Federal medical marijuana memo stirs angst in industry

Just another reason you need a good criminal defense attorney like Michael McCabe.

In October 2009, medical marijuana advocates celebrated a U.S. Department of Justice memo declaring that federal authorities wouldn’t target the legal use of medicinal pot in states where it is permitted.

The memo from Deputy U.S. Attorney General David Ogden was credited with accelerating a California medical marijuana boom, including a proliferation of dispensaries that now handle more than $1 billion in pot transactions.

But last month brought a new memo from another deputy attorney general, James Cole. And this time, it is stirring industry fears of federal raids on pot dispensaries and sweeping crackdowns on large-scale medical pot cultivation.

Cole asserted in the June 29 memo that state laws “are not a defense” from federal prosecution, saying, “Congress has determined that marijuana is a dangerous drug” – and that distributing it “is a serious crime.”

Justice Department officials said the memo offered “guidance” for states permitting medical marijuana and didn’t mark a harsher shift in federal policy. But it was a clear signal of the government’s concern about a move toward industrial-scale operations that would generate millions of dollars in revenue.

The memo came off as a threat to Steve DeAngelo, director of the Harborside Health Center, California’s largest medical marijuana provider. He charged that President Barack Obama and Attorney General Eric Holder are turning their backs on medical users and imperiling the distribution of marijuana as medicine.

“I can’t imagine why the Obama administration wants patients to obtain their medicine from a criminal market rather from a licensed and regulated system of distribution,” said DeAngelo, whose Oakland dispensary has 50,000 clients and handles more than $22 million in annual transactions. “I just can’t imagine them following through on their position.”

Advocates and legal observers are split on whether the concern expressed in the Cole memo over the “scope of commercial cultivation and use of marijuana for purported medical purposes” signals raids on pot stores. But many say it is a backlash against cities and entrepreneurs trying to cash in on the medicinal pot trade.

The city of Oakland is still exploring a plan to regulate and tax expansive marijuana cultivation, despite warnings by federal authorities that they wouldn’t tolerate earlier city efforts to sanction cavernous indoor marijuana farms.