Raid on Mendocino’s Pot Co-Op Northstone Instills Fear That “No One is Safe”; Interview With County Supervisor; Federal Memo on Enforcement Criteria

Yesterday on PBS NewsHour, KQED and California Watch’s Michael Montgomery took a look at the fallout over the DEA raid of Northstone Organics, a county-sanctioned medical marijuana co-op in Mendocino. Watch the segment, which includes an interview with Cohen, below:

Indeed, these are anxious times for California pot suppliers and those who advocate for medical marijuana, which is legal under state law but remains prohibited under the federal Controlled Substances Act.

In October, the four U.S. Attorneys in California announced they would target not only medical marijuana dispensaries and growers, but also the owners of buildings where marijuana is sold.

The enforcement initiative appears to be getting results, as dozens of clinics have shut down in the state, including some in the Bay Area.

Advocates feel the Obama administration has gone back on its word to lay off California’s medical marijuana industry, established in 1996 under Proposition 215, which legalized medical cannabis growth and distribution. In 2009, Attorney General Eric Holder said the Justice Dept would reverse Bush administration police and no longer conduct raids on medical marijuana dispensaries.

From a Mar 18, 2009 New York Times report:

Attorney General Eric H. Holder Jr. on Wednesday outlined a shift in the enforcement of federal drug laws, saying the administration would effectively end the Bush administration’s frequent raids on distributors of medical marijuana.

Speaking with reporters, Mr. Holder provided few specifics but said the Justice Department’s enforcement policy would now be restricted to traffickers who falsely masqueraded as medical dispensaries and “use medical marijuana laws as a shield.”

However, KQED’s Michael Montgomery, who has done extensive reporting on the marijuana issue, says despite what Holder may have said publicly, Justice Dept. memos outlining enforcement policy only address informal waivers from prosecution for the terminally ill.

“The feds will not use limited resources to go after seriously ill people or their care providers in terms of medical marijuana,” says Montgomery. “But that’s the only thing they stated unambiguously in these memos. In terms of businesses, they never said they wouldn’t go after them.

“The problem for California is the industry has grown quite large. The categories, in terms of illnesses that allow you to get a medical marijuana recommendation are very wide. So most of the people getting medical marijuana in California are not terminally ill. If you look at the language the Justice Dept. continues to use, they talk about people with serious or terminal illnesses. Those are the people who get the informal waivers.”

A Feb 2011 memo (click here for full text), obtained by Montgomery, specifies “factors that all four California U.S. Attorneys Offices agree may render a particular marijuana case suitable for federal prosecution.” While the evidence against Northstone Organics is unknown, on the surface the co-op would seem to fall outside at least some of the criteria for prosecution set out by the federal government, such as production thresholds.

Yet, last month, the Drug Enforcement Agency raided Northstone, shocking pot advocates around the nation, as well as local officials who had worked extensively with Northstone’s owner, Matt Cohen, to come into compliance with a unique county permitting program under which marijuana businesses can operate. The program stipulates inspections and cultivation limits under a strict regulatory regime. In return, participants can grow up to 99 plants.

“That could be half-a-million dollars worth of marijuana at a modest wholesale price,” says Montgomery. He says some local growers criticize the county for setting the growth limit too high, thus arousing the wrath of the feds.

Cohen’s compliance with county rules, at least, did not protect him. “They came in guns blazing,” Cohen said of the raid. From the Ukiah Daily Journal:

The agents arrived at 6 a.m., handcuffed Cohen and his wife and stayed until about 2 p.m., taking 99 marijuana plants, computers and testing equipment, according to Cohen. He said the agents threatened to file federal charges against him, but made no arrests during the raid…

Michael Montgomery spoke in mid-October to Mendocino County Supervisor John McCowen, an avid defender of the county’s permitting program (called 9.3.1), about the raid and the effect it may have on a variety of social ills associated with illicit marijuana cultivation and sales. Here is an edited transcript:

What was original intent of program?

