Feds Target Calif Pot Dispensaries

[Roddy]

SAN FRANCISCO — Federal prosecutors have launched a crackdown on pot dispensaries in California, warning the stores that they must shut down in 45 days or face criminal charges and confiscation of their property even if they are operating legally under the state's 15-year-old medical marijuana law.

In an escalation of the ongoing conflict between the U.S. government and the nation's burgeoning medical marijuana industry, at least 16 pot shops or their landlords received letters this week stating they are violating federal drug laws, even though medical marijuana is legal in California. The state's four U.S. attorneys are scheduled to announce a broader coordinated crackdown at a Friday news conference.

Their offices refused to confirm the closure orders. The Associated Press obtained copies of the letters that a prosecutor sent to at least 12 San Diego dispensaries. They state that federal law "takes precedence over state law and applies regardless of the particular uses for which a dispensary is selling and distributing marijuana."

"Under United States law, a dispensary's operations involving sales and distribution of marijuana are illegal and subject to criminal prosecution and civil enforcement actions," letters signed by U.S. Attorney Laura Duffy in San Diego read. "Real and personal property involved in such operations are subject to seizure by and forfeiture to the United States ... regardless of the purported purpose of the dispensary."

The move comes a little more than two months after the Obama administration toughened its stand on medical marijuana following a two-year period during which federal officials had indicated they would not move aggressively against dispensaries in compliance with laws in the 16 states where pot is legal for people with doctors' recommendations.

The Department of Justice issued a policy memo to federal prosecutors in late June stating that marijuana dispensaries and licensed growers in states with medical marijuana laws could face prosecution for violating federal drug and money-laundering laws. The effort to shutter California dispensaries appears to be the most far-reaching effort so far to put that guidance into action.

"This really shouldn't come as a surprise to anyone. The administration is simply making good on multiple threats issued since President Obama took office," Kevin Sabet, a former adviser to the president's drug czar who is a fellow at the University of Pennsylvania's Center for Substance Abuse Solutions. "The challenge is to balance the scarcity of law enforcement resources and the sanctity of this country's medication approval process. It seems like the administration is simply making good on multiple statements made previously to appropriately strike that balance."

Greg Anton, a lawyer who represents a Marin Alliance for Medical Marijuana, said the 14-year-old dispensary's landlord received an "extremely threatening" letter Wednesday invoking a federal law that imposes additional penalties for selling drugs within 1,000 feet of schools, parks and playgrounds.

The landlord was ordered to evict the pot club or risk imprisonment, plus forfeiture of the property and all the rent he has collected while the dispensary has been in business, Anton said.

The Marin Alliance's founder "has been paying state and federal taxes for 14 years, and they have cashed all the checks," he said. "All I hear from Obama is whining about his budget, but he has money to do this which will actually reduce revenues."

Kris Hermes, a spokesman for the medical marijuana advocacy group Americans for Safe Access, said the warnings are part of what appears to be an attempt by the Obama administration to curb medical marijuana on multiple fronts and through multiple agencies. A series of dispensary raids in Montana, for example, involved agents from not only the FBI and U.S. Drug Enforcement Agency, but the Internal Revenue Service and Environmental Protection Agency.

Going after property owners is not a new tactic, though, Hermes said. Five years ago, the Department of Justice under President George Bush made similar threats to about 300 Los Angeles-area landlords who were renting space to medical marijuana outlets, some of whom were eventually evicted or closed their doors voluntarily, he said.

"It did have an impact. However, the federal government never acted on its threats, never prosecuted anybody, never even went to court to begin prosecutions," Hermes said. "By and large they were empty threats, but they relied on them and the cost of postage to shut down as many facilities as they could without having to engage in criminal enforcement activity."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

[Roddy]

ooops on the trademark thingy lol

 

[Killertea08]

Yup Roddy just read that on msnbc

hXXp://www.msnbc.msn.com/id/44806723/ns/us_news-crime_and_courts/#.To6A2XKjSuI

I think this is the most stupid thing are government can do! Lets just lower are overall revenue which marijuana is a big chunk, and waste more money on police enforcement as always. I think its big pharma that is funding something here, because after all, we smoke more and buy less Rx from them which they know and they can't stand it. I recommend this book for anyone that wants to look at a different side of the coin when it comes to prescription medications. The title is "OVER-THE-COUNTER" Natural Cures by and Mr Shane Ellison M.S. He was a chemist for a big pharmaceutical company and states the side effects from many meds later on down the road will lead us to the hospital such as "Statins" He is also on you tube called the "people's chemist".

