By Ann Harrison

December 20, 2005

San Francisco -- DEA agents raided the HopeNet Medical Cannabis Cooperative today, returning after dark to break down the door after a three-hour standoff with the HopeNet supporters.

According to DEA spokesperson Casey McEnry, the raids were a result of a two-year investigation that began as an anonymous tip. The information led to home in Penngrove, California where the DEA also served a search warrant today and seized 217 marijuana plants from an indoor grow. Two additional marijuana grow sites in San Francisco were also raided.

"I can tell you that it is a clear violation of federal law to cultivate, possess and distribute marijuana," said McEnry when asked why federal agents would raid a medical cannabis cooperative operating under California law. "Today, as the DEA, we enforced federal drug laws and conducted a lawful search of these four locations and we seized marijuana."

McEnry said the investigation into the Penngrove site led agents to the home of HopeNet directors Steve and Cathy Smith. DEA agents presented a federal search warrant and raided the Smith's residence and grow room on Clara Street in San Francisco today at 7 am. According to McEnry, 122 marijuana plants were seized from the Clara Street building plus an unknown amount of currency and processed cannabis.

No arrests were made at either the Penngrove or San Francisco locations. But McEnry said information seized from the Smith's residence led agents to the HopeNet Cooperative and another warehouse location on Clara Street. Agents seized approximately 500 marijuana plants from the warehouse location and marijuana brownies and butter from the cooperative at 223 9th Street. McEnry says agents secured federal search warrants for each location.

"It was a DEA only investigation and did not receive any assistance from the police," said McEnry.

No arrests have been made in connection with any of the raids. But McEnry says the DEA is working with the San Francisco U.S. Attorney's office to review the evidence. "Arrests are possible," says McEnry. "We are evaluating information and the investigation is ongoing."

According to Steve Smith, ten armed DEA agents woke him and his wife Cathy up at 6:30 am, took him outside in his underwear, handcuffed him, and searched their house and grow room at 272 and 237 Clara Street. Smith said his building is 25 feet from the home of San Francisco District Attorney Kamala Harris who Smith said confronted the agents as they were raiding his home. "She came out and said it was too bad," said Smith.

Smith said the agents confiscated $20,000 in cooperative operating funds and personal cash, grow room equipment, a cell phone, keys, 80 marijuana chocolate milks, personal papers, business and patient records. According to Smith, he and his wife have no bank accounts that agents could seize. According to the search warrant, signed by U.S. Magistrate Elizabeth La Port and special agent Christopher Fey, agents were specifically looking for business records and lists of customers.

During the search, agents found a business card for HopeNet which led them to the cooperative. According to Smith, the cooperative left no cannabis at its building overnight to discourage theft.

Continue reading "DEA Raids San Francisco Medical Cannabis Cooperative and Grow Sites" »

Posted by ann at 03:08 AM | Permalink | Comments (5)

By Ann Harrison
ah@well.com

As San Francisco city officials hash out a series of proposals to regulate medical cannabis dispensaries, a survey released yesterday suggests that the majority of city voters do not believe that pot clubs pose any problems to civic order.

The poll, conducted by Evans-McDonough on behalf of California NORML, found that 52% of respondent disagreed that medical marijuana dispensaries are out of control and are a major neighborhood nuisance and crime magnet compared to 30% who did.

The poll results stand in sharp contrast to extensive media coverage of neighborhood opposition to dispensaries - and subsequent calls by San Francisco political leaders to limit the number of cannabis clubs.

“Eighty-four percent of San Franciscans think that the number of dispensaries in the city should be determined by the needs of the patients, not the politicians,” said Dale Gieringer, director of California NORML, who announced the poll results on the steps of San Francisco City Hall.

The poll of 400 likely voters found instead that 63% of respondents favor legalizing, taxing and regulating marijuana for general adult use. Gieringer noted that he had recently returned from Holland where marijuana is sold to people over 18 and not considered a problem by authorities. “If they can do it in Amsterdam, we can do it in San Francisco,” said Gieringer.

Continue reading "Poll Supports Legalization of Marijuana in San Francisco" »

Posted by ann at 12:31 AM | Permalink | Comments (0)

Updated 7/16

In their quest to pare down the forty some medical cannabis dispensaries in San Francisco, city officials have first singled out dispensaries that have drawn complaints from neighbors. Because the city has yet to set up an official dispensary review board, the targeted dispensaries say they are vulnerable to political pressure from neighbors who simply don’t like the idea of dispensaries in their neighborhood. Unhappy neighbors say the disputed dispensaries disrupt their quality of life and present hazards they want to eliminate.

One embattled dispensary, Health and Wellness Alternatives at 935 Howard Street in San Francisco, was shut down by court order two weeks ago after a neighbor initiated a civil action. The dispensary is holding an open house this weekend to try to generate a discussion with local residents. The dispute surrounding this dispensary has sparked an especially unpleasant situation for city officials – an outspoken neighbor and others opposed to the facility, squaring off against a quadriplegic medical cannabis patient fighting hard to keep his business open. The dispute illustrates just how ugly, expensive and time consuming a neighborhood dispute can become when a city has fails to implement a grievance process that addresses problems before they explode.

Continue reading "Cannabis Dispensary Holds An Open House" »

Posted by ann at 10:38 AM | Permalink | Comments (1)

The Wo/Men's Alliance for Medical Marijuana (WAMM), raided by the federal government in September 2002, is marching in downtown Santa Cruz, California on July 16 at the Pacific Garden Mall.

The March will begin at the corner of Pacific Avenue and Cathcart Streets
walking north and proceed to Church Street, then assemble at Santa Cruz
City Hall where a press conference will be held at 1pm.

WAMM is expecting more than 1,000 people to participate in this
demonstration of community solidarity opposing the recent decisions by Congress and the
Supreme Court that leaves sick and dying Californians
vulnerable to persecution from the federal government.

In a symbolic act of compassionate access, WAMM patient members will lead
the March carrying live medical marijuana plants. This solemn event will
honor the 154 WAMM members who have died since its inception in 1993.

WAMM received the first ever federal injunction against additional federal raids last year. Since the Supreme Court's Raich decision on medical cannabis, WAMM founders Valerie and Mike Corral expect the government to petition the courts to lift the injunction. They also expect to be targeted by federal prosecutors and are already under investigation by the IRS which has referred their case to the criminal division.

The irony of these investigations is that WAMM is purest example of a medical cannabis collective which charges no money for its cannabis and never purchases the marijuana its patients use. The collective grows its own cannabis and depends on donationed cannabis when the government seizes their crop. The government will lose this fight. It has already emboldened federal judges to defy the policies of the U.S. Justice Department and placed the most critically ill patients in the center of the medical cannabis debate.

Posted by ann at 01:36 AM | Permalink | Comments (0)

San Francisco city supervisors have put forth competing proposals for city ordinances to regulate medical cannabis dispensaries. Supervisor Sean Elsbernd - who pushed through a resolution directing the city attorney to investigate two clubs in his district that allegedly violated the city’s dispensary moratorium (and were later raided by federal agents) - wants to cut the number of San Francisco dispensaries from around forty to eight.

Supervisors Ross Mirkarimi and Gerardo Sandoval have each proposed actual legislation for regulating the clubs that will be hashed out in the coming weeks. Mirkarimi’s proposal would require that the clubs obtain permits from the Department of Public Health, the Planning and Building Departments. The application fee for opening a dispensary will cost $7,396. If cannabis is smoked in the facility, it must be located 1,000 feet from schools, cultural or community centers. If cannabis is not smoked, dispensaries must keep 500 feet away from these facilities.