The original intent was to bring order out of chaos. We had a situation of total polarization between the medical marijuana community and the general community.

We had people growing as much marijuana as they could in residential areas without regard to the neighbors, community, the environment. There was no real effective way of separating out the people who were creating problems from the people who were not creating problems. So the 9.3.1 program was intended to do that. It did create an allowance for people to grow more than the 25 plant per parcel that was previously allowed, with a permit from the sheriff, with an inspection and in compliance with a long list of conditions designed to protect the environment and the community.

At the same time, as a tradeoff for going up to 99 plants, we were able to get protections written into the ordinance that hadn’t been there before, providing setbacks from the property line, setbacks from neighboring residents, that required that the plants not be visible from the public right of way or a publicly traveled road. And these are all things that now apply to anyone growing a single marijuana plant; they have to be in compliance.

So the effect of this is to greatly reduce the amount of neighborhood conflicts. The program has been very successful.

So in fact the program was controversial but mainly from some growers who thought it was too extreme.

The fears people had have not played out. A lawsuit was defeated. The program was found to be legal under California law. It’s still not accepted by a few diehards at either end of the spectrum, but for the great majority of people I think we’ve come up with something that is working.

This season you had significantly more growers joining up.

To me that’s a sign that the growers have confidence in the program. That if they work with law enforcement in an open and above-board way, law enforcement will reciprocate. What makes the program a success is not so much the numbers involved but the fact that we have reduced the neighborhood conflicts. Marijuana is not nearly as controversial as it used to be, and frankly we’ve got a lot of other issues we need to devote our attention to.

What impact has this had socially?

When marijuana was completely illegal or even quasi-illegal, people were very interested in being below the radar. They wouldn’t register to vote, they would put up high fences, have guard dogs. Even in some rural communities where marijuana cultivation was generally accepted people were really alienated from each other in lots of cases and certainly from the larger community.

With the advent of this program we’ve seen a lot of that start to change, to the degree that last year a murder was actually solved as a result of the confidence a grower had in a member of law enforcement who he had gotten acquainted with through the program. He felt comfortable reporting a murder that law enforcement didn’t yet know about. He and his attorney arranged for the murderer to surrender. That person eventually pled guilty to the charges. That’s a phone call that wouldn’t have been made a year ago.

How did you hear about the raid on Matt Cohen’s farm?

I received an email from the program administrator.

What did you do?

I really didn’t do anything. I was a little stunned. From the first day that I met Matt Cohen, he was the first marijuana advocate that I’d met who was strongly in favor of regulation, and he especially emphasized the need to prevent black-market diversion. That you need to have a system of accountability all the way through so you can prove to the greatest degree possible that you are not growing marijuana that’s going to wind up on the black market.

I’ve seen his processing operation and he is true to his word. I believe he can account for every ounce of marijuana that he grows and show you where it went. And it’s going to patients who have a physician recommendation.

What kind of a mood is there now among folks in the program?

There’s a lot of concern. People are wondering what’s behind this, what happens next, am I personally at risk? Because we do have a situation where we have an individual who is doing everything he can possible do to be as legal as they could with local and state law. Adhering strictly to the letter of the law all the way down the line.

So if the federal authorities are going to raid Matt Cohen, no one is safe. And of course that’s the reality of federal prohibition. As long as marijuana is federally illegal, there is a risk that anyone can be targeted by the feds.

Is it possible they went there not knowing he was in the program?

I have heard they were very interested in any documentation concerning the program, so that tends to imply that perhaps they were targeting the program. I know that there are highly placed federal enforcement officials who are involved in drug interdiction who really don’t’ like our program. So there is a potential that someone back in Washington made a decision that we want to go after this program. And if that was the intent where better to start than with Matt Cohen?

What could be the impact of this one raid?

