Declaring that California's medical marijuana law "has been hijacked by profiteers," U.S. prosecutors announced charges Friday against dispensaries, growers and financial speculators throughout the state's medicinal pot market.
California's four U.S. attorneys also said they have seized properties of landlords facilitating the marijuana trade. And they delivered a rhetorical indictment of medical marijuana's evolution into cannabis commerce.
"The California Compassionate Use Act was intended to help seriously ill people," said San Francisco U.S. Attorney Melinda Haag, referring to the 1996 initiative that made California the first state to legalize marijuana for medical use. "But the law has been hijacked by profiteers who are motivated not by compassion but by money."
In a Sacramento news conference, Haag and U.S. attorneys from Sacramento, Los Angeles and San Diego detailed criminal cases against people who they said were pocketing mountains of cash from dispensaries that are supposed to operate as nonprofits under state law.
The charges come as the U.S. attorneys are sending out dozens of letters across California, warning dispensaries and landlords of potential prosecution and telling them to cease selling or growing marijuana within 45 days.
"Our intention is not to prosecute everybody in the state," said Benjamin Wagner, the U.S. attorney in Sacramento. "Our intention is to get people's attention in order to deter this activity."
On Friday, Wagner announced a criminal complaint that alleged a Los Angeles attorney, Nathan Hoffman, raked in millions of dollars while organizing a vast growing network for marijuana dispensaries in Southern California.
Wagner said Hoffman's "wide-ranging conspiracy to organize and finance major marijuana grows" brought in people such as prize-winning Sutter County tomato growers Thomas Jopson, 62, and David Jopson, 60. The brothers were indicted this summer along with an Oakland medical marijuana entrepreneur, Yan Ebyam.
Los Angeles U.S. Attorney André Birotte Jr. also announced an indictment charging six people from a former North Hollywood dispensary, NoHo Caregivers, with illegal drug trafficking.
The L.A. indictment alleged dispensary operators, pot growers and alleged couriers were sending 600 to 700 pounds of purported California medical marijuana to New York and Pennsylvania. Birotte said he is seeking to seize $14.7 million in proceeds from the operation.
In another case, Birotte said he is seeking seizure of an Orange County strip mall, where a landlord leased space to eight marijuana stores across the street from a preschool.
Holding up a marijuana magazine showing a pot leaf and wads of cash, Birotte assailed "brick and mortar Costo/Wal-Mart dispensaries" that he contended are turning huge profits "in a new California Gold Rush."
Outside the Sacramento federal courthouse where the news conference was held, marijuana advocates, including people with doctors' recommendations for medicinal use, marched and chanted, "We're healers, not dealers."
They charged that the federal government is launching an assault on the will of California voters who legalized medical marijuana and on sick people who need places to buy it.
David Brock, a Sacramento attorney who advises marijuana dispensaries on how to follow California's medical marijuana law, said prosecutions of alleged misconduct in the industry should be dealt with in state court – not through federal raids.
"They (federal prosecutors) need to respect the rights of the states instead of coming in with these heavy-handed and bullying tactics," Brock said.
Dan Rush, whose United Food & Commercial Workers International Union has organized 700 medical marijuana workers in California, said the U.S. attorneys were broadly and unfairly tainting an industry that largely operates legally and professionally.
Besides providing marijuana to people with medical needs, Rush said, dispensaries "are providing well-paying jobs and health care to thousands of families in the middle of the recession."
Wagner said U.S. prosecutors in California have no intention "to target the backyard grows and small amounts of marijuana" cultivated "for use by seriously ill people." But he said pot stores are illegal under U.S. law.
Outside the courthouse, F. Aaron Smith, executive director of the Cannabis Industry Association, a Washington D.C., lobbying group, said dispensaries are necessary for delivering marijuana to medical users.
"If they're saying they want cancer patients growing in their backyards, that means we are going to have thousands of unregulated grows," Smith said. "What we're asking for is a legal, licensed regulated system for people to obtain their medicine."
The U.S. attorneys offered a starkly different picture.
Birotte decried Los Angeles billboards advertising services of medical marijuana physicians, whom he blasted as doling out medical recommendations "solely for the purpose of recreational use."
San Diego U.S. Attorney Laura Duffy, who on Sept. 30 unsealed an indictment against two dispensaries and a network of growers, alleged the pot stores were marketing to customers under 21, including some likely to provide marijuana to children.
She took issue with dispensary pot treats, including "marijuana-laden cotton candy, flavored like bubble gum, and packaged with pictures of a clown.
"This is not a marketing campaign that is aimed at people under the supervision of a doctor," Duffy said.