In November 2011, Cannabis Law Group filed a
lawsuit against the City of Santa Fe Springs on behalf of one of our medical
marijuana clients. The City of Santa Fe Springs does not currently have a ban
or moratorium on medical marijuana. Last year, the City of Santa Fe Springs
sent cease and desist letters to all of its medical marijuana collectives
informing them they had to close by the end of September or face civil or
criminal prosecution. The City also sent letters to the collective’s landlords
threating legal action and forfeiture of the buildings.

Our client’s landlord caved into the pressure and sued our client for unlawful detainer/eviction in October of last
year. Our client boldly stepped up to the plate and stood up for the rights of
his patients to obtain the medicine they need. To this day our client remains
in operation. Our client’s lease specifically stated that the property was
being leased for use as a medical marijuana collective, which strengthens the
client’s chances of winning the eviction case. We always advise you as a
collective operator to have your landlord put “medical marijuana” in
the lease as it does make it tougher for them to evict you later. At this time,
we are preparing to go to trial on the eviction action this February.

After a few weeks with not much activity, the feds conducted another raid on a
medical marijuana collective this past Tuesday. This time it was G3 Holistic
with not one but three locations! One in Upland, one in Moreno Valley and
another in Colton. These two knuckleheads that own all 3 stores were doing
exactly what we have advised each of you NOT to do. This collective was yet
another “big fish” that was making a lot of money and one that the
feds could pick to make an example out of. Just like the collectives that were
shut down by the feds in Lake Forest, these collectives had also been in
litigation with their respective cities and had even obtained stays, which is
why they should have been left alone – unless they were operating for profit,
which is what has been alleged.

Know not to operate 3 shops because even if you are operating in a truly
non profit way, the perception to the authorities is that you are operating for
profit (especially when you have a Brinks truck drive up to pick up the money
like the big fish that was raided in Pomona when this all started – Green
Cross.  This collective also allegedly operated Green Ribbon in Corona and 3
more collectives in Northern California)

So what does this all mean for you and your medical marijuana collective? Continue
to follow all state medical marijuana laws. Pay your taxes. Don’t operate, or appear to operate
for profit. Many of us believe the feds are trying to make examples out of
those who are clearly in violation and are flaunting it. The State Board of
Equalization has a task force that is watching to see who pays sales tax and
who does not. I have been informed by a client that the State Board of
Equalization has come to their collective and demanded unpaid sales tax (they on a payment plan to pay back owed sales but were unable to make a payment after they were robbed)

Also make sure to pay state and federal taxes on an estimated quarterly tax payment plan to avoid
penalties, interest and the appearance of tax evasion. G3 has also been alleged
to have taken undercover patients with “phony recs” – although I find
this a little suspect. Either way, always verify each patient, each visit.

We’ll provide more medical marijuana legal analysis and details as we learn
more.

The so-called medical marijuana “Grower’s License” being advertised by doctors is a farce.  If you are thinking about spending your money on a grower’s license with the intent of
using that license to grow medical marijuana to sell to a medical marijuana collective, you should know that it is not legal to do this.

The “growers license” being hawked by many doctors has several problems with it.  First, you must understand that a “grower’s license” is nothing issued by the State of California or by any City or County.  It is just another form of a medical marijuana recommendation issued by Doctors.  Second and probably most important, the
“grower’s license” will only allow you to grow medicine for yourself.  If does not authorize you to grow 99 plants for a collective.  Nor does it authorize you to sell your extra medicine to other patients or other medical marijuana collectives.

The so-called “Grower’s license” is just a scam by doctors who want to take your money and give you the false sense of security that you large scale grow is legitimate.  The doctors 99 plant recommendation to you means that the doctor has evaluated your medical condition and determined that you suffer from a severe medical condition, a medical condition so severe that 6 mature plants will not suffice for your medical needs.  It does not authorize you to grow for others.

If your 99 plant grow is discovered by a cop, the officer will likely look to see if you have paperwork to evidence that your grow is legal under California state law.  If you are growing 99 plants and have only a 99 plant grower’s license, the cop could arrest you and the District Attorney could try to build a case against you with the theory being that you are not so “seriously ill” that you need 99 plants.  In that case, you would then need the doctor show up in court and testify that your medical condition was so serious that 6 plants were not enough and that you needed 99 plants.  If the Doctor is out golfing that day, he may not show up to testify and you are left trying to convince the jury that you, personally, needed pounds and pounds of medicine.   This argument may not work, especially if the doctor is not willing, or unavailable to stand behind his grower’s license and show up to testify.

