Dispensary Raids, Warning Letters Stoke Fears of Renewed Crackdown on Cannabis Businesses

Did you miss the webinar “Women Leaders in Cannabis: Shattering the Grass Ceiling?” Head to MJBiz YouTube to watch it now!

Raids. Civil forfeiture notices. Warning letters.

The headlines coming out of California and Washington State over the past few weeks conjure up memories of last spring, when the medical marijuana industry was under assault on many fronts amid a widespread crackdown on cannabis businesses. The pressure subsided later in the year and seemed to fizzle out completely as 2012 came to a close.

But several recent developments are stoking fears of a renewed crackdown on the federal, state and local levels in some areas of the country, particularly California and – to a lesser extent – Washington State:

– Last month, the Drug Enforcement Administration raided a handful of dispensaries and sent threatening letters to dozens of others in several California towns, including Santa Ana. As in the past, some dispensaries were targeted while others were left alone – without any explanation why that was the case.

– US Attorney Melinda Haag has stepped up the pressure on the industry after a brief lull, sending out dozens of warning letters in recent weeks to landlords of dispensaries in several cities – including San Jose, San Francisco and San Bernadino. All the dispensaries are located within 1,000 feet of schools or parks. Haag and other US attorneys had substantial success using the same tactic last year to shut down hundreds of dispensaries.

– Last week, federal agents raided one of the last remaining dispensaries in San Diego as well as nine indoor marijuana cultivation sites. The move comes despite efforts by the mayor to stop enforcement actions against local MMJ centers and pass new dispensary-friendly legislation. The feds also filed a lawsuit against the landlord of noted dispensary Berkeley Patients Group, which has been operating for nearly 15 years in the city of Berkeley. The government says the dispensary is operating too close to schools – even though it recently moved locations to ensure it was at least 1,000 feet away from one – and violating federal drug laws, even though the roughly 2,000 other dispensaries across the country are technically doing the same.

– The DEA sent cease-and-desist letters to nearly a dozen dispensaries in the Seattle area last week, saying they are located too close to schools, parks or other areas where children congregate. The letters – similar to ones sent to about 24 centers a year ago – give the dispensaries 30 days to close. As in California, some dispensaries near schools were left alone. Some observers think the government is trying to send a message as Washington State implements its recreational marijuana law. One dispensary owner told the Seattle Times that the federal government “sees too much money and the whole looming specter of recreational cannabis going down,” adding that the crackdown “has more to do with keeping investors’ enthusiasm under control than any proximity.”

– On Monday, the California Supreme Court ruled that cities and towns do indeed have the authority to ban medical marijuana dispensaries, dashing the hopes of MMJ advocates. The decision ensures that the 200 or so city bans across the state will remain in place and paves the way for other cities to bar dispensaries. In total, dozens – and potentially hundreds – of additional dispensaries could close across California over the next few months. Some municipalities are expected to enact new bans soon, while other cities that have bans in place but were not enforcing them are already moving to crack down.

In Garden Grove, for instance, city officials reportedly hand-delivered letters to the roughly 80 dispensaries in town telling the owners to close down. “Please be advised that failure to cease operations of the marijuana dispensary on or before May 14, 2013 will result in enforcement action, which may include criminal charges being filed against any person found to be operating the dispensary, administrative penalties in the amount of $1,000 for each day that the marijuana dispensary continues to operate, the filing of a civil action, or any combination thereof,” the letters read. The warnings also mention the possibility of jail time for owners who do not comply.

Once again, the MMJ industry – particularly in California – is operating in an extreme state of uncertainty. The big fear now is that the crackdown will spread to other states. That seems unlikely, given increasing support for MMJ among the general US population, pending medical cannabis legislation in several states and the recent moves by Colorado and Washington to legalize marijuana for adult use, which ostensibly is a bigger concern for the feds than medical cannabis.

However, as we’ve seen time and time again, predicting what will happen in this industry from one day to the next is impossible. It’s also difficult to determine the government’s line of thinking, as there often seems to be no rhyme or reason to its actions when it comes to medical cannabis.