 

[NorCalHal]

We are ready, ready to flood the Federal court system with case after case.

No one is scared, believe me. We have faced this time and again.

What has taken place the last 2 years will NEVER go away or even get slowed down, it's fargin' incredible. They are too late, at least in this state.

Darn straight it's Big Pharma pushing this.

 

[Roddy]

SAN FRANCISCO — Federal prosecutors in California are cracking down on some of the state's medical marijuana dispensaries, signaling an escalation of the ongoing conflict between the U.S. government and the nation's burgeoning medical marijuana industry.

The four U.S. attorneys in California, the first state to pass a law legalizing marijuana use for patients with doctors' recommendations, have scheduled a joint news conference Friday where they plan to "outline actions targeting the sale, distribution and cultivation of marijuana."

Their offices refused to provide details in advance what moves the officials are taking or how many of the state's hundreds of storefront pot shops would be affected. But at least 16 pot shops or their landlords received letters this week warning face they would face criminal charges and confiscation of their property if the dispensaries do not shut down in 45 days.

The Associated Press obtained copies of the letters that a prosecutor sent to at least 12 San Diego dispensaries. They state that federal law "takes precedence over state law and applies regardless of the particular uses for which a dispensary is selling and distributing marijuana."

"Under United States law, a dispensary's operations involving sales and distribution of marijuana are illegal and subject to criminal prosecution and civil enforcement actions," according to the letters signed by U.S. Attorney Laura Duffy in San Diego. "Real and personal property involved in such operations are subject to seizure by and forfeiture to the United States ... regardless of the purported purpose of the dispensary."

The move comes a little more than two months after the Obama administration toughened its stand on medical marijuana. For two years before that, federal officials had indicated they would not move aggressively against dispensaries in compliance with laws in the 16 states where pot is legal for people with doctors' recommendations.

The Department of Justice issued a policy memo to federal prosecutors in late June stating that marijuana dispensaries and licensed growers in states with medical marijuana laws could face prosecution for violating federal drug and money-laundering laws. The effort to shutter California dispensaries appeared to be the most far-reaching effort so far to put that guidance into action.

Greg Anton, a lawyer who represents dispensary Marin Alliance for Medical Marijuana, said its landlord received an "extremely threatening" letter Wednesday invoking a federal law that imposes additional penalties for selling drugs within 1,000 feet of schools, parks and playgrounds.

The landlord was ordered to evict the 14-year-old pot club or risk imprisonment, plus forfeiture of the property and all the rent he has collected while the dispensary has been in business, Anton said.

Kris Hermes, a spokesman for the medical marijuana advocacy group Americans for Safe Access, said the warnings are part of what appears to be an attempt by the Obama administration to curb medical marijuana on multiple fronts and through multiple agencies. A series of dispensary raids in Montana, for example, involved agents from not only the FBI and U.S. Drug Enforcement Agency, but the Internal Revenue Service and Environmental Protection Agency.

Going after property owners is not a new tactic though, Hermes said. Five years ago, the Department of Justice under President George W. Bush made similar threats to about 300 Los Angeles-area landlords who were renting space to medical marijuana outlets, some of whom were eventually evicted or closed their doors voluntarily, he said.

"It did have an impact. However, the federal government never acted on its threats, never prosecuted anybody, never even went to court to begin prosecutions," Hermes said. "By and large, they were empty threats, but they relied on them and the cost of postage to shut down as many facilities as they could without having to engage in criminal enforcement activity."

The San Diego medical marijuana outlets put on notice were the same dozen that city officials sued last month for operating illegally, after activists there threatened to force an election on a zoning plan adopted to regulate the city's fast-growing medical marijuana industry, City Attorney Jan Goldsmith said. A judge on Wednesday ordered nine of the targeted shops to close, while the other three shut down voluntarily, Goldsmith said.