Patients may possess no more than one pound of dried marijuana and no more than 12 mature or 24 immature plants unless their doctor indicates that this amount does not meet their needs. Dispensaries would be limited to selling patients one pound of cannabis per visit and may not maintain more than 12 mature or 24 immature plants per patient.

Under this proposal, the dispensaries could be operated only as collectives or cooperatives as outlined under California Senate Bill 420. Dispensary employees would be allowed to receive compensation for their work and be paid for their expenses, but the sale of medical cannabis for “excessive profits” is explicitly forbidden.

According to the Mirkarimi proposal, residents within 300 feet must be notified that the dispensary is opening and have 30 days to participate in a planning committee review of building permit applications. Dispensaries in operation before the April 1st moratorium, will have 18 months from the effective date of the legislation to obtain the proper permits. Any dispensary operating in a residential house or residential mixed-use district must close. Neighbor Laura Weil, who lives nearby the Health and Wellness Alternatives dispensary run by Charlie Pappas, has been granted a temporary restraining order against the club based on an allegation that the club is located in an inappropriate neighborhood. Pappas is fighting the injunction.

Mirkarimi’s proposal, while generally reasonable, could give law enforcement an opportunity to try and block dispensaries from opening. It would allow the San Francisco police to conduct criminal and employment background checks on those operating or working in medical cannabis dispensaries. Each medical cannabis dispensary would also be required to make their records available for inspection, examination and copying by the Department of Public Health. While the proposal supports the keeping of records on patients only by the number on their medical cannabis id cards, records of transaction with vendors would be vulnerable to federal subpoena.

Rebecca Saltzman, field manager for Americans for Safe Access (ASA), the medical cannabis patients advocacy group, says her organization likes most of Mirkarimi’s proposal with the exception of the 1,000 foot rule which would put clubs in locations that would make it difficult for patients to visit. She says ASA also wants to focus on increasing the plant limits which are still too low. While Saltzman says ASA doesn’t like the police background check requirements, she doesn’t think they can win that battle.

Posted by ann at 05:47 PM | Permalink | Comments (1)

The staff of the Vapor Room medical cannabis dispensary in San Francisco have written in to say that they are concerned about whether San Francisco’s sanctuary resolution protecting cannabis patients and caregivers will stand up to an increased DEA presence.

“How it can possibly be enforced when we will be seeing a brand new, state of the art federal building opening up within a few months. 2500 new agents in San Francisco are going to be very busy looking for things to do. What do you think the city’s stance will be then?” asks the folks at the Vapor Room.

I think it's pretty clear that the city of San Francisco will not be able to stop a concerted DEA action. Who will they call? Their own police force which cooperated with the DEA in the last series of raids? City officials are hoping that if they regulate the clubs, the feds will be less likely to shut the dispensaries down. No one knows yet whether this strategy will actually work. The dispensaries may have to go underground again – a scenario that would not benefit patients or their caregivers.

But even before the new federal building opens in San Francisco, I think the DEA will continue to wage war on medical cannabis growers and dispensaries. In Oakland, across the bay from San Francisco, there’s an uneasy feeling that the DEA may soon target that city’s four licensed dispensaries.

One of the four, Compassionate Caregivers, has until tomorrow, July 1st to reopen after having its bank accounts seized by the Los Angeles Police Department last month (see the June 15th &18th blog posting and story ”After Raich”). If Compassionate Caregiver’s don’t reopen, their permit will be given to another dispensary. Medical cannabis supporters say the DEA may raid Compassionate Caregivers to prevent it from opening and hit the other dispensaries while they’re at it.

Dispensary operators say they are on guard for any signs of trouble. “We are on the look out,” says Jeff Jones, director of the Oakland Cannabis Buyers’ Cooperative. “We feel that daily, the step of the federal government is closer.”

Resistance to the DEA from the city government in Oakland is likely to be weak and even welcoming. Mayor Jerry Brown is running for State Attorney General and has never resisted law enforcement action against dispensaries or growers in Oakland. Members of the Oakland Police Department are cross designated to support DEA operations, and some members of the city council would be happy to see the dispensaries disappear.

We’ll stand by to see whether Compassionate Caregivers reopens. The group’s Oakland headquarters ran seven dispensaries around California that served over 20,000 patients.

Posted by ann at 04:19 PM | Permalink | Comments (0)

According to Casey McEnry, public information officer for the DEA's San Francisco office, federal agents raided another indoor cannabis grow in San Francisco last Friday, June 24th. Three hundred plants were seized but no arrests were made. The DEA did not provide the location of the raid.

The San Francisco office of the U. S. Attorney said two of the eight defendants still wanted by the DEA in connection with the raid have turned themselves in. Van Nguyen is not among them.

Posted by ann at 10:26 AM | Permalink | Comments (2)

Feds raid SF pot clubs

SFPD helps DEA seize more than 9,000 marijuana plants and shutter three dispensaries

By Ann Harrison

As federal agents from the Drug Enforcement Administration and the Internal Revenue Service swarmed into the Herbal Relief Center medical cannabis dispensary on June 22, Phung Van Nguyen, who owns the business, watched quietly from the sidewalk.

Nguyen didn't know that afternoon that he was one of 20 people, mostly Asian men, indicted for allegedly participating in what federal prosecutors claim was a large-scale marijuana cultivation and distribution operation that used dispensaries as a front for non-medical marijuana sales and money laundering.

"I have nothing to do with any of that," said Nguyen at an emergency meeting of patients and caregivers held at another San Francisco dispensary later that day. "I take care of patients and now I can't get those people their medicine."

The two-year investigation, known as Operation Urban Harvest, searched 26 homes and business around the Bay Area. According to the US Attorney's Office, the raids located 10 indoor grow sites leading to the seizure of over 9,000 cannabis plants with an estimated value of over $5 million dollars.

Three medical cannabis dispensaries were raided in the sweep: Alternative Relief Co-Op at 1944 Ocean Avenue, the Sunset Medicinal Resource Center at 445 Judah Avenue, and the Herbal Relief Center at 1545 Ocean Avenue. Another dispensary location at 1939 Ocean Avenue was also searched.

Twenty people, including Nguyen, were indicted for conspiring to cultivate and distribute more than 1,000 marijuana plants. Three were also indicted for conspiracy to possess with intent to distribute ecstasy, based on one alleged sale of 1,000 ecstasy tablets. Fifty more doses were seized during the raids. Two defendants were charged with conspiracy to launder money because they employed checking accounts to make lease payments on property where cannabis was grown using the proceeds of marijuana sales.

The US Attorney's office said that prior to last week's raid, local law enforcement, including the SFPD and Oakland Police Department, assisted the investigation by serving 16 search warrants and seizing over 17,000 marijuana plants. According to an affidavit, 11 of the 20 people indicted by federal authorities last week were first arrested by the SFPD in six raids of growing operations in San Francisco and Oakland from November 2003 to December 2004.

District Attorney Kamala Harris, who pledged in a June 22 Bay Guardian opinion piece that she would not cooperate with federal prosecution of patients and caregivers, did not reply to a request for comment. "The district attorney must come out and affirm protection of medical marijuana patients in San Francisco; nothing short of that will be satisfactory to establishing some amount of confidence to medical marijuana patients that the city has their back," said Kris Hermes legal director of the Americans for Safe Access patients group.