So what’s the most legitimate way to grow?  The first thing you need to know is that California law says that collectives must get their medicine from their members.  Secondly, you can’t sell medicine from one collective to another.  Accordingly, the available law tells us that the proper way to grow for others is to first join a collective.  Don’t  rely on a “growers license” issued by a doctor who isn’t even a member of the collective for which you would like to grow.  Second, after you join the collective and establish a relationship with the other members, then obtain authorization from that collective to grow for other members of their collective.  The best way to do this is with contracts which are available from our medical marijuana law office.

Remember, the law says that qualified patients can get medicine from other members of the collective who grow for them.  So you don’t need the doctor and you don’t need to rely on a phony grower’s license either.

Attorney Damian Nassiri is the founding partner of the Cannabis Law Group, a law firm dedicated to the rights of patients, collectives and growers.  His firm’s medical marijuana lawyers offer  consultations and nonprofit incorporations to those who are interested in starting their own medical marijuana collective.   You can reach Cannabis Law Group at 714-937-2050 or visit the law firm’s website at www.cannabislawgroup.com

August 2011 Ruling in Qualified Patients vs City of Anaheim

Judge Chaffe of the Orange County Superior court just issued the attached ruling in the Qualified Patients vs. City of Anaheim case.  The Judge ruled in favor of the City of Anaheim, finding that their ban on medical marijuana is constitutional.  The Judge reasoned that the ban was legal because its goal of preventing the “mass distribution” of medical marijuana was not preempted by California’s Medical Marijuana laws, which allow for the collective cultivation of medical marijuana by qualified patients but does not allow for “mass distribution”.  Anaheim’s definition of a collective is 3 or more patients cultivating and distributing medical marijuana.  The Judge did rule that the criminal sanctions portion of the ban needed to be severed because it was invalid based on the fact that qualified patients have a defense to criminal marijuana charges. 

This case will likely be appealed again to the 4^th District Court of Appeals, 3^rd division.   In the meantime, some cities and their attorneys will likely view this case as a victory and precedence approving of local bans on medical marijuana collectives.  Meanwhile, we are hopeful that this case will be overturned and that in the meantime other cities will follow Garden Grove’s example, as they have replaced their ban with a registration and grandfathering process.

The City of Garden Grove has published their medical marijuana permit application.  Garden Grove Medical Marijuana Application 

From the City’s website:

On July 19, 2011, the Garden Grove City Council adopted Urgency Ordinance No. 2797 (the “Registration Ordinance”), which established an eligibility cut-off date and a registration process for potential eligibility of medical marijuana dispensaries for future permits, pending adoption by the City of regulations governing the location and operation of medical marijuana dispensaries. Pursuant to the Registration Ordinance, any person that wishes to be potentially eligible for a future permit to operate a medical marijuana dispensary in the city of Garden Grove must submit a registration form and accompanying documentation (“Registration Form”), which based on credible evidence, establishes to the satisfaction of the City Manager that the person is an owner or operator of a medical marijuana dispensary that has been open, operating, and providing medical marijuana at a fixed location in the city of Garden Grove since at least June 30, 2011 (an “established operation”).

Each Registration Form must be accompanied by a registration fee in the amount established by the City Council, should include originals or true and correct copies of certain documents showing that the applicant is an owner or operator of an “established operation,” and must be signed under penalty of perjury.

Specific information and documentation required is set forth on the Registration Form. Copies of the Registration Form and the Registration Ordinance may be obtained from the City of Garden Grove Finance Department, located in City Hall, 11222 Acacia Parkway, Garden Grove, California, or from the City’s website at www.ci.garden-grove.ca.us.no later than September 23, 2011. The City will evaluate your Registration Form, determine whether you are the owner or operator of an “established operation,” and notify you of its determination within thirty (30) days of close of the registration process. 

Note: Submittal of a Registration Form does not entitle you to open, operate, or expand a medical marijuana dispensary in the city of Garden Grove. Only those medical marijuana dispensaries whose owners or operators timely submitted a Registration Form and which the City has determined to be “established operations” will be eligible to apply for a permit.

If the Garden Grove City Council subsequently adopts regulations permitting medical marijuana dispensaries to locate and operate in the city of Garden Grove, only those medical marijuana dispensaries whose owners or operators timely submitted a Registration Form and which the City has determined to be “established operations” will be eligible to apply for a permit.

San Diego Union Tribune: By Christopher Cadelago, Reporter – County & Politics – Sunday, August 7, 2011 at 4 p.m.

San Diego Mayor Jerry Sanders will not increase efforts to shutter medical marijuana dispensaries, instead opting to preserve the status quo while collective operators look to forge their own path to legitimacy.