Duffy, the U.S. attorney for far Southern California, planned to issue warning letters to property owners and all of the 180 or so dispensaries that have proliferated in San Diego in the absence of compromise regulations, according to Goldsmith.

"The real power is with the federal government," he said. "They have the asset forfeiture, and that means either the federal government will own a lot of property or these landlords will evict a lot of dispensaries."

 

[Hick]

Published: March 18, 2009

WASHINGTON — Attorney General Eric H. Holder Jr. on Wednesday outlined a shift in the enforcement of federal drug laws, saying the administration would effectively end the Bush administration’s frequent raids on distributors of medical marijuana....Mr. Holder said the new approach was consistent with statements made by President Obama in the campaign and was based on an assessment of how to allocate scarce enforcement resources. He said dispensaries operating in accord with California law would not be a priority for the administration.

During a town hall meeting in Laconia, New Hampshire, on June 2, 2007, Sen. Obama was asked if he would continue the federal raids on medical marijuana patients and their caregivers. Sen. Obama responded: "I don't think that should be a top priority of us, raiding people who are using ... medical marijuana. With all the things we've got to worry about, and our Justice Department should be doing, that probably shouldn't be a high priority."

On July 21, 2007 at a town hall meeting in Manchester, New Hampshire, a GSMM staffer asked Sen. Obama if he would end the raids. Sen. Obama replied: "The Justice Department going after sick individuals using this as a palliative instead of going after serious criminals makes no sense."

Less then a month later, on August 13, while at a town hall meeting in Nashua, New Hampshire, he was asked by GSMM staffers if he agreed with the 81% of New Hampshire Democrats who believe that the federal government should end the raids on medical marijuana patients and caregivers. Sen. Obama responded: "You know, it's really not a good use of Justice Department resources."

On August 21, during a campaign event in Nashua, New Hampshire, Sen. Obama was asked by GSMM volunteer and seriously ill Nashua resident Scott Turner if he would end the federal raids on medical marijuana patients like him. Sen. Obama replied: "I would not have the Justice Department prosecuting and raiding medical marijuana users. It's not a good use of our resources."

October 19,2009

MEMORANDUM FOR SELECTED UNITED STATES ATTORNEYS

FROM: David W. Ogden, Deputy Attorney General

SUBJECT: Investigations and Prosecutions in States Authorizing the Medical Use of Marijuana

This memorandum provides clarification and guidance to federal prosecutors in States that have enacted laws authorizing the medical use of marijuana. These laws vary in their substantive provisions and in the extent of state regulatory oversight, both among the enacting States and among local jurisdictions within those States. Rather than developing different guidelines for every possible variant of state and local law, this memorandum provides uniform guidance to focus federal investigations and prosecutions in these States on core federal enforcement priorities.

The Department of Justice is committed to the enforcement of the Controlled Substances Act in all States. Congress has determined that marijuana is a dangerous drug, and the illegal distribution and sale of marijuana is a serious crime and provides a significant source of revenue to large-scale criminal enterprises, gangs, and cartels. One timely example underscores the importance of our efforts to prosecute significant marijuana traffickers: marijuana distribution in the United States remains the single largest source of revenue for the Mexican cartels.

The Department is also committed to making efficient and rational use of its limited investigative and prosecutorial resources. In general, United States Attorneys are vested with “plenary authority with regard to federal criminal matters” within their districts. USAM 9-2.001. In exercising this authority, United States Attorneys are “invested by statute and delegation from the Attorney General with the broadest discretion in the exercise of such authority.” Id. This authority should, of course, be exercised consistent with Department priorities and guidance.

