Bloomberg News

Santa Barbara Pot Shops Targeted With Forfeiture Suits

May 03, 2012

Three buildings housing purported medical marijuana stores or farms in Santa Barbara County, California, were targeted with forfeiture lawsuits by U.S. authorities for allegedly violating federal law.

Lawsuits were filed yesterday in federal court in Los Angeles against two buildings, one in Santa Barbara and one in Summerland, California, used for medical marijuana stores, and a commercial building in Santa Barbara used to grow marijuana indoors. The lawsuits require the owners to explain in court why their properties shouldn’t be forfeited.

“We’ve developed a multiprong approach for dealing with the widespread problem of commercial marijuana operations,” Thom Mrozek, a spokesman for the U.S. attorney’s office in Los Angeles, said in a telephone interview.

The federal government has brought a small number of criminal cases, sent letters in select areas warning operators and landlords, and filed 10 lawsuits against the most “egregious” examples of landlords allowing marijuana dispensaries to operate, Mrozek said.

The forfeiture lawsuits allege that the Santa Barbara operations violate federal law, which doesn’t allow cultivation, possession or trafficking of marijuana. The stores also violate California law because they aren’t nonprofit businesses and aren’t primary caregivers, Mrozek said.

Billion-Dollar Industry

Federal prosecutors in California said last year they were using property seizures and criminal charges to crack down on California’s billion-dollar commercial medical marijuana industry.

The top U.S. prosecutors in Los Angeles, San Francisco, San Diego and Sacramento said at the time that they were responding to an “explosive” growth in the state’s marijuana trade, which they said had corrupted the intent of a 1996 referendum that made California the first state to permit marijuana use for medical purposes.

The operator of one of the Santa Barbara dispensaries, Pacific Coast Caregivers, told police in 2010 that estimated sales were about $1.2 million a year, according to an affidavit from a Drug Enforcement Administration investigator in support of a search warrant for the business. Police arrested the man at the time on narcotics charges, according to the affidavit.

‘Marijuana for Profit’

“Many of these stores seek protection under California’s ‘medical marijuana’ laws but, in fact, operate entirely to sell marijuana for profit,” according to the affidavit. “California law does not authorize ‘any individual or group to cultivate or distribute marijuana for profit.’”

A call to Pacific Coast Caregivers for comment on the lawsuit wasn’t answered.

The new cases are U.S. v. real property located at 305 E. Haley, Santa Barbara, 12-3790, U.S. v. real property located at 331 N. Milpas, Santa Barbara, 12-3791, U.S. v. real property located at 2173 Ortega Hill Road, Summerland, 12-3792, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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