Large-scale, commercial marijuana cultivation and sales were never allowed under state or federal law and will no longer be tolerated, California's top federal prosecutors said Friday in announcing a crackdown on medical marijuana dispensaries across the state.
The state's medical marijuana law has been "hijacked by people who are in this to get rich," U.S. Attorney Melinda Haag of San Francisco said at a news conference. California's Compassionate Use Act of 1996, she said, was intended "to allow marijuana to be supplied to seriously ill people on a nonprofit basis."
Haag and California's other three U.S. attorneys said they each have sent dozens of letters to dispensary owners, as well as residential, commercial and agricultural property owners involved in activity deemed to be drug trafficking, warning them to cease such operations within 45 days or face the consequences.
Those consequences include property and bank account seizures and civil forfeiture lawsuits as well as criminal prosecutions, all of which have been pursued in various cases filed across the state in recent weeks. So far, there's been no word of any East Bay or South Bay dispensaries receiving the letters.
"If (large-scale dispensaries) shut the operations down, there will be no forfeiture. If they continue, there will be forfeiture," Haag pledged, saying prosecutors in her Northern District -- which includes the Bay Area -- will focus on dispensaries near schools, parks and other places at which children gather.
"There's no ambiguity about this, there's no surprise about this -- the commercial sale of marijuana has been illegal for decades," said U.S. Attorney Benjamin Wagner, of Sacramento. "We're not after people who are sick, or their primary caregivers. ... Those people are not a focus of our operations."
Marijuana advocates reacted with angry dismay, given President Barack Obama's campaign pledge that he would not "be using Justice Department resources to try to circumvent state (medical marijuana) laws," a stance he has reiterated since taking office.
"Aggressive tactics like these are a completely inappropriate use of prosecutorial discretion by the Obama Administration," said Joe Elford, chief counsel with Oakland-based Americans for Safe Access. "President Obama must answer for his contradictory policy on medical marijuana."
Ethan Nadelmann, executive director of the Drug Policy Alliance, blasted the action as being "driven by overzealous prosecutors and the anti-marijuana ideologues who dominated policymaking in past administrations."
"Instead of encouraging state and local authorities to regulate medical marijuana distribution in the interests of public safety and health, his administration seems determined to re-criminalize as much as possible," he added.
However, the prosecutors insisted this isn't a reversal, noting that neither state nor federal law has ever allowed for-profit commercial marijuana sales, a stance underscored by Justice Department memos issued in October 2009 and in June.
"These actions should surprise no one. The Department of Justice is simply making good on threats they've been issuing for years," said Kevin Sabet, who from 2009 through last month was senior policy adviser to White House Office of National Drug Control Policy Director R. Gil Kerlikowske. "Given the flagrant violation of both federal and state laws these dispensaries were engaged in -- they certainly don't resemble what California voters intended in 1996 -- it makes sense that the Department of Justice is taking action now."
U.S. Attorney André Birotte Jr., of Los Angeles, said Friday that state law allows collective cultivation under limited circumstances by legitimate caregivers, not the "brick-and-mortar, Walmart-Costco type model," which has become a "new California gold rush."
"That is not what the California voters intended or authorized, and it is illegal," he said.
Wagner said California has become the nation's pre-eminent source of illegal marijuana. Birotte, who said his district has more "marijuana stores" than any other in the nation, said he hasn't found a single one of them that's able to prove it's a not-for-profit operation.
A state appeals court on Thursday struck down a Long Beach law regulating medical marijuana dispensaries, finding it conflicts with federal law's ban on the drug. Haag said Friday that many California cities and counties need to re-examine their own ordinances in light of this ruling.
San Jose City Attorney Rick Doyle said he's doing so, but thinks the city's law would satisfy the courts because it doesn't officially license any pot clubs, offering only an "affirmative defense" under California's medical marijuana law to prosecution. "We're not making this a permitted use, just allowing collectives to use it as an affirmative defense," he said. "It parallels state law."
San Jose Mayor Chuck Reed said the city is struggling to sort out conflicting federal and state laws on medical marijuana.
"The federal government has not been very clear about what they're intending to do," he said. "We're just trying to cope with California law that allows medical marijuana. We're trying to be reasonable."
Former state Sen. John Vasconcellos, a San Jose Democrat who co-authored a 2003 bill clarifying the state medical marijuana law's scope and application, called the crackdown "bad policy, bad politics and bad faith. It's just nonsense. I'm just so deeply offended and angered."
The federal crackdown will "drive patients over to the illegal side," predicted a man who spoke on condition of anonymity Friday outside Oakland's Harborside Health Center; he had a patient ID card and said he uses cannabis to treat pain in his legs and feet from arthritis and plantar fasciitis. "The war on drugs failed a long time ago. It's time for the country to wake up. This is a simple personal drug that doesn't affect society."
Harborside disclosed this week that the Internal Revenue Service is demanding it pay $2.4 million in back taxes after an audit determined dispensaries can't claim the same deductions as other businesses.
A customer at Oakland's Bulldog Coffee Shop, owned by Oaksterdam University founder and Proposition 19 bankroller Richard Lee, was defiant. "Just let them try," said the man, who identified himself only as "Herby G." He said the federal authorities are "bluffing."
"The Justice Department doesn't have a clue about what's going on," he said, adding that the marijuana industry -- unlike many Fortune 500 companies -- are willing to pay taxes and be good community citizens. "This is the biggest industry in the state."