The new federal crackdown on medical marijuana announced on Oct. 7 by California’s four U.S. attorneys sent chills throughout the industry. It was a stunning reversal by the Obama administration.
Only two years ago, Deputy U.S. Attorney General David Ogden wrote his infamous “Ogden Memo,” announcing that the feds wouldn’t bother businesses in compliance with their own state laws. It proved a dose of Miracle-Gro to California, where pot-selling stores have multiplied since voters approved the state’s 1996 medical marijuana law. By late last year, California reportedly had more dispensaries than Starbucks outlets.
Colorado also made it legal in 2000 and saw a similar explosion of new storefronts. The same thing was happening to varying degrees in 16 states, from Arizona to Washington, New Jersey to Delaware.
But the feds’ tolerance wasn’t quite what it seemed. While legal weed grew into an industry worth an estimated $10 billion to $100 billion annually — no one’s quite sure of the exact figure — activists noticed an alarming undercurrent to the rhetoric: Raids on growers and dispensaries actually increased under Obama.
As hundreds of thousands of state-approved, doctor-recommended patients happily bought their medicine in well-lit stores from knowledgeable “budtenders,” the ire of cops and prohibitionists rose.
The first sign of Obama’s subterfuge came in late 2010, as California prepared to vote on a ballot proposition that would have legalized growing and possessing small amounts of marijuana for anyone older than 21. Under pressure from teetotalers — nine former Drug Enforcement Agency chiefs begged Obama to oppose the measure — Attorney General Eric Holder said it didn’t matter what Californians thought. The feds would continue to bust people regardless of the election.
The measure got 46 percent of the vote but not enough to pass. Yet the medical side of things kept going strong — too strong for Obama.
When the Oakland City Council prepared to authorize large-scale cultivation centers, Melinda Haag, the U.S. attorney for California’s Northern District, issued the first in what would become a series of letters from her fellow attorneys general. She reminded residents — in no uncertain terms — that marijuana was still criminalized under federal law, considered equal to heroin or methamphetamine, irrespective of its medicinal value.
Nor did she care what California law said. Her “core priority” would be to prosecute “business enterprises that unlawfully market and sell marijuana” under federal law.
Over the next few months, attorneys general from Maine to Washington wrote their own increasingly menacing letters. In Washington, the feds even threatened to arrest state workers who helped foster the industry.
Then the Obama administration released a new letter to “clarify” Ogden’s memo. Deputy U.S. Attorney General James Cole verified the about-face: The only people safe from arrest were “seriously ill” patients and their caregivers.
Everyone else? Be warned.
The letter didn’t just target those directly involved in the trade. Cole also was threatening supporting industries — read: banks — with money-laundering charges for dealing in the proceeds from marijuana. Obama had launched a full-on attack on the industries essential to any functioning enterprise.
Banks responded by canceling their weed-related accounts. “Perhaps there may be a few financial institutions here or there that are still accepting accounts,” says Caroline Joy, a spokeswoman for the Colorado Bankers Association. “Those facilities don’t want to reveal who they are.”
The president’s push grew louder last month. The U.S. Alcohol, Tobacco and Firearms Bureau warned medical marijuana patients that they couldn’t legally use pot and own or buy guns.
Then came a one-two punch.
On Oct. 5, the IRS ruled that one of the largest California dispensaries, Harborside Health Center, owed $2.5 million in taxes because federal law precluded standard deductions for businesses engaging in illegal activity.
In other words, Obama was not only blowing off state laws. He was also declaring that legal businesses were now nothing more than criminal rackets. And he was carving away every tool they needed to function.
Harborside’s owner said he’d go out of business if the IRS didn’t reverse course. Dispensaries nationwide saw it as a crippling decision.
Then came another blow two days later: The bombshell dropped by California’s four U.S. attorneys. They were now going after people who leased stores and land to the pot industry. Violators were given 45 days to close doors, uproot plants and kick out renters. The penalty for not acting: seizure of property and arrest.
Laura Duffy, the U.S attorney for California’s Southern District, went so far as to threaten media with prosecution for taking pot advertising. [Disclosure: This newspaper accepts such ads.]
