re there.
Cuthbertson said she hadn’t heard any specific complaints about grows in Athmar Park, noting that, because the city requires them to be in more industrial areas, they are largely separate from the neighborhood’s residential sections.
A Denver police spokesman declined to talk about whether the grows are trouble spots, worried in part that discussing their locations could make them targets for criminals.
“I have had no complaints in my district, and I have quite a few grow operations,” said Denver City Council President Chris Nevitt, who represents a swath of southeast and southwest Denver. “Frankly, they have been a godsend. They are filling a lot of empty commercial space and warehouse space.”
But not everybody is as thrilled with the grows.
Councilman Paul Lopez, who represents west Denver, said it is important to keep the grows contained to the industrial areas and not crowded in any one spot, so as not to prevent other development opportunities.
“We’re keeping an eye on it,” he said. “We’re keeping watch so that it doesn’t create an undue overproliferation in our neighborhood.”
Councilwoman Judy Montero, who represents north and central Denver, went a step further, suggesting that the presence of grows in some areas might need to be re-evaluated as those areas look to redevelop.
“I don’t see the uses of medical marijuana grow facilities being consistent with our land- use visions for the future of these communities,” she wrote in a prepared statement.
Such a clash has already occurred in Montero’s district, when developer Mickey Zeppelin complained about a large marijuana-growing warehouse off of Brighton Boulevard — across the river from one of his developments. The grow’s operators responded by threatening a lawsuit against Zeppelin for allegedly making it difficult to sublet space in the warehouse to other growers because of the publicity.
It is unclear whether a suit was ever filed, and Scott Turner, the general manager of Grass Roots Health and Wellness Center, said he couldn’t talk about the ongoing legal battle. But he said the grow hasn’t generated any complaints from other neighbors.
“We’re spending our money at the local businesses,” Turner said. “We’ve made a lot of good friends in the neighborhood.”
John Ingold: 303-954-1068 or jingold@denverpost.com