The prosecution of significant traffickers of illegal drugs, including marijuana, and the disruption of illegal drug manufacturing and trafficking networks continues to be a core priority in the Department’s efforts against narcotics and dangerous drugs, and the Department’s investigative and prosecutorial resources should be directed towards these objectives. As a general matter, pursuit of these priorities should not focus federal resources in your States on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana. For example, prosecution of individuals with cancer or other serious illnesses who use marijuana as part of a recommended treatment regimen consistent with applicable state law, or those caregivers in clear and unambiguous compliance with existing state law who provide such individuals with marijuana, is unlikely to be an efficient use of limited federal resources. On the other hand, prosecution of commercial enterprises that unlawfully market and sell marijuana for profit continues to be an enforcement priority of the Department. To be sure, claims of compliance with state or local law may mask operations inconsistent with the terms, conditions, or purposes of those laws, and federal law enforcement should not be deterred by such assertions when otherwise pursuing the Department’s core enforcement priorities.

Typically, when any of the following characteristics is present, the conduct will not be in clear and unambiguous compliance with applicable state law and may indicate illegal drug trafficking activity of potential federal interest:

*
unlawful possession or unlawful use of firearms;
*
violence;
*
sales to minors;
*
financial and marketing activities inconsistent with the terms, conditions, or purposes of state law, including evidence of money laundering activity and/or financial gains or excessive amounts of cash inconsistent with purported compliance with state or local law;
*
amounts of marijuana inconsistent with purported compliance with state or local law;
*
illegal possession or sale of other controlled substances; or
*
ties to other criminal enterprises.

Of course, no State can authorize violations of federal law, and the list of factors above is not intended to describe exhaustively when a federal prosecution may be warranted. Accordingly, in prosecutions under the Controlled Substances Act, federal prosecutors are not expected to charge, prove, or otherwise establish any state law violations. Indeed, this memorandum does not alter in any way the Department’s authority to enforce federal law, including laws prohibiting the manufacture, production, distribution, possession, or use of marijuana on federal property. This guidance regarding resource allocation does not “legalize” marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil, or criminal matter. Nor does clear and unambiguous compliance with state law or the absence of one or all of the above factors create a legal defense to a violation of the Controlled Substances Act. Rather, this memorandum is intended solely as a guide to the exercise of investigative and prosecutorial discretion.

Finally, nothing herein precludes investigation or prosecution where there is a reasonable basis to believe that compliance with state law is being invoked as a pretext for the production or distribution of marijuana for purposes not authorized by state law. Nor does this guidance preclude investigation or prosecution, even when there is clear and unambiguous compliance with existing state law, in particular circumstances where investigation or prosecution otherwise serves important federal interests.

Your offices should continue to review marijuana cases for prosecution on a case-by-case basis, consistent with the guidance on resource allocation and federal priorities set forth herein, the consideration of requests for federal assistance from state and local law enforcement authorities, and the Principles of Federal Prosecution.

cc: All United States Attorneys

Lanny A. Breuer
Assistant Attorney General Criminal Division

B. Todd Jones
United States Attorney
District of Minnesota
Chair, Attorney General’s Advisory Committee

Michele M. Leonhart
Acting Administrator
Drug Enforcement Administration

H. Marshall Jarrett
Director
Executive Office for United States Attorneys

Kevin L. Perkins
Assistant Director
Criminal Investigative Division
Federal Bureau of Investigation

 

[Reverend Raymondc]

Screw them all! born outlaw die outlaw..Grow it! roll it..and toke em up Don
t need no Government to tell me what I can and can not smoke.Where I can buy smoke or or how to grow my smoke...Sorry to all the Dispensary that are shutting down....OutLAW Growing for life!

 

[The New Girl]

Screw them all! born outlaw die outlaw..Grow it! roll it..and toke em up Don
t need no Government to tell me what I can and can not smoke.Where I can buy smoke or or how to grow my smoke...Sorry to all the Dispensary that are shutting down....OutLAW Growing for life!

For your first post I give you an A
PS You would have got an A+ if you hadn't used the double negative!!!

 

[Roddy]

Now if you'd have added STINKING to that, all would be good, Rev!

 

[NorCalHal]

Y'all got to see this as what it really is. This is the start of Pharma's "Big Takeover". I am actually suprised at how fast they are going.
I know some of you don't think so, but it's the truth.

Who is in charge of Law Enforcement in the USA right now? Eric Holder.
Sure is funny when he was a Lawyer, he represented Merck.
Look it up.

 

[NorCalHal]

Man, it's going to get worse before it gets better.

They are comin' after us big time. Do you guys see what they are doing?