I think the impact to the extent that it creates a ripple effect – whatever the intention of the federal authorities – will be to drive the production of medical marijuana back underground. And taken in concert with the other actions that have been accounted regarding dispensaries, like the IRS actions to disallow normal costs of operating – all of that together has the impact of making marijuana more illegal, more dangerous, more profitable for the black market operators.

I think the raid further endangers public safety. Our program, by bringing the production of medical marijuana above-ground into a strictly regulated program where it’s inspected by the sheriff, arguably tremendously increases public safety and environmental protection.

If the raid drives people out of the program and back underground, it will have the opposite effect.

What do you say to the idea that, look we’re enforcing the controlled substances act and we’re entitled to go after Matt Cohen?

That’s absolutely true, but I would hope they’d prioritize who they’re going after and why. I think there are plenty of growers out there who have no intention of complying with any system of regulation and who are growing on a large scale with no concern for the community, public safety, or environmental impacts. Why not start with those folks? And if you get all of them cleaned up, then maybe you can work your way down to someone like Matt Cohen.

Is it frustrating to see in possibly one fell swoop all of that threatened in the name of enforcing the law?

It is really frustrating. I didn’t start out as a medical marijuana advocate, I started out as a public safety advocate. I helped enact a ban of outdoor growing in the city of Ukiah, helped to repeal Measure G, which allowed anyone to have 25 pots for any reason, medical or otherwise. I’ve come into this regulation of marijuana through the 9.31 program really with the intent to limit the public safety impacts. And I think its working.

And now we have a situation apparently where the program is under attack, and I’m trying to understand what purpose they think this will serve.

I showed you excerpts from an internal US attorney’s document which outlines a statewide enforcement strategy on marijuana. Anything jump out at you from that document?

I’ve read the document. It has very detailed guidelines regarding the factors that would warrant federal prosecution. In the case of Matt Cohen, he doesn’t meet a single criteria, either the plant numbers or the guidelines that they identify.

The county interacts with federal law enforcement all the time. What’s the impact of this raid on that relationship?

I don’t think there will be a significant impact. I believe the sheriff’s office will continue to work with federal authorities. Certainly Full Court Press [a marijuana eradication and seizure operation conducted in August] was a great example of cooperation between federal state and local authorities. I’m hopeful that we can continue that program next year if we have the resources. I think expanding it to private property to eradicate every trespass growth that we can would be great. I don’t see this raid as threatening local-federal cooperation.

Do you trust the federal government at this point?

It’s not a question of trust, I’m just wondering what the intention was? Because if the intention was to go after people that are out of bounds, creating problems, I’m concerned that the raid on someone like Matt Cohen, who is legally as compliant as can be, sends the opposite message, and will have the effect of driving legitimate medical marijuana underground, further endangering public safety and the environment. I can’t believe that’s what we want to do.

As of now we intend to continue with the program. Matt Cohen was the strongest advocate for doing more in terms of tracking the marijuana that is produced to make sure we prevent black-market diversion. That’s one of the greatest ironies of this – he’s been the most insistent on tightening the program up.

Here is the full text of a February 2011 memo, obtained by Michael Montgomery, outlining US Attorneys’ guidelines for federal marijuana prosecution in California.

To: DEA, HIDTA, Federal task force partners in California for internal law enforcement use only. Not for public use or circulation

From: California United States Attorneys

This memorandum outlines factors that all four California U.S. Attorneys Offices (the USAOs) agree may render a particular marijuana case suitable for federal prosecution. Indefication of these factors is intended to assist federal, state and local law enforcement agencies in determining whether a particular marijuana case has significant potential for federal prosecution and conducting investigations in a manner that develops the best evidence to support federal prosecution (footnote 1). The USAOS will consider for federal prosecution cases investigated by federal, state or local law enforcement agencies that implicate federal interests as reflected in the factors. Cases investigated by federal agencies will generally be given priority over cases adopted from state or local investigations. The factors listed below are relevant to the USAOs consideration of whether a marijuana case should be prosecuted federally but the presence or absence of one or more of the factors will not guarantee or preclude federal prosecution in any case. In general the federal interest will be greater in prosecuting leaders and organizers of the criminal activity as opposed to lower level workers.