Activists say they are outraged by the participation of the SFPD, despite the 2001 sanctuary resolution passed by the Board of Supervisors urging the police not to assist in the harassment, arrest, or prosecution of physicians, dispensaries, patients, or caregivers. The SFPD confirmed they were involved in the larger investigation, but insisted they were not raiding dispensaries.

"We are not involved in any enforcement action against any medical marijuana clubs," said SFPD spokesman Neville Gittens.

Despite this assertion, the Bay Guardian identified SFPD narcotics officer Sgt. Marty Halloran at the scene of the raid against the Alternative Relief Co-Op. Nguyen said he saw three uniformed SFPD officers raiding his club. "The San Francisco police are under no obligation to assist the DEA. what is going on here?" asked Hermes, after he watched Halloran string police tape in front of the Alternative Relief Co-Op.

"What's really frightening is how separate the city's left hand is from the city's right hand," said ASA director Steph Sherer, who added that the city attorney and Planning Department were also in the dark. "The Chief of Police did not know what was going on and was very surprised to find out that the San Francisco Police Department was there, as were the staff of most of the Board of Supervisors. What we need to shake down is who's controlling the San Francisco Police Department, who is controlling the narcotics unit."

Coincidentally, on the day after the raids City Attorney Dennis Herrera released his office's investigation of 13 cannabis dispensaries – most of which were found to be in compliance with the city's moratorium on new clubs. The Green Cross dispensary at 3412 22nd Street is appealing the suspension of its permits for unrelated causes. "The patients and caregivers of San Francisco deserve responsible dispensaries that respect our city ordinance – and by and large that's exactly what our investigation has found," said Herrera in a statement.

Hermes says the federal accusations against an allegedly organized group of Asian men is intended to undermine support for medical cannabis by playing on fears of Asian mafia involvement. "It's a clear divide and conquer strategy," said Hermes.

While the DEA suggested they were targeting "illegitimate" dispensaries, Hermes notes that the federal government considers all medical cannabis dispensaries to be drug traffickers and will block them from using medical cannabis as a defense in court.

Javier Pena, special agent in charge of the DEA in San Francisco, said federal authorities would continue to investigate dispensaries that he referred to as "large marijuana trafficking organizations." Pena said he was particularly intent on investigating manufacturers of cannabis-infused baked goods seized in the raid because they could be consumed by children. "We are cooperating in an investigation with the FDA to look into these products," said Pena.

Asked for proof that the raided dispensaries were violating state medical cannabis laws by distributing cannabis to non-patients, US Attorney Kevin Ryan cited a conversation between defendant Enrique Chan and an undercover agent during which Chan allegedly sold the agent 1,000 doses of ecstasy. According to the affidavit, Chan never mentions a dispensary by name. But federal authorities deduced from Chan's comments that he operated the Sunset Medical Resource Center and the Herbal Relief Center, grew cannabis in the back rooms, sold the cannabis for a higher price on the street, and planned to have patients testify on his behalf if he was arrested.

Nguyen was indicted after Chan told the undercover agents that Nguyen was an employee, not an owner. The SFPD also found three pounds of cannabis in Nguyen's car after he met with someone who looked like Chan. Federal authorities concluded that Chan operated the Herbal Relief Center through Nguyen "in an effort to shield himself from criminal liability."

"I am not a profiteer, I don't know what money laundering is," Nguyen told the Bay Guardian last week after the DEA had issued a warrant for his arrest. "I have nothing they can seize from me. I'm taking a loss to help these patients."

Unlike the other defendants, Nguyen is a well-known medical cannabis caregiver in San Francisco and the city's first Asian American dispensary owner. Patients say that Nguyen, known as Van, gave away three pounds of cannabis each week to those who could not afford the $40 average cost for an eighth of an ounce of cannabis in the city's dispensaries.

"Van took care of a lot of patients who were extremely ill and from what I've seen has a lot of compassion for the community," said Shona Gochenaur, a patient, harm reduction counselor, and San Francisco ASA volunteer. "I think it is a racial issue because they have only brought in Asian people."

Was Nguyen a cannabis Robin Hood who took from those who had plenty and gave to those in need? Did he allow others to operate through him as the government alleges, or was he used?

Nguyen says the cannabis seized by the SFPD was his weekly donation intended for patients and noted that the police later dropped all drug charges. After owning the business for five years, Nguyen said he turned the operation of the dispensary over to others because he needed a break from managing it.

"I'm the owner, but if other people are doing something wrong I don't know about that. I tried to keep them in line as much as I could, but I needed help," said Nguyen. "I met with local community and business groups, and the local police, and anyone I could to let them know I was legitimate and didn't have anything to hide."

"I know Van Nguyen. He is an honorable man doing his best to help patients," said Mike Aldrich, former director of CHAMP, one of the first cannabis clubs in the city. "He was a member of the San Francisco city [medical cannabis] task force and he tried to work for many years with city officials to operate legally under state and local laws."

Nguyen told the Bay Guardian he was looking for an attorney to represent him before he turned himself in to the DEA, but he's in debt and doesn't have the money to hire a lawyer. Friends say he spent last weekend trying to find an attorney, but the lawyers experienced in drug cases had already been hired by the other defendants.

Nguyen, 27, is facing a mandatory minimum sentence of 10 years in federal prison. He says he will fight the charges against him. "I would not have been standing in front of my store if I was doing all those things they said I did," said Ngyuen. "This is what I believe in, and I am not running away."

For more information or to read documents and transcripts associated with the raids, read Ann Harrison's blog at www.ontherecord.org.

Posted by ann at 10:13 AM | Permalink | Comments (0)

Many people have e-mailed me asking for a copy of the affidavit in support of the search warrants for this week's raid on SF medical cannabis dispensaries. I have been sent a link to a text file of this document and the attached criminal indictments. Here it is.

http://www.toad.com/20050623-dea-mmj-complaint.txt

and in djvu viewer format which you need to download a plug-in for

http://www.toad.com/20050623-dea-mmj-complaint.djvu

download available at

http://www.djvuzone.org/

Someone will hopefully post these documents in a PDF file soon. If you do, please send them to me at ah at well.com. I am also encouraging people to post comments to this blog in addition to e-mailing me directly. I appreciate your e-mails, but I'd like to see these comments shared.

Posted by ann at 11:39 AM | Permalink | Comments (2)

U.S. Attorney Kevin V. Ryan: I would like to now turn to Javier Pena who is the special agent in charge of the Drug Enforcement Agency (he means Administration) here in the Bay Area.

Pena: Thank you Mr. Ryan I appreciate it and I want to thank you all for coming here this morning. I just want to make a couple of brief comments echoing Mr. Ryan’s statement. DEA has always targeted and will continue to target drug trafficking organizations marijuana cultivators and those who finance their operations. Operation Urban Harvest, which is what we labeled yesterday’s operation, targeted a marijuana and ecstasy trafficking organization which was in clear violation of federal drug laws.

I want to think the following agencies for an extensive two-year investigation which was conducted by DEA, Secret Service, IRS, ICE, D&E, San Francisco Police Department, Oakland Police Department and San Mateo Narcotics Task Forces. We got a lot of questions about the San Francisco Police Department’s participation and I want to say that they were involved in this investigation of the conspiracy investigation, however, they did not participate in any of the enforcement operations against the dispensaries.

These narcotics traffickers, supply large amounts of marijuana to a number of medicinal marijuana dispensaries which the organization operated. They used their interest in these dispensaries to illegally cultivate, possess and distribute marijuana throughout the San Francisco Bay Area. At these grow locations, we seized over 9,300 plants which we we’ve estimated, doing the math with previous cases, to be worth over $5 million. Interesting also we seized commercial packaged cookies, brownies, cakes all made with marijuana and we’ll have pictures later on. They were packaged for consumption and anybody who had gotten this.