This all has happened over the last 2 weeks. These bastids are comin' and comin' hard.


SAN FRANCISCO -- The federal government has found a new weapon in its war on marijuana – the tax man.

A San Francisco Bay area medical marijuana dispensary that promotes itself as the world's largest has been hit with a $2.4 million tax bill following an audit by the Internal Revenue Service, the dispensary founder said Tuesday.

The back taxes, penalties and interest levied against Harborside Health Center came after the IRS examined its returns for 2007 and 2008 and determined a 1982 tax code prohibiting cost deductions for businesses that traffic in illegal drugs applies to the dispensary.

Harborside is a spa-like fixture on Oakland's waterfront with 94,114 registered customers and 84 full-time employees that offers an average of 30 varieties of medical marijuana every day and has $22 million in annual sales.

"What kind of drug trafficking organization actually files a tax return? None of them do," said Harborside CEO Steve DeAngelo, who gave his auditor a personal tour of his posh apothecary. "The very fact that we filed a tax return and told the IRS all the details of what we are doing proves we are not a drug trafficking organization."

The IRS said the agency does not comment on individual audits.

DeAngelo, the subject of an upcoming Discovery Channel reality show, said the write-offs disallowed by the IRS included standard operating costs such as rent, payroll, employee health insurance and licensing fees.

Government auditors did not dispute, however, that Harborside had properly deducted its biggest expense – the millions of dollars it spent buying pot to sell to people who use it under California's medical marijuana law.

San Francisco tax attorney Henry Wykowski, who represents DeAngelo, said a 2007 case involving another California dispensary established that the cost of goods sold was a legitimate expense for businesses the IRS otherwise considers illegitimate.




"It goes all the way back to Prohibition," Wykowski explained. "They expect even businesses operating illegally to file tax returns, so they still have to give them their business deductions, and a cost of goods sold is the primary deduction that any business would have."

DeAngelo has until Dec. 22 to contest the audit in tax court. The IRS has told him it is now reviewing Harborside's returns for 2009 and 2010.

Meanwhile, a handful of state officials have written House Speaker John Boehner, a Republican, and Senate Majority Leader Harry Reid, a Democrat, on behalf of DeAngelo, asking the two lawmakers to exempt "legally operating cannabis businesses" from the tax code section for drug traffickers.

DeAngelo said he does not have the $2.4 million the IRS wants. Like all legal medical marijuana dispensaries in California, Harborside operates as a nonprofit corporation while paying state sales taxes and a 5 percent local tax to Oakland – for a total of $3.1 million this year, he said.

"We would be happy to pay taxes like every other business does," he said. "No business, including Harborside, could survive if it's taxed on its gross revenue. All we want is to be treated like every other business in America."

Wykowski said he represents at least two dozen other California and Colorado pot dispensaries dealing with IRS audits. Some have persuaded auditors to accept deductions for auxiliary services such as on-site yoga classes, the time employees spend counseling customers as opposed to preparing marijuana, and quality testing. Others such as Harborside have been less successful.

"What the taxing authorities are losing sight of is if you tax these places out of business and make it so they can't compete, all it is going to do is boost underground sales," he said. "The guys on the street aren't paying their employees and if they are, they certainly aren't withholding taxes."

 

[NorCalHal]

Another Fun fact is how the Treasury dept is harrasing banking institutions into NOT dealing with the MMJ industry at all. If you operate a MMJ business INCLUDING a hydro store, banks are turning you away. All bad.

 

[Roddy]

Sorry Hal, seem s Unc Sam is wanting it both ways....ouch!

 

[tcbud]

Seems like the price of pot may go up again in California. Also seems like there will be more grown outside the guidelines of the Medical Marijuana Industry in California.