The memorandum is intended as prospective guidance only, is not intended to have the force of law and is not intended to, does not, and may not be relied on to create any right, privilege or benefit, substantive or procedural, enforceable by any person or entity against any type of the USAOs, DOJ or the United States.

(page 2)

1. Domestic distribution cases.

Federal prosecution of a case of domestic distribution of marijuana should generally involve at least 200 or more kilograms of marijuana and also include additional factors that reflect a clear federal interest in prosecution (Footnote 2—This guidance for domestic distribution cases does not apply to cases involving distribution within smuggling into a federal prison. 18 USC 1791). Typically the more marijuana above 200 kilograms the better the potential for federal prosecution. Domestic distribution cases involving quantities of marijuana below 200 kilograms should demonstrate an especially strong federal interest or should not be prosecuted with marijuana distribution as the sole federal charge. Set forth below is a non-exhaustive list of factors that USAOs believe indicate a federal interest in a domestic distribution case.

*Distribution by an individual or organization with provable ties to an international drug cartel or a poly-drug trafficking organization.

*Distribution of significant quantities to persons or organizations outside California.

*Distribution by individuals with significant prior criminal histories.

*Distribution by individuals with provable ties to a street gang that engages in drug trafficking involving violent conduct.

*Distribution for the purpose of funding other criminal activities.

*Distribution near protected locations or involving underage or vulnerable people (e.g. in violation of 21 USC 859 persons under 21, 860 near schools, playground and colleges, 861 employment of persons under 18).

*Distribution involving the use or presence of firearms or other dangerous weapons including cases that would support charges under 18 USC 924c.

*Distribution generating significant profits that are used or concealed in ways that would support charges of federal financial crimes such as tax evasion, money laundering or structuring. Note: Generation of significant profits alone generally will not be viewed as a factor weighing in favor of federal prosecution.

*Distribution in conjunction with other federal crimes involving violence or intimidation.

(Page 3)

2. Cultivation cases.

Federal prosecution of a marijuana case involving cultivation on non-federal or non-tribal land, indoor or outdoor, should generally involve at least 1,000 marijuana plants so that they quantity necessary to trigger the ten-year mandatory minimum sentence can be clearly proven and also include additional factors that reflect a clear federal interest in prosecution. Typically, the more marijuana above 1,000 plants, the better the potential for federal prosecution. Non-federal or non-tribal land cases involving quantities below 1,000 plants should demonstrate an especially strong federal interest or should not be prosecuted with marijuana cultivation as the sole federal charge. Federal prosecution of a marijuana case involving cultivation on federal or tribal land should generally involve at least 500 marijuana plants and also include additional factors that reflect a clear federal interest in prosecution. Cases on federal or tribal land involving quantities below 500 plants will be considered if they demonstrate a strong federal interest, if the cultivation has caused significant damage to federal or tribal lands or has occurred in an area of exclusive federal jurisdiction (Footnote 3– The USAOs will consider the totality of circumstances with respect to all marijuana plant quantities in these guidelines. For example, the presence of especially mature, large or robust plants will generally weigh in favor of prosecution while the presence of seedlings or immature plants will generally weigh against prosecution). Set forth below is a non-exhaustive list of factors that the USAOs believe indicate a federal interest that may justify federal prosecution of a marijuana case involving cultivation whether on federal, tribal or other lands.

*Cultivation causing significant environmental damage, risk to human health or interference with particularly sensitive land or significant recreational interests, ie damage to wilderness area or wildlife, danger to innocent families using a 8recreation area or use of toxic or dangerous chemicals.

Cultivation by an individual or organization with provable ties to an international drug cartel or poly-drug trafficking organization.

*Cultivation of significant quantities on behalf or persons or organizations outside California.

*Cultivation by individuals with significant prior criminal histories.