This organization had been operating for over four years. It is now dismantled. We put a stop to their distribution of marijuana and ecstasy and their laundering of illegal proceeds. We will continue to work with our partners in law enforcement to target drug trafficking organizations, taking them apart from top to bottom including their financial networks.

I just want to end with this, there are some of the public that think they can disregard the courts and Congress, I just want to say that DEA will not be among them.

Hines: My name is Kenneth J. Hines, I’m Assistant Special Agent in charge of Criminal Investigation of the IRS here in Bay Area. And I would just like to state that the IRS criminal investigation is proud to be part of this multi-agency task force working together with state, local and federal authorities. Yesterday’s operation was the culmination of hard work and dedication from the agents assigned to it from different departments investigating this activity.

The primary responsibility of the Internal Revenue Service is the administration of tax law and the enforcement of criminal tax codes and laws. However, IRS expertise is in the area of follow the money. Whether it relates to legal or illegal activities, the Justice Department and Treasury have made it a key point in all our investigations to make a financial part to all these investigations which involve illegal activity and criminal organizations.

Organizations such as this will use means and methods to disguise illegal proceeds derived from their activities. And try to disguise that from law enforcement. The cooperation with this investigation and the agencies involved uncovered that and that is what led to the conspiracy on two indictments yesterday with two individuals.

As I stated before, the IRS is committed with our partners in law enforcement and the US Attorneys Office in enforcing the federal laws and making sure of the protection of the American public through the tax system and the money system as well.

Questions From The Press

Q: The pastries, did you say they appear to be packaged in a particular way or sold through stores?

Pena – Yes, I am saying they were packaged commercially. We are providing some CDs which will have some pictures. They were like chocolate bars, like brownies, to me they looked like you could get them anywhere and not know they had marijuana inside.

Q: Did they have brand name and were they distributed commercially?

Pena: Second question, I do not but there will be pictures in the CD.

Q: Where these places engaging in activity that was considered illegal even under the state medical marijuana laws in terms of its being a front for non-medicinal use?

Ryan: Well I’d like to do…I don’t know if these search warrant affidavits have been unsealed and distributed to the audience at this point. Without answering your question directly, let me refer you to page 44 and 45 of the search warrant affidavit and specifically to a conversation that is alleged to have occurred during the course of this investigation.

This, from our perspective, is a large scale trafficking organization that is involved, in our opinion, based upon the evidence, and as we allege in our indictment distributing a large amount of marijuana and controlled substances throughout the Bay Area. And if you look at the particular sections of the search warrant affidavit, you might glean from that conversation, what the intent was as to certain locations that we searched. Pursuant to these search warrants.

Q: The press release mentions conspiracy marijuana, distribution, money laundering and international bulk cash smuggling. I didn’t see anything about international bulk cash smuggling here in the indictment.

A: I believe if you read through the search warrant affidavit in its entirety, you will see some evidence and I believe that we are going to pursue that further. That there was in fact an effort to smuggle large amounts of cash outside the United States.

Q: Are there searches going on all over California? Are there other countries involved?

A: I can say that this is an active investigation including the individuals arrested in the original indictment and included in the subsequent complaint that was issued yesterday after the searches began. Not only are we looking for additional individuals pertaining to the original charging documents, but I can say that this matter is a continuing investigation and will go forward from this date.

Q From NYT: Can you tell us whether or not this investigation in your view is representative of the medical marijuana clubs or is this is an exception to how these clubs are operated in California?

A: I am not prepared to opine on that particular question, I can tell you that if you look at our charging documents and look at this search warrant affidavit, this conspiracy is alleged to be ongoing for over four years. This is a large scale, I believe, trafficking organization involved in large scale trafficking of marijuana. As I’ve indicated, we over the past two years, have searched 43 different locations, 27 of those have been what we call indoor grow locations.

Yesterday, the evidence led us to search three locations that are dispensaries for marijuana in San Francisco. The evidence led us there. We searched those locations and we left. And we are going to investigate this type of conduct and this case as we go forward.

Q: In yesterday’s arrest and searches, is that sending any message to other the so-called legitimate medical marijuana dispensaries around SF and California?

A: Well I’m not going to engage in hypotheticals, but I don’t have to remind the LA Times that trafficking in marijuana and large scale trafficking in particular is a violation of federal law. And there is an agency dedicated to the enforcement of our drug laws in this country. There are federal statutes that deal with the enforcement of our drug laws in this country. And when the evidence suggests to us that there has been a violation of federal law, then it is our obligation and duty to pursue that when and where it is appropriate.

Q: Does the California law that permits patients to use medical cannabis have any bearing at all on protecting the medical cannabis dispensaries?

Pena: Before I answer that question, one thing, and I think it is really important that I forgot to mention and I think it’s a public concern. On these three grow locations that we visited, they all had illegal wires tapping into PG&E the outlets all over the houses, very unsafe. I’m sure that you have heard of the situations were houses have been burning down, this causes a great deal of concern for us.

Like I said once you see that CD which we are handing out you will see the wiring system which is what causes the fires that were all contained in the three different areas that we went to. So this is how some of our houses are getting burned down.

What is your question again?

Q: What bearing does California’s medical marijuana laws have on the dispensaries?

A: We are talking about this case today not hypotheticals, but all I can tell you is they are in violation of our federal narcotics laws.
And we will continue investigating these large organizations.

Q: Many clubs are concerned about what happened yesterday.

A: I’m glad they are concern…(laughing)

Q: Are there more raids to come?

A: I’ll go back to my previous answer. We are investigating these large trafficking marijuana organizations. They are still against federal law and statutes.

Q: You said earlier there are members of the public who think they disregard the courts and the Congress, the DEA is not among them. Can you expand on what you mean by that?

A: I mean exactly that we will…they are still against federal narcotics laws and we will continue to investigate.

Q: No other sites hit yesterday other than those on that map….

A: Ryan: Yesterday there were a series of sites hit. There were homes, residences hit. There were residences that were searched. There were some other businesses that were searched. Of all the searches conducted yesterday three involved the dispensaries. So yesterday, the DA, together with the partner agencies searched as pursuant to state and federal search warrants.

Q: Were there any others in other parts of the Bay Area?

A: Possibly. I can talk to Luke about why they only put twenty dots in. There were 26 different locations maybe some of them were closed.

A: Were the dispensaries run by the traffickers, or were the dispensary guys in cahoots with the traffickers.

Q: Again I refer you to the particular part of the search warrant that I referred you to earlier. I don’t want to comment too specifically on the evidence at this point. And too specifically on an ongoing investigation.

A: Does the timing of this operation have anything to do with the recent Supreme Court ruling or were you waiting for that ruling?

Q: No, we don’t believe that Raich had any implications whatsoever for this type of case or these charges. As we indicated and as you familiarize yourself with the facts, this conspiracy, this alleged conspiracy, has been ongoing for over four years, we have been investigating it. We have been investigating it for two. Yesterday was the period of time when we were ready to execute and to do certain things. We have been executing over the last two years, a number of search warrants, state search warrants related to the case that indicate this has been an ongoing investigation and through this charging document you’ll see we’ve tied them all together. And for the last two years we have executing warrants and using the state court system as well as the federal system to do that.

Q: Could you talk about the ecstasy charges here? Was there actually ecstasy actually seized in this raid?

A: Yes, it is my understanding is that there were some ecstasy pills seized at one of the location, at one of the dispensary, I believe there were 50 tablets seized at one location pursuant to the searches yesterday.

