Major California Court Ruling Favors State-Legal Cannabis Businesses

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A pioneering California dispensary that was shuttered years ago by an aggressive anti-marijuana U.S. attorney has won a major legal battle that could have repercussions across the marijuana industry.

U.S. District Judge Charles R. Breyer has ruled that an injunction against the Marin Alliance for Medical Marijuana should be lifted.

The judge based his ruling on a new Congressional law – the Rohrabacher-Farr Amendment – that prohibits the Department of Justice from spending funds on prosecuting cases against medical marijuana providers and patients in states where medical marijuana is legal.

Evidence suggested, Breyer said, that medicinal cannabis suppliers had been “substantially impeded” by the closing of the Marin and other dispensaries. Breyer also noted that the dispensary’s owner, Lynette Shaw, had run a model business.

The ruling sets a precedent that could help prevent federal prosecutors from targeting state-legal medical cannabis enterprises, attorneys said. The decision also makes it easier for marijuana businesses to defend themselves against federal lawsuits.

U.S. Attorney Melinda Haag closed Marin Alliance – the country’s first licensed dispensary – in 2011 as part of her wider crackdown against the marijuana industry. The dispensary had about 9,000 patients at its peak.

The legal battle hurt Shaw financially, and she started a GoFundMe campaign to help rebuild her dispensary.

Haag announced this summer that she is stepping down from her position as U.S. attorney.