*Cultivation by individuals with provable ties to a street gang that engages in drug trafficking involving violent conduct.

*Cultivation for the purpose of funding other criminal activities.

(Page 4)

*Cultivation near protected locations or involving under-age or vulnerable people (eg in violation…

*Cultivation involving the use or presence of fire-arms, booby traps or other dangerous weapons including cases that would support charges under 18 USC 924c.

*Cultivation generating significant profits that are used or concealed in ways that would support charges for federal financial crimes such as tax evasion, money laundering or structuring. Note—g eneration of significant profits alone will not be viewed as a factor weighing in favor of federal prosecution.

*Cultivation in conjunction with other federal crimes involving violence or intimidation.

3. Dispensary cases.

Given California state law, prosecution of marijuana stores or “dispensaries” purporting to comply with state law face additional challenges. Federal prosecution of a case involving a marijuana store should generally involve a) provable sales through seizures or records of over 200 kilograms or 1000 plants per year. b)sales clearly in violation of state law, eg sales to persons without legitimate doctors’ recommendations, side-sales occurring outside of the store or shipping to persons outside of California (Note—selling for profit, though a violation of state law, typically alone will not alone satisfy this requirement), and c) additional factors that reflect a federal interest in prosecution. Set forth below is a non-exhaustive list of such additional factors. Nothing herein should be taken as a limitation on investigation by federal law enforcement to determine the existence of these factors. However, search warrants or other more intrusive investigative techniques directed as marijuana stores should be closely coordinated with the USAOs.

*Marijuana “inventory” obtained from cultivation on federal or tribal land>

*Targets involved in cultivation involved in cultivation or distribution outside of dispensary that merits federal prosecution based on consideration of factors set forth in sections 1 and 2 above.

*Targets using profits from dispensary to support other criminal activity.

*Store linked to physician providing marijuana recommendations without plausible legitimate justification, eg doctor on site providing recommendation with no on-site examinations or legitimate medical procedures.

*Targets have significant prior criminal histories.

*Targets have provable ties to a street gang that engages in drug trafficking involving violent conduct.

*Store operations involve the use or presence or firearms or other dangerous weapons including cases that would support charges under 18 USC 924.

(Page 5)

*Store generates significant profits that are used/concealed in ways that would support charges for federal financial crimes such as tax evasion, money laundering or structuring. Note–generation of significant profits alone generally will not be viewed as a factor weighing in favor of federal prosecution.

*Store operations in conjunction with other federal crimes involving violence or intimidation.

*Store employs minors under 18 and/or sells a significant portion of marijuana to minors under the age of 21 especially where evidence that minors aren’t using for medical purposes.

4. Civil forfeiture.

The USAOs general preference is to pursue forfeiture through criminal forfeiture or civil forfeiture filed in parallel with a criminal case. Nevertheless circumstances may arise in which civil forfeiture alone is the best option. Those cases will generally involve one or more of the following:

*Significant forfeitable assets clearly traceable to marijuana trafficking in violation of federal criminal law that would merit federal prosecution based on consideration of factors set forth in sections 1-3 above.

*Significant forfeitable assets clearly traceable to non-marijuana related violations of federal law such as structuring or money-laundering. Large scale “medical marijuana” cultivation operations that 1) are operating in violation of state law 2)involve real property that has been the subject of a warning letter or similar prior notice or 3) involve real property that has been the subject of a prior forfeiture proceeding arising from marijuana cultivation or a property owner who has been a claimant in such proceedings or individual targets not subject to criminal prosecution eg fugitives or persons whose involvement in marijuana trafficking is too marginal to justify criminal prosecution including off-site land lords and non-resident owners falsely claiming ignorance of tenant’s marijuana trafficking.

Author

Jon Brooks

Jon Brooks writes mostly on film for KQED Arts. He is also an online editor and writer for KQED's daily news blog, News Fix. Jon is a playwright whose work has been produced in San Francisco, New York, Italy, and around the U.S.

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