Last month, the City Council rescinded restrictions on the businesses rather than pay as much as $1 million for a public vote. Council members were forced to act after a coalition of medical marijuana advocates collected enough valid signatures to place a repeal on the ballot.

There were about 165 collectives when the rules were approved in April, all of which were operating illegally under current zoning laws. It remains up to code compliance officers to investigate complaints against collectives and tell them how to address problems, mayoral spokeswoman Rachel Laing said.

“We’re still approaching this on a complaint basis,” she said. “And I suspect that will continue to be the case.”

That Sanders has chosen not to engage in the contentious and potentially expensive process of regulating the proliferation of dispensaries should come as no surprise. City planners were not involved in drafting the regulations, which were slated to take effect without the mayor’s signature.

The prospect of closing down collectives poses logistic and legal problems at a time when the city is straining to provide basic services. San Diego face a $40 million deficit in a $1.1 billion operating budget for the fiscal year beginning July 1, 2012.

“The best use of resources is to get regulations that everyone can live with,” said Bob Selan of Los Angeles, CEO of Kush Magazine and a spokesman for the Patient Care Association. “We applaud the mayor’s decision and think it’s a good idea for everyone involved to have some breathing room.”

Cooperative directors and medical marijuana patients decried the repealed rules as too strict, even as collectives mushroomed at a velocity that has confounded city officials and touched a nerve with some neighborhoods.

The groups successful in overturning the ordinance — Patient Care Association, Citizens for Patient Rights and the California Cannabis Coalition — are working to craft regulations that wouldn’t consign dispensaries to far-flung industrial areas of the city.

Recent recommendations from the city’s medical marijuana task force would serve as a solid foundation for a proposed ordinance or initiative, Selan said.

The repealed rules sought to limit dispensaries to some commercial and industrial zones. Cooperatives would have to be at least 600 feet from schools, playgrounds, libraries, child care and youth facilities, parks, churches and each other.

Still, some community leaders and officials advocated an outright ban. Scott Chipman, chairman of San Diegans for Safe Neighborhoods, for months has been calling on the city to more aggressively enforce existing regulations.

Chipman said inaction on illegal businesses sends a powerful message to all residents that neither they nor city officials need to respect the rule of law where marijuana is concerned.

As it stands, all other businesses must have a business tax certificate, submit to inspections by government agencies such as the health department and comply with a state law that defines the conditions for manufacturing, packaging, labeling, advertising and selling food and drugs, Chipman said.

“With proper code enforcement the mayor could have shut down pot shops as they opened and could still shut down all existing pot shops,” he said.

Many cities and counties have struggled to deal with the rapid growth of dispensaries since state voters approved marijuana for medical use in 1996. Most municipalities waited until the past few years to begin establishing clear rules for storefront operators.

Regionally, only San Diego County has land-use regulations and a formal application process that applies only to unincorporated areas. The vast majority of local cities have either passed bans on dispensaries or used zoning laws to prohibit them. As a result, none have struggled as much as San Diego.

Since April 2009, code enforcement officers have opened 225 cases against dispensaries and made 79 referrals to City Attorney Jan Goldsmith. Code compliance has closed 56 cases, 11 of which were referred to Goldsmith.

Twenty-six collectives have closed down as a result of city attorney enforcement. Five are tied up in litigation brought within the last year and an additional 38 are in various stages of investigation, negotiation or pre-filing status, said Gina Coburn, Goldsmith’s spokeswoman.

The difference between police and code compliance cases is the latter are sometimes filed in civil court with a lower standard of proof.

“As prosecutors, the City Attorney’s Office will take enforcement action when law enforcement or code compliance provides sufficient evidence to meet our standard of proof,” Coburn said. “We will not look the other way on enforcement of the law on these or other cases. Again, however, there are circumstances where enforcement action is taken without the necessity of filing a legal action.”

Garden Grove Medical Marijuana Registration Urgency Ordinance July 2011
Garden Grove has gotten rid of their ban on medical marijuana.  The city’s new ordinance (click the link above to view the ordinance) will now allow existing and new collectives to operate in the city provided they register.  The collectives will have to be able to prove to the city that they were open prior to June 30, 2011. The city has stated that an additional ordinance with more information on the registration process will be available on August 9, 2011. (We will post it here once we obtain it, so check back). One of the restrictions is that collectives will have to operate in certain zoning areas.  This probably means industrial and/or commercial but not residential.  They will be performing background checks.  There does not appear to be a cap at this time.  It does appear that the city will institute a “1000 foot rule” which means your collective would not be able to be within 1000 feet of a school, park, church, residential area or another collective. More to come.