Q: For a sick person taking marijuana in California right now under the state law should they be worried that there is a stepped up chance that they might be arrested?

A: I think if you look at our charging… I am not going to comment on the particulars of your question. But let me just say, if you look at this indictment and what we are here for today, we have indicted 19 individuals, 20 including the complaint that was issued yesterday afternoon. We believe that evidence suggests and the Grand Jury concurs and various state and federal judges have also agreed that there is enough evidence to go forward alleging a widespread conspiracy to distribute a controlled substance by a group of individuals who may or may not be working as an organization and as it relates to your particular question, it’s different.
We are not talking about ill people who may be using marijuana. We are talking about a criminal enterprise engaged in a widespread distribution of large amounts. Millions of dollars if you base it on historical evidence of marijuana and other drugs. And money laundering, the proceeds from activities here in this country and potentially allegedly in other countries.

Q: Could you name those countries?

A: No, we are not investigating any other countries.

Q: Both of your mentioned large-scale operations. What qualifies as large scale?

A: Well this does, we have over 18,000 plants. I’ll let the DEA answer the question as to how marijuana is processed, how it is harvested. How many times it is harvested a year, what kinds of proceeds you can get from the type of numbers that we are seeing here. I think if you look historically at some of the prosecutions in this area, just the amount of marijuana that was seized yesterday at the various location, over 9,000 plants and there were some seedlings as well seized, have harvested and solve is worth a street value a whole sale value of over $5 million dollars.

Now we can get into the hypotheticals of how many times you can harvest a grow site, whether it is one two, three or four times. Experts will give you a different opinion on that, but arguably, some instances we have seen grow sites harvested on multiple occasions. A grow worth approximately $5 million dollars at a particular cycle, if you do that four times a year. Some could make the argument that a grow site is worth, with this number of plants, under the circumstances is worth more than $5 million dollars. We consider this to be a very large operation involving large amounts of marijuana that has a very high value on the street on wholesale prices.

Q: Could you tell us how much was going to medical marijuana, how much was going to street sales?

A: I refer you to the search warrant affidavit. I can tell you it’s in the search warrant affidavit. I would refer you to a particular discussion by one of the individuals under indictment as to the nature of some of the distribution models as well as to the use of different venues to distribute marijuana.

I think the media today has a CD.

Q: You said there were 47 locations were served. How many were medical marijuana clubs.

A: Yesterday three dispensaries were served pursuant to search warrants and affidavits, the rest were indoor grow sites and other locations, business, homes, residences that evidence suggest were used as grow sites as well.

Q: There are lots of medical marijuana patients who are outside and upset by this. Are they being taken advantage of by people like this by people who are using their illness and their medical marijuana grows for illicit purposes other than helping those people out?

A: I am not going to comment on that.

Q: Will this types of investigations continue, state government be damned, local government be damned?

A: I say that this investigation is ongoing.

Posted by ann at 09:41 PM | Permalink | Comments (2)

I attended today's press conference at the U.S. Attorneys Office in San Francisco which addressed yesterday's raid of three medical cannabis facilities in the city. Since the press conference was not open to the public, I am posting my own transcript of what was discussed there. Reporters who attended were required to show their ID to enter the San Francisco Federal Building. They had their press credentials scrutinized, were escorted upstairs, and then filed past armed federal officers before being allowed into the U.S. Attorney's office for the press conference.

The first statement comes from U.S. Attorney Kevin Ryan. More to follow...

My name is Kevin Ryan I’m the U.S. Attorney for the Northern District of California I want to thank you for coming today. I want to issue a statement with regards to enforcement activity that occurred yesterday in the San Francisco Bay Area yesterday by multiple agencies involved in the enforcement of our federal laws. As you know at this point, agents from the federal government as well as with the assistance of state and local police departments and agencies, executed search warrants at multiple locations - 26 different locations in the Bay Area, all pursuant to state and federal search warrants issued by judges.

Additionally, arrest warrants have been issued and an indictment had been handed down by a Grand Jury sitting in this jurisdiction on June 16th which was under seal until today’s date, a copy of which has been made available for all of you. The indictment alleges and charges 19 individuals with conspiracy to grow and traffic over 1,000 plants of marijuana over a four-year period. Additionally, three individuals have been charged with conspiracy to possess with intent to distribute ecstasy and two individuals have been charged with a conspiracy to engage in money laundering.

Additionally, yesterday after the enforcement activity, an arrest warrant was issued for one Vince Ming Wan who is also now wanted by authorities for conspiracy to distribute over 1,000 plants of marijuana.

In the course of this two year investigation, federal and local and state police officers and agencies have executed a total of 47 search warrants at multiple locations including 27 indoor grow sites. In addition to the seizures that occurred yesterday, and they are as follows: yesterday we seized over 9,000 marijuana plants, in fact the total number at this point is 9,309. Without counting on the evidence itself from yesterday, historically that number of plants would have a street value of approximately $5 or more dollars. Three firearms were located, a rifle, a pistol and a revolver.

Eight vehicles were seized and at one location at least, two rather large rottweilers were escorted out of the premises. Over the last two years, in addition to the seizure yesterday, earlier searches also pursuant to state and federal search warrants, resulted in the seizure of an additional 8,500 marijuana plants. With - in conjunction with those searches - a discovery of operational facilities capable of growing and producing over 18,000 marijuana plants.

At this point I would like to thank the agencies involved in the investigation over the last several years, including specifically, the Drug Enforcement Agency, the San Francisco Police Department, the Oakland Police Department, the Internal Revenue Service, the United States Secret Service, Immigration and Customs Enforcement, the San Mateo Narcotics Task Force, and the California Bureau of Narcotics Enforcement.

Posted by ann at 04:49 PM | Permalink | Comments (0)

CITY ATTORNEY DENNIS HERRERA NEWS RELEASE
FOR IMMEDIATE RELEASE: THURSDAY, JUNE 23, 2005
CONTACT: MATT DORSEY (415) 554-4662

INVESTIGATION FINDS MOST ACCUSED MEDICAL
CANNABIS DISPENSARIES DID NOT VIOLATE MORATORIUM

Consistent with S.F.'s Status as a Medical Cannabis Sanctuary, City Attorney Investigation Is Limited to Moratorium Allegations, Unrelated to Action by Feds

SAN FRANCISCO (Jun. 23, 2005) -- In the wake of federal raids involving three medical cannabis dispensaries yesterday, City Attorney Dennis Herrera today released preliminary findings from an unrelated investigation by his office into charges involving more than a dozen medical cannabis dispensaries for allegedly violating a City moratorium that was passed without opposition by the Board of Supervisors on March 29 and signed into law by Mayor Gavin Newsom on April 1. The moratorium on the issuance of permits for new medical cannabis dispensaries sought to provide City officials time to adopt local ordinances consistent with state law to regulate the location and operation of the facilities "while still allowing for the operation of legally existing medical cannabis dispensaries to guarantee that patients, their caregivers and physicians have access to medical cannabis," according to the ordinance.

The City Attorney's Office investigated allegations by City departments, neighbors and anonymous sources of moratorium violations involving thirteen medical cannabis dispensaries. To date, investigators have established credible evidence that seven dispensaries in fact opened prior to the moratorium. An additional three facilities that were subject to allegations were found to have closed voluntarily. Another dispensary at 1939 Ocean Avenue, which appeared to have opened in violation of the moratorium, was shuttered by federal authorities yesterday for unrelated reasons. Two other dispensaries remain under investigation.