There was no doubt about it: Obama was intent on killing an entire industry — in the midst of a horrible economy, no less. Left unexplained was why, especially since he was giving the finger to voters in 16 states just a year before he would face them in his own election.
Democratic strategists were perplexed.
Roger Salazar, a California party consultant, believes the president may be trying to reach out to a broader base. But that doesn’t explain the attack on his own base. Democrats support medical marijuana in high percentages. It doesn’t even make sense in luring conservatives. With the country in economic tatters, who has weed high on their radar?
“It’s a mystery, it really is, where the pressure is coming from,” Salazar says. “My sense is it’s coming from law enforcement.”
Certainly Obama’s threats are real. He may be loath to jail landlords, bankers or even dispensary owners. Arresting nonviolent, state-sanctioned businesspeople wouldn’t be popular. But his quieter war of chopping merchants off at the knees through credit and leasing would ravage the trade.
Still, the president has thrown himself into an uphill fight. There is reason to believe medical marijuana will persist, despite his betrayal.
MARIJUANA REALLY IS MEDICINE
Earlier this month, in a timely coincidence, the California Medical Association’s board voted to encourage the feds to legalize marijuana.
Though spokeswoman Molly Weedn emphasizes that the decision by the doctors’ group hinges on a call for more research, a report studied by the CMA board before its decision makes it clear that — at the least — marijuana shows promise as a medicine.
The CMA’s Council on Clinical and Scientific Affairs “has also concluded that components of medical cannabis may be effective for the treatment of pain, nausea, anorexia and other conditions.”
The report goes on to say:
“Cannabinoids are presently thought to exhibit their greatest efficacy when implemented for the management of neuropathic pain, which is a form of severe and often chronic pain resulting from nerve injury, disease or toxicity.
“The University of California Center for Medicinal Cannabis Research (CMCR) recently reported to the California legislature the results of a number of studies. Four studies involved the treatment of neuropathic pain; and all four demonstrated a significant improvement in pain after cannabis administration.”
The doctors note that while using marijuana may entail risks, such as addiction, they argue that its prohibition may be more dangerous than the drug itself:
“Under the current prohibition of cannabis, public health is also affected by increased rates of crime surrounding cannabis cultivation, sale and use. The California Legislative Analyst’s Office estimates that the incarceration and parole supervision of cannabis offenders costs the state tens of millions of dollars annually.”
Nationally, prohibition burns through billions of dollars in lives lost to the violence inherent in the black market, the incarceration of thousands of productive, nonviolent Americans, and the lack of access to a beneficial medicine.
Are lots of people using weed without suffering from a medical problem? Absolutely. But just because you’ve heard that half or more of the patients take the drug for “severe and chronic pain” doesn’t mean they’re all faking it.
In June, the Institute of Medicine estimated that 116 million Americans suffer from significant, chronic pain.
As more research comes in showing that pot can be an effective treatment, and with new Gallup poll shows that a record 50 percent of Americans believe marijuana — and not just the medical kind — should be legalized. The poll follows a continuing trend over the past several years of increasing support for legalization.
Obama has chosen to swim against the tide. But there’s reason to believe his fight is about politics, not public safety. If this were about safety, alcohol would be the president’s primary target.
Politics causes both sides to fudge the truth. Yet prohibitionists and the government have been particularly egregious. The government is using taxpayer dollars to prop up its side, with the U.S. Justice Department’s 64-page booklet, “Speaking Out About Drug Legalization,” a prime example.
The booklet, distributed in print and online, states that “smoked marijuana is not scientifically approved medicine.” Forget that by labeling it a drug on par with heroin, the DEA is curtailing the proper study of marijuana, since it prevents even scientists from possessing it for research. The publicly funded propaganda also flies in the face of the opinion of doctors, who see pot’s potential as medicine.
It’s a strategy that has trickled to states with functionaries unhappy about executing the voters’ will. Last December in Arizona, Will Humble, the state’s Department of Health Services director, held a news conference about the state’s new Medical Marijuana Act. He took a moment to remind reporters that more than 1,000 Arizonans died last year from accidental overdoses from prescription drugs.