 

[Killertea08]

I'm with ya Hal! Big Pharma all the way, I'm a licensed medical professional and can tell you that all prescription drugs with there long list of side effects will later on down the road become a big problem. I see it time and time again in the hospital, how high cholesterol meds aka "Statins" really mess you up big time. Side effects of "Statins" drug induced erectile dysfunction aka ED. Heart failure due to - the side effect decreases CoQ10 levels within the heart. This essential nutrient serves as an energy producing molecule and is crucial to proper cardiovascular function. Basically without it your heart fails. Congestive heart Failure is to outcome. Mental effects because statins dumb you down, by effecting the myelin sheath in the brain that causes forgetfulness. Cancer because statins mimic a growth factor responsible for cancer proliferation, the growth factor is called VEGF (Vascular endothelial growth factor). Basically its a Cancer fertilizer. Get off statins ASAP. I recommend the book I stated above in my previous post.

 

[TerrorAP2]

Here's the latest statement from the Sacramento Bee: "U.S. attorneys will be targeting major commercial operations in California - but said not every dispensary should expect a letter from the federal government. "Our intention is not to prosecute everybody in the state," he said. "Our intention is to get people's attention in order to deter this activity."

Read more: hxxp://blogs.sacbee.com/crime/archiv...#ixzz1a8FBsZNn

 

[orangesunshine]

once again the fed drives what is legal under state law into the black market---all those dispensaries are not growing their own---if i were on the books as a vendor to any dispensary---i would be sweating bullets right now---a federal review of their books becomes an open invitation for the fed to come a knockin' at growers' doors---be safe everyone---hope you all covered yo azz

 

[Roddy]

SACRAMENTO, Calif. — Federal prosecutors announced an aggressive crackdown on California pot dispensaries Friday, vowing to shut down dozens of growing and sales operations and saying that the worst offenders are using the cover of medical marijuana to act as storefront drug dealers.

Officials described it as the first coordinated statewide offensive against marijuana dealers and suppliers who use California's 15-year-old medical marijuana law as legal cover for running sophisticated drug trafficking ventures in plain sight.

"California's marijuana industry supplies the nation," said U.S. Attorney Benjamin Wagner, citing a 2009 federal study that 72 percent of marijuana plants eradicated nationwide were grown in California. "Huge amounts of marijuana grown here in this state is flowing east to other states, and huge amounts of money are flowing back in the opposite direction."

The actions were geared toward stopping a proliferation that has led to thousands of pot shops opening their doors across the state. The spread was fueled partly by the Obama administration's assurance two years ago that it did not plan to devote federal resources to countering marijuana outlets operating in compliance with state laws.

One example cited by the prosecutors Friday: In one Orange County strip mall, eight of the 11 second-floor suites are occupied by dispensaries and doctors' offices for doctors where healthy individuals obtain "sham" recommendations to use medical marijuana.

It is "a Costco, Walmart-type model that we see across California," said Andre Birotte Jr., U.S. attorney in the Los Angeles-area. Some people making money from medical marijuana openly revel in what some have called "the new California gold rush," he said.

Landlords leasing property to dozens of warehouses and agricultural parcels where marijuana is being grown and retail spaces where pot is sold over the counter are receiving written warnings to evict their tenants or face criminal charges or seizure of their assets, the state's four U.S. attorneys said.

"The intention regarding medical marijuana under California state law was to allow marijuana to be supplied to seriously ill people on a nonprofit basis," said U.S. Attorney Melinda Haag, the top federal law enforcement officer for the San Francisco Bay area. "What we are finding, however, is that California's laws have been hijacked by people who are in this to get rich and don't care at all about sick people."

The crackdown comes a little more than two months after the Obama administration toughened its stand on medical marijuana. For two years before that, federal officials had indicated they would not move aggressively against dispensaries in compliance with laws in the 16 states where pot is legal for people with doctors' recommendations.

The Department of Justice issued a policy memo to federal prosecutors in late June stating that marijuana dispensaries and licensed growers in states with medical marijuana laws could face prosecution for violating federal drug and money-laundering laws. The effort to shutter California dispensaries appeared to be the most far-reaching effort so far to put that guidance into action.

Increased federal intervention will likely unify marijuana growers and sellers in a drive to change federal policy, National Cannabis Industry Association spokeswoman Melissa Milam said.

"We're not going anywhere. We're mothers, we're patients, we're family members of patients," she said. "We want to pay taxes, we want to be able to make deposits at our bank, we want to be a business."

