Feds escalate efforts to close California pot shops


Federal prosecutors are threatening to shut down medical marijuana dispensaries throughout California, sending letters that warn landlords to stop sales of the drug within 45 days or face the possibility that their property will be seized and they will be charged with a crime.

The stepped-up enforcement escalates the Obama administration’s efforts to rein in the spread of pot stores, which accelerated after the attorney general announced in 2009 that federal prosecutors would not target people using medical marijuana in states that allow it.

“It’s coming out of left field as far as we’re concerned,” said Joe Elford, the chief counsel for Americans for Safe Access, which advocates for medical marijuana use. “I really don’t know what inspired this. It’s a complete about-face from what [Obama] said when he was campaigning.”


The initiative, spearheaded by the four U.S. attorneys in the state, will focus on dispensaries selected by the prosecutors, said a person familiar with the operation. He declined to say what criteria would be used to target dispensaries and asked not to be identified because the prosecutors are scheduled to make the official announcement at a news conference Friday morning in Sacramento.

Landlords for some dispensaries have already received letters, including the owner of the building that houses the Marin Alliance for Medical Marijuana inFairfax, Calif., the oldest dispensary in the country. “I assume the story you’re calling about is: Obama takes resources away from fighting terrorists and goes after old ladies with glaucoma,” said Greg Anton, a lawyer who represents the dispensary.

The letter to the Marin Alliance notes that the dispensary is within a prohibited distance of a park, raising the possibility that enforcement will zero in on stores within 1,000 feet of schools and playgrounds, a distance that can bring enhanced penalties for illegal drug sales. But letters received by dispensaries in San Diego make no mention of such prohibitions. “We’re trying to figure this out,” said Jessica C. McElfresh, who represents some dispensaries in the city. “I am surprised at the size of this. I am surprised by the vast amount of planning that has clearly gone into it.”

U.S. Atty. Andre Birotte Jr. in Los Angeles could not be reached for comment, but the source said the prosecutor would not initially focus on dispensaries in Los Angeles.

Dale Gieringer, the director of California NORML, which backs legalizing marijuana, said the approach appears to reflect the state’s regional differences. “They want to do a clean sweep in San Diego, whereas in Northern California they can’t possibly do a clean sweep,” he said. “There’s no political support for it. It would be devastating.”

The administration has also ratcheted up pressure on dispensaries by demanding back taxes and penalties after audits disqualified deductions for business expenses. Federal authorities also are leaning on banks to close accounts belonging to owners of dispensaries and telling firearms dealers they cannot sell to medical marijuana patients.


Lynnette Shaw, the owner of the Marin Alliance, said she has paid taxes since she opened her dispensary 14 years ago and was advised by the Internal Revenue Service to deduct expenses. But the IRS has audited her 2009 returns and demanded $1 million, which Shaw said is about equal to her gross revenue.

When Barack Obama was running for president, he joked about smoking marijuana and said the federal government should not interfere with medical marijuana users who follow state laws. After he took office, U.S. Atty. Gen. Eric Holder made that stance policy.

More recently, however, the Department of Justice and some federal prosecutors have limited their tolerance. When Oakland and Berkeley made plans to allow industrial-scale pot cultivation, the U.S. attorney for the area threatened prosecution. The cities shelved plans that officials said were motivated by the desire for increased regulatory control and tax collection.

Although California was the first state to decriminalize marijuana for medical use in 1996, it remains a federal crime to possess or sell it, and the tension between state and federal laws continues to play out.

“The Obama administration, as far as medical marijuana has been concerned, really hasn’t been much different than the Bush administration,” said William G. Panzer, an Oakland lawyer who helped draft the medical marijuana initiative.

The Bush administration sent similar letters to landlords who rented to dispensaries in 2007. In Los Angeles, many dispensaries were forced from their locations, but most simply found new ones. “They succeeded in closing a handful of collectives, but nothing ever came of it,” said Don Duncan, the California director for Americans for Safe Access. “There are more open now than there were then.”


Activists said the government does not have the money or staff to force the dispensaries to close. “It’s a lot of huffing and puffing,” Elford said, “but we’ll see if they actually blow the house down.”