But when asked how many of those died from marijuana, Humble refused to answer — to chuckles from the audience. He referred the question to his chief medical officer, Laura Nelson, who would only say she’d “have to do the research on that” before she could answer.
Then Nelson began stammering about the danger of marijuana due to “car accidents” — although she had done no research on that, either.
The CMA’s new report, “Cannabis and the Regulatory Void,”interestingly, sheds light on statements like Nelson’s. It says that prohibitionists often make unsubstantiated claims about car crashes or other purported harms. Studies disagree on marijuana’s risks to motorists, though there’s no question that booze increases the chances of a crash, the report says. Moreover, simulated driving tests reveal that pot smokers overestimate their degree of impairment and “compensate effectively.”
If one were a cynic, one might also view U.S. Attorney Laura Duffy’s threat to target advertising as a less-than-subtle threat to control the debate.
True: Federal law prohibits advertising illegal drugs. Google, for example, agreed to pay a $500 million fine this summer for taking online ads promoting “rogue” Canadian pharmacies.
But pot dispensaries are legal businesses within their states. Under Duffy’s threat, the feds will have their say, while the pro-pot message would be erased from public view.
Kent Scheidegger, legal director for the conservative Criminal Justice Legal Foundation, tells L.A. Weekly that Duffy’s threat gave him the willies.
“They’re on much thinner ice going after the newspaper,” says Scheidegger, who otherwise believes the feds should enforce their own laws against marijuana. “Maybe there is a political strategy.”
It’s called the “Shut them up” strategy.
THERE WILL BE PUSH BACK
Federal law is, for now, on the side of the prohibitionists.
Scheidegger downplays the state victories handed to medical marijuana. He says if the American people want to change the law, they need to encourage Congress to do so.
Yet that ignores a basic political reality: It’s difficult for any politician to stand up for marijuana. He or she will be quickly painted as pro-pothead.
Like women’s suffrage, the medical marijuana movement has — in 10 states, anyway — benefited from the direct democracy of citizens’ initiatives. These elections have taken the pulse of voters in a way that congressional elections cannot.
In six other states and Washington, D.C., medical marijuana was legalized by local lawmakers. Other states are bound to vote in favor of decriminalizing pot in the next few years in spite of federal laws.
Phoenix attorney Ty Taber sees it as a major states’ rights issue. “Basically, the citizens of these states … they want marijuana legalized,” he says. If Obama wants to play hardball, he says, “You’re going to get push back.”
Taber represents Compassion First, a company that helps set up dispensaries. The firm sued Arizona after Gov. Jan Brewer, in blatant defiance of voters’ wishes, derailed the dispensary portion of Arizona’s new law by instructing the Department of Health to reject applications. She simultaneously sued the federal government, asking a judge to rule on whether the state’s new law was legal. (Ironically, the U.S. Justice Department’s civil department is defending against the lawsuit — and if the feds win, Arizona might just get its first legal dispensaries.)
Compassion First wants the program implemented as Arizonans intended, and to remove blockades Brewer has thrown in its path. For instance, Arizona requires dispensary owners to have been residents for at least three years.
But the point isn’t so much whether Compassion First will win its lawsuit or not — it’s that it’s fighting back, and it’s not alone.
Across the country, advocates are returning fire in the courts. Which means Obama won’t be able to do battle by the relatively cheap means of letters and threats. He’ll likely end up burning through millions of dollars in litigation — money he doesn’t have.
Taber thinks the president may have underestimated his foe. “The people behind this marijuana movement — they’re committed. They are zealots. And these are smart people — not stoners saying, ‘Hey dude, pass another slice of pizza.’ ”
HALFHEARTED CRACKDOWNS DON’T WORK
The latest crackdown will be bad for the pot business, no question. But Obama could be doing much, much more.
He could go after patients. Over the summer, a federal judge ruled that the DEA could peek at the names on Michigan’s medical marijuana patient registry. Because marijuana is illegal under federal law, said Judge Hugh Brenneman Jr., patients can’t expect privacy.