Not all of the thousands of storefront pot dispensaries thought to be operating in the state are being targeted in the crackdown, which also involves new indictments and arrests of marijuana growers and vendors throughout the state over the past two weeks, said Wagner, who represents the state's Central Valley.

The strategies federal authorities are using vary somewhat, with warning letters issued by the U.S. attorney in San Diego giving recipients 45 days to comply and property owners in Los Angeles, Orange County and the Central Coast given just two weeks to evict pot dispensaries or growers.

Haag said she is initially going after pot shops located close to schools, parks, sports fields and other places where there are a lot of children.

Wagner, who represents the state's Central Valley, also is targeting what he termed "significant commercial operations," including farmland where marijuana is being grown. Birotte is prioritizing dispensaries in communities where local officials have been trying unsuccessfully to shut down marijuana businesses.

Moreover, the four said their warnings were aimed at cities and counties that have started licensing and taxing marijuana shops.

"The ordinances are illegal under federal law," Haag said, citing an appellate court ruling this week against Long Beach's ordinance that charged shops fees to operate.

The California Board of Equalization has estimated medical marijuana generates between $53 million and $104 million in annual sales taxes on sales of between $700 million and $1.3 billion.

"If it creates revenue and jobs and increases safety, with all that's going on in the world and the nation, why is the federal government mounting this assault — just because they can?" asked attorney Mark Reichel, who represents three licensed Sacramento dispensaries that face federal charges or civil forfeitures.

"Absolutely it will have a chilling effect. More than that, it will have a freezing effect — it will freeze them out of the business," Reichel said. "A chilling effect is minor compared to what this is. This is a freezing winter storm."

Three of the four prosecutors declined to reveal how many dispensaries are subject to closure orders, saying only there were dozens in each of their four districts. Birotte said 38 property owners in his district were sent warnings.

Birotte said his office already had initiated property forfeiture proceedings involving three properties whose owners had received prior warnings.

The effort was criticized by two Democrat state legislators who represent San Francisco.

Assemblyman Tom Ammiano said the crackdown "means that Obama's medical marijuana policies are worse than Bush and Clinton. It's a tragic return to failed policies that will cost the state millions in tax revenue and harm countless lives."

"I don't understand the politics of it, and certainly if we haven't learned anything over the past century, it's that Prohibition does not work," added State Sen. Mark Leno, who has worked to safeguard and regulate medical marijuana in California.

Haag said the move is not designed to clamp down on patients who grow their own marijuana for medical use. But dispensaries that were not part of the initial wave of warning letters "shouldn't take any comfort," she said. "They are illegal under federal law."

"I understand there are people in California who believe marijuana stores should be allowed to exist, but I think we can all agree we don't need marijuana stores across the street from schools and Little League fields," she said.

Wagner said individual U.S. attorneys general in other states including Nevada, Oregon and Washington state have also coordinated actions with the U.S. Department of Justice.

But Justin Williams, the manager and marijuana grower at Mayflower Wellness in downtown Denver, said he believes Colorado's regulations on growing marijuana makes the state less of a target than California.

"I think their main concern is the lack of regulation in California with the explosion that's happened," he said.

 

[TerrorAP2]

Here is something to that extent: hxxp://www.kcra.com/news/29419682/detail.html

 

[NorCalHal]

Actually Orange, they are not trippin on IF the dispensaries are growing thier own herb. That was the one deduction that the IRS allowed Harborside. They allowed the monies spent on the wholesale product, but taxed on the full retail sales.
Technically, any member of the dispensary is allowed to "donate" thier herb to the Collective/Dispensary and the collective/dispensary is allowed to "compensate" you money for time and efforts and cost of growing the herb.

Judging from the amount of letters sent and the city/county locations it looks to me like the Cities that are having a hard time fighting the dispensaries and failing to have them shut down under State law, they are again bringing in Federal help to shut it down.
Harborside just got audited and is being audited again by the IRS, yet they did not recieve a letter.
Another big reason is that has become a TOTAL out in the open Industry. The Feds not reacting at all to what has taken place the last couple years is allready amazing to me.
But again, cats out of the bag, and they really have no choice but to either allow it and regulate it, or build some more prisons.
We are ready either way.