Recent Federal and State Crackdowns on Medical Marijuana Dispensaries

     In 1996 the State of California was the first to legalize medical marijuana in this country. Since then, 16 states, including the District of Columbia and Michigan have followed enacting similar legislation. Reportedly, California now has more marijuana dispensaries than Starbucks coffee shops. A recent Gallup Poll found that over half of Americans support the legalization of marijuana but despite burgeoning public approval, the Federal Government has recently begun an assault on medical marijuana never seen before. Now, more than ever, medical marijuana proponents are fearful of how it is going to end.

Pursuant to federal law, Marijuana is currently classified a schedule one controlled substance therefore its use and possession is unlawful. Prior to this summer, federal officials have proclaimed they would not enforce the federal law against persons who are following state created medical marijuana statutes. In 2008, the Obama Administration stated they would not use federal force against persons following state laws. Since then, medical marijuana dispensaries have spread combining to equal over $100 billion in business. Evidently, President Barack Obama and federal officials have changed their stance arguing that medical marijuana has become a front for illegal distribution. As such, this past summer the United States Department of Justice sent letters to several towns and cities all over the country stating the federal government will begin to enforce federal law against persons or organizations engaging in “unlawful” manufacturing and distribution of marijuana. They further threatened the use of criminal and civil penalties. These letters effectively curtailed the enactment of local legislation allowing dispensaries to operate.

On October 7, 2011 federal officials in California declared they would take action against any landlords who provided rental space to dispensaries giving them until November 21, 2011 to evict their tenants or face consequences. Several landlords have forced outlets tohalt their business operations. Less than a week later, an “exemplary” state law-abiding, nonprofit collective, Northstone Organics, was raided and taken down by the DEA. The Redwood Valley California organization had its operation previously authorized and inspected by the Mendano County Sheriff’s Department. Northstone’s organizer, Matt Cohen, also had his home raided by DEA and handcuffed for eight hours while his home was ransacked and their plants chain sawed down and removed. Northstone was completely compliant with state law with no evidence of abuse.

On October 27, 2011 the Americans for Safe Access, the largest pro-medical marijuana group in the country filed a lawsuit in California against the United States Attorney General and the United States District Attorney of Northern California alleging a violation of the 10th Amendment of the Constitution which conveys any power not specifically delegated to the Federal Government to the states citing the Federal Government’s selective targeting of medical marijuana providers and its direct threats to California cities in an attempt to disrupt state law.

In Michigan, Big Daddy’s Hydroponics operates a medical marijuana dispensary in Chesterfield Township. The Township filed a lawsuit in Macomb County Circuit Court attempting to shut down Big Daddy’s asserting they are a public nuisance. Michigan Attorney General Bill Schuette joined the lawsuit against Big Daddy’s. The outcome of this case could potentially be influential upon other organization’s decisions to continue or open further medical marijuana dispensaries. Arguments are scheduled to continue on December 20, 2011. This writer is of counsel to the Rasor Law Firm who defends Big Daddy’s.

Attorney General Schuette’s opposition to medical marijuana legislation has been seemingly an obsession. Some have alleged that it extends beyond his governmental responsibilities and declared he has a personal prejudice, possibly related to his family’s large financial state in the Dow Chemical Company. He recently has written several opinions further narrowing his interpretation of the Michigan Medical Marihuana Act (MMMA) . On November 10, 2011 in Opinion 7262, Schuette stated that when a police officer seizes medical marijuana pending confirmation of the status of a MMMA card holder, the return of the medicine to a properly registered patient or caregiver is unlawful and the police officer could be subject to criminal prosecution for delivery of marijuana or other unspecified civil penalties. Schuette is threatening law enforcement and compelling them to deprive medicine to persons lawfully using marijuana. In Opinion 7259 he stated that joint cooperative cultivation of marijuana was unlawful. In Opinion 7261 Schuette declared that landlords may prevent and evict a tenant for lawfully using medical marijuana in their own homes.

Alternatively, there are officials in public government that are asking for leniency. Recently the governors of Washington and Rhode Island have petitioned the federal government to reclassify marijuana and declare that the drug has legitimate and accepted medical uses. Those two states are two of the sixteen in our country that have medical marijuana legislation and they want the recent federal crackdown efforts to cease. Rhode Island has affirmatively passed laws that specifically allowed state regulated marijuana dispensaries, something Michigan has yet to accomplish. The American Medical Association has also called for a review of the federal reclassification of marijuana to open the scientific and medical testing of marijuana. It seems as though until there is a reclassification, there will continue to be political and governmental unrest, uncertainty and oppression for the millions of Americans who receive legitimate palliative and medical benefits from the use of marijuana.

Federal officials are also using the Internal Revenue Code (IRC) to penalize lawful medical marijuana dispensaries. IRC Section 280E states that a corporation that is involved in “trafficking” of a controlled substance may not deduct otherwise valid business expenses. Therefore, if the IRS declares a dispensary is engaged in “trafficking”, that business would not be able to deduct expenses like their rent, office supplies and equipment like computers and showcases. Harborside Health Center is a dispensary that operates in San Francisco Bay Area. The IRS recently audited their federal tax returns from 2007 and 2008 and determined that they owe $2.4 million in back taxes and penalties. IRS officials are now reviewing the 2009 and 2010 returns which is expected to produce another large amount of money owed.

To view a good CBS news story on the Federal Crackdown of Medical Marijuana Dispensaries, like the Harborside Health Center in Northern California, the self proclaimed largest dispensary in the Country click here.

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Not only does Barton Morris have extensive experience, he also engages in continuing legal education to provide the highest quality legal services. Barton has received specialized scientific training through the American Chemical Society. He attended the prestigious Trial Lawyers College and serves on its Alumni Association Board of Directors. His firm is prepared to take on complex legal issues with success. Barton Morris was chosen as a Top Lawyer of Metro Detroit for 2012 and 2013 for DUI/DWI and criminal defense by DBusiness Magazine. Barton Morris was also chosen as a Super Lawyer in Criminal Defense for 2014-2015 and Barton Morris is the only Lawyer in Michigan designated by the American Chemical Society as a “Forensic Lawyer-Scientist”

December 3rd, 2011|