The City Attorney's investigation, which remains ongoing, is limited to issues involving the City's moratorium that took effect April 1. Consistent with San Francisco's status as a sanctuary for the use, cultivation and distribution of medical cannabis under the California Compassionate Use Act of 1996 and other state laws, the office was not in contact with federal authorities regarding actions undertaken by the Drug Enforcement Administration in San Francisco yesterday. As a civil law office enforcing City codes, the City Attorney does not initiate criminal investigations or enforce federal drug laws.

"At a time in which City policymakers are grappling to balance the imperatives of compassionate medical cannabis use with concerns from the neighborhoods they represent, our investigation is necessary to ensure that moratorium scofflaws don't inflame policy efforts or risk further involvement by federal authorities," Herrera said. "The patients and caregivers of San Francisco deserve responsible dispensaries that respect our City ordinances -- and by-and-large that's exactly what our investigation has found."

# # #

Posted by ann at 01:54 PM | Permalink | Comments (0)

United States Attorney
Northern District of California

11th Floor, Federal Building
450 Golden Gate Avenue, Box 36055
San Francisco, California 94102

Main Office: (415) 436-7200
Media Contact: Luke Macaulay (415) 436-6757

FOR IMMEDIATE RELEASE
June 23, 2005

15 ARRESTS MADE IN ALLEGED DRUG CONSPIRACY

20 Charged in Conspiracy to Distribute Marijuana and Ecstacy -
Indictment also Charges Money Laundering

Searches of 10 Indoor Grow Sites Led to Seizures of over 9,000 Marijuana Plants -
DEA Estimates Street Value at over $5 Million

SAN FRANCISCO - U.S. Attorney Kevin V. Ryan announced that yesterday, federal agents with assistance from local law enforcement conducted searches of over 25 locations and made 15 arrests1 in connection with an indictment returned last week and unsealed today. The indictment charges 19 individuals with conspiracy to grow and traffic over 1000 marijuana plants over a 4 year period; 3 individuals with conspiracy to possess with intent to distribute ecstasy; and 2 individuals with conspiracy to engage in money laundering. An arrest warrant was also issued yesterday for Vince Ming Wan, who is wanted by authorities for conspiracy to distribute over 1000 marijuana plants.

U.S. Attorney Kevin V. Ryan stated, "Operation Urban Harvest uncovered a large-scale marijuana trafficking operation involving over 25 locations in the Bay Area, including three San Francisco marijuana dispensaries. Documents unsealed today allege that this trafficking organization used several marijuana dispensaries in its conspiracy to facilitate the sale and distribution of illicit drugs, money laundering and international bulk cash smuggling. Over the course of this two-year investigation, over 17,000 marijuana plants were seized. The federal, state and local law enforcement agencies involved in this operation have done an outstanding job"

Yesterday's searches of 10 indoor grow sites led to seizures of over 9,000 marijuana plants, with a DEA estimated street value of over $5 million. Three firearms, ecstasy, and eight vehicles were also seized during yesterday's searches. Three marijuana dispensaries were searched in connection with these charges.

The following individuals were charged with conspiracy to cultivate, to possess with intent to distribute, and to distribute over 1000 marijuana plants:

Enrique Chan, 26, San Francisco
Richard Wong, 28, San Francisco
Bartholomew J. Alexis, 29, San Francisco
Sergio Alvarez, 29, San Francisco
Asa Lee Barnla, 25, San Francisco
Jay Chen, 29, San Francisco
Minho Thomas Cho, 25, Santa Clara
Faisal Mansoor Aly Gowani, 32, San Jose
Chi Duc Hac, 24, San Francisco
Darrick Curtiss Hom, 26, San Francisco
David Lee, 24, Pacifica
Genario Valentine Lopez, 23, San Francisco
Brian Heng Lun Ly, 26, San Francisco
Roselia Puga Mendoza, 24, San Francisco
Phung Van Nguyen, 27, San Francisco
Edward Wook Sung Park, 28, San Francisco
Iris Lai Hung Tam, 61, San Bruno
Edwin Gordon Toy, 29, San Francisco
Phat Van Vuong, 30, San Francisco

Enrique Chan, Richard Wong and Thy Quang Nguyen, 31, of San Francisco were charged with conspiracy to possess with intent to distribute MDMA (ecstasy). Enrique Chan and Richard Wong were also charged with conspiracy to launder money.

The following individuals are wanted by the DEA and upon learning of these charges should turn themselves in to authorities:

* Vince Ming Wan, 33, San Francisco
* Bartholomew J. Alexis, 29, San Francisco
* Jay Chen, 29, San Francisco
* Genario Valentine Lopez, 23, San Francisco
* Phung Van Nguyen, 27, San Francisco
Edward Wook Sung Park, 28, San Francisco
* Phat Van Vuong, 30, San Francisco
* Thy Quang Nguyen, 31, San Francisco

DEA Special Agent in Charge Javier Pena stated, "Operation Urban Harvest targeted an alleged major marijuana trafficking organization also allegedly involved in the distribution of MDMA (ecstasy), which was in clear violation of federal drug law. DEA will continue to work with our partners in law enforcement to target drug trafficking organizations and take them apart from top to bottom, including their financial networks."

Prior to yesterday's searches, local law enforcement executed state search warrants of 16 locations over the course of this investigation. These searches have led to the seizure of over 8,500 marijuana plants, with operational facilities capable of growing over 18,000 marijuana plants.

IRS Criminal Investigation Assistant Special Agent in Charge Kenneth J. Hines stated, "IRS Criminal Investigation will continue to investigate the financial aspects of drug investigations, such as we have here."

Federal and local law enforcement have been investigating an alleged drug trafficking organization. According to an affidavit filed with the court and unsealed today, this organization is alleged to be engaged in cultivating, importing, distributing, and selling large quantities of marijuana; importing and distributing MDMA; and engaging in money laundering and international bulk cash smuggling.

The defendants arrested yesterday made their initial appearance this morning in federal court. They are currently being held in federal custody.

Each count of conspiracy to cultivate over 1000 marijuana plants, in violation of 21 U.S.C. § 846 carries a mandatory minimum penalty of 10 years in prison. The maximum penalty for conspiracy to possess and distribute MDMA is 20 years in prison. The maximum statutory penalty for each count of money laundering in violation of 18 U.S.C. § 1956 is 20 years in prison and a $500,000 fine. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. An indictment only contains allegations against an individual and these defendants, as with all defendants, must be presumed innocent unless and until convicted.

The prosecution is the result of a two year investigation by agents of the DEA, San Francisco Police Department, Oakland Police Department, IRS Criminal Investigation, Secret Service, Immigration and Customs Enforcement, the San Mateo Narcotics Task Force and the California Bureau of Narcotics Enforcement. Andrew Scoble is the Assistant U.S. Attorney who is prosecuting the case.

A copy of this press release and related court filings may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can . Related court documents and information may be found on the U.S. District Court website at www.cand.uscourts.gov or on .

All press inquiries to the U.S. Attorney's Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay3@usdoj.gov .

1. This number includes two state arrests not charged in the indictment.
###
______________________

Luke T. Macaulay
Public Affairs Officer
U.S. Attorney's Office, Northern District of California
450 Golden Gate Avenue
Box 36055
San Francisco, CA 94102
Desk: 415-436-6757
Cell: 415-308-7843
Fax: 415-436-7234

Posted by ann at 01:43 PM | Permalink | Comments (1)

After raiding three and possibly four medical cannabis dispensaries in San Francisco today, the DEA is releasing few details about the scope of the investigation and declining to say if anyone is actually in custody.

