Journal of the California Cannabis Research Medical
Spurt of Federal Medical MJ
Cases Follows Raich Ruling
Three San Francisco dispensaries closed--
DEA claims to target
By Dale Gieringer
"Fear and Loathing at the Dispensary"
Pen and ink drawing by John Denney
In the wake of the Supreme Court ruling handed down June 6, California
has seen a resumption of raids on medical cannabis dispensaries. So
far, the DEA has been working in cooperation with local police, who
have targeted operations accused of abusing local regulations. Federal
authorities insist they aren’t interested in pursuing medical
marijuana patients, but only organized criminal enterprises.
In San Francisco on June 22, the DEA raided three medical marijuana dispensaries
and arrested 19 defendants, all but one Asian-Americans. Federal agents searched
24 homes and businesses, located 10 indoor grow sites, and seized over 9,000
plants. The defendants were all indicted for conspiracy to cultivate and distribute
over 1,000 marijuana plants. In addition, three were indicted for sales of ecstasy,
and two for money laundering. There are also allegations of international cash
smuggling. The three closed dispensaries were Herbal Relief Center at 1545 Ocean
Ave., Medicinal Herbal Remedy at 1939 Ocean Ave., and Sunset Medicinal Resource
Center at 445 Judah St.
Federal spokesmen denied attacking medical marijuana per se. “It’s
not an attack on medical marijuana,” one law enforcement official told
the San Francisco Chronicle, “This is an organized crime group that
is using the whole pot-club thing as a front.”
Supporters say that the defendants were mostly involved in medical
marijuana. One of them, Van Nguyen, was well known as the director
of the first Asian-
American dispensary, the Herbal Relief Center, which was known to give
away cannabis to
needy patients. “I am not a profiteer, I don’t know what money laundering
is,” Nguyen told the SF Bay Guardian, “This is what I believe in.
I’m not going away.” But he has not yet turned himself in.
Lawyers for the defendants include former S.F. District Attorney Terence
Hallinan, who contends that the prosecution reflects an anti-Asian
Eleven of the defendants had been arrested for cultivation by local
police in the course of six raids in San Francisco, Oakland, and Daly
City, over the past two years. They had avoided prosecution on grounds
of Prop 215.
The organization had attracted complaints from some neighbors by
opening what was the third dispensary in the Ingleside district.
about over-concentration of clubs were a major factor in San Francisco’s
recent decision to impose a moratorium on new facilities.
On the same day as the San Francisco raids, federal officials in
Sacramento arrested Marion Fry, MD, and her husband, attorney Dale
Schafer, on a sealed
indictment. Fry and Schafer, who run a medical cannabis center in El Dorado
County, had been under investigation since 2001, when DEA agents raided
their office. Although Fry was protected from prosecution for recommending
under the federal court Conant decision, a medical marijuana garden was
discovered on the couple’s property, rendering them liable
to federal prosecution.
Fry, who is also a cancer patient, contended the garden was legal
under Prop. 215. However, the Supreme Court’s Raich decision ruled out any defense
based on personal medical use, clearing the path for the couple’s
The DEA assisted the Sacramento County sheriff in closing another
medical cannabis dispensary, Alternative Specialties, on Folsom Blvd.
owner, Wayne Fowler, had a previous felony conviction for embezzling $5 million
while a state employee, and was also charged with illegal possession of weapons.
Sacramento County Sheriff’s Sgt. R.L. Davis said Fowler was raided “because
of who he is and because he was definitely operating without a business
Other dispensaries are continuing to operate in Sacramento County, which has
a moratorium on new facilities pending further regulations. Alternative Specialties
had been the most conspicuous, located on a major highway with a big pot-leaf
sign and live plants visible through the window.
In San Bernardino County, the sheriff’s department moved to
shut down the county’s only dispensary just two days after the
Supreme Court decision with no federal assistance at all. The dispensary,
California Alternative Caregivers Christian Alliance in Big Bear Lake,
was busted after selling eight ounces of medicine to an undercover
sheriff’s deputy with a physician’s recommendation. San
Bernardino District Attorney James Hosking has made it known that the
county regards sales of medical marijuana to be illegal, although cooperative
gardens are allowed under the law.