The feds also could hit pot-tolerant cities. The law doesn’t allow municipal workers to be jailed in such prosecutions, but cities or counties could be heavily fined just for setting up zoning requirements for dispensaries.
There’s a huge downside to that, of course. Obama will only appear mean and small for having sickly grandmas arrested. And fining cities just enrages residents picking up the tab — the very people the president will need a year from now.
All of which leaves him fighting at partial speed. That, in turn, leaves the “zealots” Taber mentions betting their money and freedom that even if the feds throw the book at some, it won’t be them.
Earlier this month, the feds raided several growing operations in California and Oregon, including one in Mendocino County that appeared to be playing by the state’s rules. But it seems safe to assume that few of the hundreds of other growers in Mendocino County uprooted their crops in response — just as the hundreds of dispensaries in California did not immediately close their doors after the feds’ ominous warning on Oct. 7.
The industry seems to be practicing a form of civil disobedience. And it has tens of thousands of seriously sick people behind it, who will holler loudly if they’re forced back to the black market.
Indeed, there are some signs that Obama’s crackdown will employ what S.F. Weekly’s Chris Roberts calls “passive aggressive strategies.” Rather than offend Americans with news footage of police raids, Obama has launched a war of attrition.
Landlords, worried the feds will steal their property, will tell dispensaries to move out. Banks won’t handle money for pot-themed businesses. Dispensaries will be taxed so heavily, they won’t be able to cover their payroll or pay the electric bill.
Yet it remains to be seen whether federal prosecutors, who undoubtedly have even more serious criminals with whom to contend, are willing and able to carry out the threat. When Jack Gillund, U.S. Attorney Melinda Haag’s spokesman, was asked whether her office has the resources to go after every dispensary or grower who doesn’t comply with the 45-day deadline, he offered a simple reply: “No comment.”
Lauren Horwood, a spokeswoman for U.S. Attorney Benjamin Wagner in California’s Eastern District, says Wagner’s goal isn’t to shut down everything. He’s focusing on “large, professional, moneymaking operations — the commercial operations.”
Horwood also says that it’s wrong to call it “Obama’s crackdown.” She says the California U.S. attorneys decided to take action on their own because the situation has grown out of control among recreational users. But she acknowledges that they received Obama’s blessing.
It’s classic political strategy: Send the underlings out to take the heat, while the bosses hide under their skirts.
Either way, the result casts Obama as even more zealous than George W. Bush, who threatened owners of dispensary properties in 2007 but never followed up. Meanwhile, Colorado and other states have seen no similar crackdowns. Only time will tell whether Obama plans to destroy the entire medical marijuana industry, or merely smack California around for a bit.
“I’m willing to give the Obama administration the benefit of the doubt,” says Blair Butterworth, a Democratic consultant in Seattle, where about 100 dispensaries operate. “In California, they may be sitting on uncontrollable drug sales. They need to slap some wrists.”
It’s easy to pick on California, a state known for its excesses. But, “the last thing Obama needs right now is to go to war nationally with the medical marijuana community,” Butterworth says.
Leniency for marijuana users, medical or otherwise, continues to be a popular Democratic stance, he says. Butterworth is helping the campaign to put outright legalization on the Washington state ballot next year. He thinks it has a good chance.
Of course, a successful election could just tick off the feds even more.
A MILLION PATIENTS CAN’T BE WRONG
An estimated 1.1 million people in California have obtained a doctor’s recommendation to grow and use marijuana legally.
More than 150,000 medical marijuana patients had registered in Colorado as of July.
Tens of thousands of patients are registered in the other weed-friendly states.
If the feds shut down every dispensary in the country, all these people will still be able to legally possess marijuana — no matter where they bought it — under their state laws.
The only difference is they’ll be forced to go back to buying their weed from Mexican drug cartels rather than from Americans who provide jobs and pay taxes.
It’s akin to the feds saying that Anheuser-Busch can no longer sell beer. They would prefer that people buy only from Al Capone.
Hey, wait — didn’t something like that happen?