The San Francisco Chronicle is reporting (from an anonymous law enforcement source) that the dispensaries were not targeted for drug operations, but because they were fronts for money laundering. This might account for the presence of IRS agents at the site, but not the DEA who was clearly leading the investigation.

The Chronicle is also claiming (again from an unnamed law enforcement source) that federal agents, joined by the SFPD, raided 20 homes and businesses as part of the operation. Stone-faced DEA agents referred all questions regarding today’s raid to the San Francisco U.S. Attorney’s office. A spokesman for the office, Luke Macaulay, said that there were arrests but will not comment further. Federal agents did arrest Dr. Molly Fry and her husband Dale Schafer today. Dr. Fry recommends cannabis to medical cannabis patients. They were charged with distributing and manufaturing at least 100 cannabis plants. Both were arraigned today at the Sacramento Federal Courthouse

The U.S. Attorney’s office, the DEA and the IRS are holding a press conference tomorrow morning at 11:30 at the San Francisco federal building. It is not open the public. To attend the press conference, you must present a government issued photo ID and "valid media credentials."

While he would not provide any information on the raids, Macaulay did go out of his way to try and shield the involvement of the San Francisco Police Department - despite the fact that SFPD Sgt. Marty Halloran was present at a raided dispensary.

“I want to point out that the San Francisco Police Department did not participate in the medical marijuana dispensary search,” said Macaulay. When it was pointed out that Sgt. Halloran was seen helpfully stringing police tape in front of the raided Alternative Relief Co-Op at 1945 Ocean Avenue, Macaulay said I should refer my question to the SFPD.

SFPD spokesperson Neville Gittens also denied that the SFPD was involved in the operation. “We are not involved in any enforcement action against any medical marijuana club,” said Gittens. Informed that Sgt. Halloran was present at the raid, he said he would send a press release from the SFPD public affairs office.

According to the SFPD press release: “This morning, June 22nd, the San Francisco Police Department participated in an enforcement operation which involved search and arrest warrants, targeting multiple locations throughout the Bay Area. This operation was part of a long-term federal criminal investigation. Although there were several medical marijuana clubs that were involved in this investigation, the SFPD did not take part in any investigation of these clubs or take any enforcement action against these clubs.”

DEA public information officer Casey McEnry, who confirmed at the Alternative Relief Co-Op that SFPD and the Oakland Police Department was involved in the federal investigation, also attempted to back peddle and claim that the SFPD was not directly involved. “They did not participate in the execution of the search warrant,” said McEnry who nevertheless confirmed that the SFPD and OPD were involved in the larger operation.

Matt Dorsey, a spokesman for the San Francisco City Attorney’s office, was eager to distance his office from the federal investigation. Dorsey confirmed that the city has an ongoing investigation against a dozen clubs that may have violated the city’s April 1st moratorium against medical cannabis clubs. But he said there was no link between the city’s investigation and the federal raid. “We are not involved in the federal raids and we have not contacted or been contacted by the DEA,” said Dorsey who added that he did not anticipate a large city-led crackdown. “We have evidence that the majority of the dispensaries being investigated opened before April 1st.”

Posted by ann at 07:17 PM | Permalink | Comments (0)

A team of DEA and IRS agents, together with local police, have raided at least four medical cannabis dispensaries in San Francisco today.

Outside one of the targeted dispensaries, the Alternative Relief Co-Op at 1945 Ocean Avenue, Casey McEnry, a public information officer with the DEA confirmed that local police were involved. “We have federal and local agencies participating in a law enforcement action at this location,” said Casey who said narcotics officers from the San Francisco Police Department and the Oakland Police Department were helping with the operation.

As a crowd of onlookers and media gathered outside the Alternative Relief Co-Op, DEA officers dragged entire plants and large cuttings out of the building. IRS officers from the Department of the Treasury were also present. Federal officers removed a computer from a car parked in front of the dispensary and appeared to be bringing the machine inside the dispensary to download data.

Sgt. Marty Halloran of the San Francisco Police Department was present in plainclothes. Witnesses say he put police tape around the entrance of the dispensary preventing media and onlookers from advancing further.

Another unmarked dispensary at 1939 Ocean Avenue two doors down from Alternative Relief Co-Op also appears to have been raided. A DEA agent is positioned in front of the dispensary and refused to answer questions. Both the dispensaries at 1939 and 1945 Ocean Avenue were named in a resolution passed by the San Francisco City Supervisors last week. The resolution urged the city to take action against the dispensaries that had allegedly opened after the moratorium against new dispensaries was passed by the city on April 1st.

Four blocks down Ocean Avenue at the Herbal Relief Center dispensary at 1545 Ocean Avenue, which has been open for at least four years, burlap bags containing plant cuttings could be seen heaped in the front office. Agents inside were combing through papers and other items in the front office. DEA officers were guarding the front of the building.

The Sunset Medicinal Resource Center dispensary at 445 Judah Avenue was also been raided. Smiling and relaxed agents with DEA and Secret Service jackets are clustered around the outside of the dispensary. Agents are removing items from the building in sealed plastic bags. Local resident Robyn Few stood outside the dispensary and said she was outraged. “I thought the city of San Francisco was a sanctuary city and didn’t cooperate with the DEA,” said Few.

Posted by ann at 04:29 PM | Permalink | Comments (1)

The anticipated shutdown of selected San Francisco medical cannabis dispensaries by city officials has begun. I will post accounts of this dispute over the next few days and you can decide for yourself whether the city is granting the dispensaries due process and a fair opportunity to respond to neighborhood concerns. This action could serve as a model for how other cities around California negotiate with their medical cannabis dispensaries.

On June 10, the San Francisco Planning Department suspended the change of use permit granted to San Francisco’s Green Cross medical cannabis dispensary. Prompted by Lawrence Badiner, the Planning Department’s Zoning Administrator, the San Francisco Department of Building Inspection also suspended the Green Cross’ building permit. Ironically, the Green Cross, located at 3412 22nd St., is one of only two medical cannabis dispensaries in San Francisco that actually has the proper permits to operate.

The city now has over forty medical cannabis dispensaries and acquiring permits is perceived by many as protection against arbitrary closures. Some dispensaries now feel that the targeting of the Green Cross shows that the city is determined to close dispensaries no matter what efforts they make to legitimize themselves. Residents opposed to the dispensaries see suspension of these permits as a acknowledgement of their concerns.

According to Reed, the dispensary has tried to be sensitive to neighborhood complaints. But he believes that a small group of influential neighbors has pressured San Francisco City Supervisor Bevan Dufty into calling for the suspension. “I don’t believe that five rich neighbors should have the right to call a supervisor and shut down a business,” said Reed. “I am going to fight for my patient’s rights to prove that cannot happen.”

In a June 10th letter to neighbors of the dispensary, Dufty wrote that suspension of the permits stems directly from the complaints conveyed to him by local residents. He invited neighbors to attend the eventual appeals hearing and said the City’s Attorneys office will continue to investigate. “…it doesn’t matter if a business sells donuts, bowling balls or medical cannabis – it has to abide by planning code and notification requirement,” wrote Dufty. “As much as I believe that the Green Cross made efforts to improve their relationship with the neighborhood, fundamentally, they are creating huge impacts that can’t be mitigated.”

In a letter to the Department of Building Inspection, Badiner wrote that the club’s Planning Department permit was being suspended because it creates conditions that are “hazardous, noxious or offensive through emission of odor, fumes, smoke, cinders, dust, gas, vibration, glare, refuse, water carried waste or excessive noise.”