In San Diego, police arrested a medical cannabis dispensary owner,
Jon Sullivan, at his home. Sullivan was arrested on account of a
complaint, not out of any investigation of his two dispensaries, which
operate under the name “Triple Holistic Chronic.” Police
seized more that a pound of marijuana and patient records that were
stored at his home.
Several other dispensaries remain in operation in San Diego, which
so far has no ordinance regulating their presence. Three days after
the Supreme Court decision, the San Diego grand jury rebuked the
county for ignoring the needs of medical marijuana patients and
urged it to
take “ all possible action” to promote access for the
Another major medical cannabis operation, Compassionate Caregivers,
closed several of its outlets after becoming embroiled in a federal
IRS investigation. Their troubles began last May, when Los Angeles
police raided their West Hollywood outlet, confiscating over $300,000
cash and hundreds of pounds of product. Following the Supreme Court
decision, Compassionate Caregivers suspended its business, including
seven outlets from Ukiah to San Diego. They have since re-opened in
Oakland, San Francisco, and Ukiah.
United Medical Caregivers Clinic of Ukiah and Los Angeles, voluntarily
closed doors after the Raich decision. The move followed another LAPD
raid last March, which resulted in seizure of $180,000 in cash and
200 pounds of product. No charges have been filed.
The IRS is said to be considering assessing operators for back taxes.
Although medical cannabis businesses say they pay IRS taxes, the IRS
is claiming that they cannot deduct the expenses of product purchased
from growers unless they file 1099 forms for them. This presents an
irresolvable dilemma to the dispensaries, since they need to assure
anonymity to their growers in order to protect them from federal cultivation
In other federal cases, US District Court Judge Charles Breyer sentenced
Robert Schmidt to 41 months in prison for cultivation of marijuana.
Schmidt, who operated the Genesis 1:29 cannabis center in Sonoma County,
had been arrested in 2002 while growing over 3,400 plants near Sebastopol.
He pled guilty in 2003, but his sentencing was put on hold pending
the Supreme Court decision. Invoking the recent Booker ruling, which
gives judges greater flexibility in sentencing, Breyer granted Schmidt
a two-point downward departure, and dropped 10 months from his sentence
because he was ineligible for a prison drug treatment program.
Breyer has ordered the government to return a sword collection
and other property of Schmidt’s confiscated at the time
of his bust. As we go to press this issue is unresolved and Schmidt
Post-Raich Federal Cases
Merced —Dustin Costa (see story on following page).
El Dorado County —Mollie Fry, MD, and attorney Dale Schafer,
her husband, indicted June 22 for marijuana found on their premises
by DEA in September 2001. Their medical marijuana clinic in Cool,
California had seen 6,000 patients.
Sacramento —Louis Wayne Fowler, director of Alternative Specialities
dispensary, arrested July 7, charged by feds following raid by
Sacramento County Sheriff that uncovered two indoor gardens with
800 plants. Sheriffs say Fowler had a criminal record and failed
for a business license. Charged for manufacture of marijuana and
illegal possession of weapons.
Modesto —Thunder Rector. Arrested by DEA July 18 with two
others on charges stemming from a raid on his property by Stanislaus
sheriffs, who discovered a quantity of marijuana there. Rector,
who has been diagnosed as bipolar, was growing for patients at
Tree, a San Francisco dispensary formerly run by his wife, Rayleen.
He was imprisoned for more than two months before his family raised
funds to arrange his release, which is expected in mid-October.
He suffered as a result of being denied Marinol, according to his
Kern County —Joe Fortt, 42, director of American Kenpo Kungfu
School of Public Health, arrested July 20 for cultivating over 2,000
plants at three different locations. Charged with conspiracy to distribute
and possess more than 1,000 plants (10 year mandatory minimum). On
Sept. 8 James Holland was arrested along with two associates in a raid
on the Free and Easy cannabis dispensary in Bakersfield. Kern County
sheriffs summoned the DEA after being called to investigate a robbery
at the facility. Police found plants growing at Holland’s
home plus 20 lbs of marijuana, and firearms.
Holland’s record reportedly includes a felony that makes
it illegal for him to possess the weapons that were found in
have described Holland as friendly and attentive. He is being
held in federal prison in Fresno, along with Dustin Costa and Joe Fortt,
as we go to press in mid-October.