Reed says he is not aware of any code violations, paid for neighbors to be notified that the club was opening, and disputes allegations that the club has failed to address neighborhood concerns. He notes that many of the issues raised by neighbors were discussed at a May 23rd neighborhood meeting that took place at Liberties Bar and Grill down the street from the dispensary at 22 and Guerrero. Dufty attended the meeting together with Captain Goldberg from the Mission Police Station, but representatives from Green Cross were not invited.

In the minutes of the meetings, it was recorded that neighbors complained that the club’s doorbell rang constantly and the smell of marijuana was prominent on 22nd Street outside the club. Many neighbors were also concerned about crime. According to the minutes, it appeared to many neighbors that “burglaries and thefts, hostile and intimidating behavior from nuisance drivers/parkers and suspected drug dealing” began occurring immediately after Green Cross opened in July 2004. The neighbors asked that the crime statistics be pulled for May 2003 – June 2004 and July 2004 – May 2005.

Reed says he was invited to another neighborhood meeting on June 6 that took place at St. James Church at Guerrero and 23rd on June 6. During that meeting, said Reed, the police representative concluded that an increase in crime was not linked to the dispensary. Reed said he informed neighbors at the meeting that the dispensary had made immediate policy changes to ensure quality of life in the neighborhood.

In an effort to address concerns regarding crime and traffic flow, Reed said the club invested in a comprehensive surveillance system with 16 cameras, infrared technology and a security staff that monitored the neighborhood from 9:30 am to 8:30 pm every day. Reed said the club set up a full time neighborhood watch and enforced a policy of zero tolerance regarding illegal parking. A full time club employee was also posted outside to ensure pedestrian safety and eliminate the need for a doorbell, said Reed.

According to Reed, the club also invested in a ventilation and filtration upgrade that vents to the roof and exceeds requirements. In my recent visit to the dispensary, Reed also showed off the club’s new door seals and ionizers. Reed says the club also fixed the cracked sidewalk, tends to the new planters on the block, and cleans the street of cigarette butts and trash daily. As a non-profit, tax paying dispensary, Reed says the dispensary paid 35K in city taxes so far this year and allocates 1% of all tax revenues to neighborhood beautification projects.

Reed thought these improvements were well-received at the June 6th neighborhood meeting. Evidently, Supervisor Dufty concluded otherwise and pressured the city to shut down the dispensary. Reed says the club will remain open despite suspension of the permits which makes operation of the club technically illegal. He says he plans to file an appeal of the decision with the Board of Appeals today.

In Part II, we’ll hear what the neighbors have to say and see if city officials care to comment.

Posted by ann at 11:57 PM | Permalink | Comments (1)

The Los Angeles Police Department, the DEA and the IRS continue to investigate Compassionate Caregivers Inc. The company closed its seven dispensaries after the Los Angeles Police Department seized its bank accounts June 6th. "We will not be taking action against medical marijuana facilities unless we can link those facilities to street sales and violent crime or gang activity here in Los Angeles," said LAPD spokesperson Lt. Paul Vernon. "We found some connection between that location and street crime in our city."

"It's absolutely laughable to think that a corporation with seven locations across the state is somehow linked to gangs or violent crime," countered Compassionate Caregiver's Executive Director Sparky Rose.

Rose says the search warrant used by the LAPD to raid the West Hollywood clubs made no mention of gangs or violence. According to Rose, the warrant mentioned only two patients who entered the West Hollywood facility with forged medical cannabis ID cards - and a patient who claimed to have bought more than six mature plants at time from the club which Rose says did not sell mature plants.

Attorney Bruce Margolin who is representing the company's West Hollywood dispensary that was raided by the LAPD on May 13, says the club never received a cease and desist order. Margolin challenges reports that the club was targeted because it sold eight ounces to a pound of cannabis to patients at a time. He notes that SB 420 sets no limits on how much cannabis a dispensary can sell to customers.

According to Margolin, Compassionate Caregivers worked closely with the West Hollywood Chamber of Commerce and the West Hollywood Sheriffs Department which were unhappy when the LAPD strayed out of their jurisdiction to bust the West Hollywood dispensary.

"Each police agency has their own philosophy and idea of what the law is and this is a problem," said Margolin. "We have a very sad situation here where the will of the people seems to be undermined and the law is only as good as the people who enforce it."

Rose says the LAPD exaggerated the amount of cannabis seized from the West Hollywood dispensary by weighing the cannabis together with the acrylic jars it was contained in. He says the 800 pounds of cannabis reportedly seized is off by more than an order of magnitude. "There was less than 50 pounds of dry cannabis on the premesis and then some cuttings in rockwool, some edibles, and some extracts," said Rose. "The killer for us was the tainted sodas which they weighed in the bottles."

"Everybody involved with medical cannabis is confused," said Rose who said he was informed about the seizure of his company's assets when he attempted to make a bank deposit. "It this the [federal] government involved saying 'we want to do this,' or is this the LAPD doing it just because they can."

Rose added that the shut down of the seven dispensaries has forced the lay off of 225 employees who have also lost their health insurance. He says the state must now pay unemployment benefits to those employees. According to Rose, Compassionate Caregivers had a weekly payroll of $170,000. "We were definitely trying to contribute a lot of money to the Oakland economy," said Rose. "We were a for-profit business, but we put the profits into opening new clubs."

Rose confirmed that his profit margin is between 5% and 15% after taxes and the amound of money seized from Compassionate Caregivers is less than 25% of its annual payroll. "While the LAPD might see this as a windfall, the cost will be borne by the California taxpayer while all of our employees draw unemployment and have to flood other social programs as a result of having no COBRA option for healthcare," said Rose. "With one phone call from the LAPD to the West Hollywood Sheriff, all if this could have been avoided...it's sad."

Posted by ann at 01:14 AM | Permalink | Comments (3)

The U.S. House of Representatives voted today 161-264 to defeat an amendment that would have prevented the U.S. Department of Justice and the DEA from spending tax payer money to raid and prosecute medical marijuana patients. News of the vote on this amendment to a DOJ appropriations bill was cut from my story After Raich published today by the San Francisco Bay Guardian.

My Bay Guardian editors are terrific and they have made it possible for me to cover the medical cannabis movement for the last five years. They did not cut this information out of the story because they wished to be unfair or censor me. This information was removed mostly due to space constraints and partly because the story focused on the ongoing prosecution of medical cannabis dispensaries. On the very day that the U.S. Supreme Court ruled in Gonzalez v. Raich that the federal government had the authority to prosecute cannabis patients and their growers under the Commerce Clause, the largest operator of medical cannabis dispensaries in California had its bank accounts frozen by the Los Angeles Police Department. Seven dispensaries run by Compassionate Caregivers Inc., which served 22,000 patients and caregivers, are now closed. Compassionate Caregivers was a big operation and it made some drug law reformers very nervous - especially right before the House vote. The medical cannabis patients group, Americans for Safe Access, declined to comment on the shut down.

The LAPD said their move to seize the assets was directly related to outcome of the Raich decision, despite the fact that it did not change California state law. I covered the Supreme Court ruling for the European wire service Agence France Presse and did a longer story for Alternet Supremes Uphold Status Quo that went out to weeklies around the country. Their rewrite of my opening paragraph was clumsy, but overall I liked their edit of the story. On the Alternet site, also check out former police chief Norm Stamper's terrific story War On Crime, Not On Drugs which posted today.

Posted by ann at 08:04 PM | Permalink | Comments (0)