Patients for Medical Marijuana

Banking Problems Could Kill Medical Marijuana In Colorado

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By Steve Elliott

Colorado medical marijuana business owners are desperately writing letters to every bank in the country asking if they can please, oh please, just have a bank account.

About 150 dispensary owners across the state are looking for banks that will take their accounts, said Tanya Garduno, president of the Colorado Springs Medical Cannabis Council and owner of Medical Cannabis Center, reports Monica Mendoza at InsuranceNewsNet.
The medical marijuana industry has already survived regulations, licensing, security and thick stacks of almost impenetrable rules and legalese.

But the banking issue “could be the deal breaker,” Garduno said. “We have to account for everything — sales, patient lists — trying to put this together with no bank could really kill us.”

The last bank in Colorado to openly welcome dispensaries’ business — the Colorado Springs State Bank — sent notice to the shops almost two months ago that they had until the end of September to clear out their accounts. That ban is owned by parent company Herring Bank, based in Texas.
“Everyone is trying to make it work on a cash basis,” Garduno said. “It’s going to be a funky next three months. I’m sure there will be folks that will shut down.”
Medical marijuana businesses in Colorado Springs have generated about $23 million in sales and contributed $580,533 in sales taxes so far this year. That’s a 52 percent increase over last year’s numbers, and a sign that the industry continues to grow.
But most bankers won’t touch medical marijuana dispensaries with a 10-foot pole.
Banks fear federal charges of money laundering and drug trafficking. While use and sale of medical marijuana are legal in Colorado, the federal government does not recognize any legal use for cannabis.
The Federal Deposit Insurance Corporation (FDIC), one of three banking regulators, hasn’t issued guidance for banks doing business with medical marijuana dispensaries. But federal law does require banks to report “suspicious activity.”
And in June, U.S. Deputy Attorney General James Cole issued a memo to U.S. Attorneys in medical marijuana states saying “Persons who are in the business of cultivating, selling or distributing marijuana, and those who knowingly facilitate such activities, are in violation of the Controlled Substances Act, regardless of state law.”
Colorado dispensary owners are planning to fight.
They plan to push for changes in federal law to take marijuana off Schedule I, which officially means it has no accepted medical uses, a high potential for abuse and addiction, and is too dangerous to use even under medical supervision — you know, like heroin. (Even cocaine and methamphetamine are considered by the U.S. federal government to be Schedule II drugs — officially “less dangerous” than marijuana.)
The dispensary owners and supporters want changes in banking rules that would allow banks to work with medical marijuana businesses without fear of conflicting with federal regulations.
And when the Colorado Legislature goes into session in January, they will push for a change in state law that would allow them to open their own bank, one that does not require federal insurance.
“There is a slight chance they will pass,” Black said. “But, I think we are knocking at the door.”
Without bank accounts, dispensary owners don’t have access to ATM machines and are paying bills in cash or are buying prepaid credit cards.
The dispensaries will be begging for a bank until federal laws change, according to Garduno.
“We need to cut off the short term bleeding,” Garduno said. “We will call every bank in the country to find a bank to give us a shot.”

Medical Marijuana Update

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So much is going on in the world of medical marijuana that we cannot adequately cover it all through news briefs and the occasional feature article. The news briefs and feature articles will, of course, continue, but beginning now, we will also include a weekly medical marijuana update at least noting all those stories we are unable to cover more comprehensively. This first update will itself be updated until the next Drug War Chronicle is published on Thursday, then the updates will appear as a regular weekly feature. Here we go:


On Wednesday, the governors of two medical marijuana states, Christine Gregoire (D) of Washington and Lincoln Chafee (I) of Rhode Island, called on the Obama administration to reschedule marijuana. The next day, Vermont Gov. Peter Shumlin (D) said he would join them, but that same day, Nevada Gov. Brian Sandoval (R) said he would not.


As of the end of November, the US Attorney’s Office in San Diego reportedthat more than 60% of the 222 dispensaries in the region have closed their doors since it began sending threat letters in October to the outlets and their landlords. That’s 139 dispensaries gone in far Southern California, and the feds said they expected another 20 or so to close in the next two weeks.

On Monday, a federal judge in San Francisco declined to issue a temporary injunction blocking a federal crackdown on dispensaries in the Bay Area. US Attorney Melinda Haag had ordered those clubs to close, because they were too close to schools on parks. Two of the targeted dispensaries, San Francisco’s Divinity Tree and Medithrive, have already shut down to avoid criminal prosecution or seizure of their properties. A third, the Marin Alliance for Medical Marijuana in Fairfax, may be about to follow (see below).

Also on Monday, the last dispensary in the Stockton area shut down after receiving one of those October threat letters from federal prosecutors. County officials had banned dispensaries. One other dispensary shut down in October, and two more are on hold as city officials await clarification from state and federal authorities.

Also on Monday, the city of Novato voted to renew its expiring moratorium on dispensaries for another year and said city staffers would move to shut down two dispensaries operating in violation of city zoning ordinances. The moratorium does not apply to the two dispensaries because they were grandfathered in, but staffers said they are prohibited under city zoning rules, which do not name marijuana sales as an allowed use.

Also on Monday, the Amador County Board of Supervisors temporarily banned outdoor medical marijuana grows in the wake of a September killing during the attempted robbery of a medical marijuana grow. A task force drafting regulations for outdoor grows will meet later this month. Amador County Counsel Gregory Gillott said Fresno, El Dorado, Glenn and Lassen counties all have similar bans on outdoor growing.

A Marin County judge Friday declined to quash an eviction order aimed at closing the Marin Alliance for Medical Marijuana dispensary in Fairfax. The Marin Alliance is the longest operating dispensary in the state, but it could be doomed after being targeted by federal prosecutors in October. Founder and operator Lynette Shaw has until December 9 to answer the ruling and request a trial, but said this week she wasn’t sure she will stay open.

Also on Friday, the Orange County Sheriff’s Department said that any sales of medical marijuana are illegal. After raids last month that targeted a half-dozen dispensaries and more than a dozen other locations and persons, the department said Proposition 19 and laws passed to regulate medical marijuana in the state “do not authorize sales of marijuana.”

Also on Friday, Los Angeles City Attorney Carmen Trutanich announced that his office is targeting nine dispensaries to be shut down because they’re within 600 feet of a school. He said he would seek $2,500 a day penalties if they stay open while being sued. Meanwhile the city reports that 372 marijuana businesses had filed to begin paying a city business tax by the October 31 deadline. An unknown number had not filed, but city officials said there could be as many as 500 dispensaries in the city, down from a peak of 850.


The Committee for Compassionate Medicine, which is seeking to put a medical marijuana initiative on the ballot next year, announced Friday that it had had handed in more than 74,000 signatures and planned on handing in another 10,000 by next week’s deadline. They need 68,911 valid voter signatures to make the ballot, so even if they get that additional 10,000, it’s still going to be a very close call, given that some sizeable fraction of signatures gathered will be found to be invalid.


An Oakland County circuit court judge Wednesday threw out a lawsuit filed by the ACLU and two medical marijuana patients against the cities of Birmingham and Bloomfield Hills, which had passed ordinances saying it is unlawful for anyone to engage in an activity contrary to state, local, or federal law. The judge dismissed the suit, saying the plaintiffs had not been charged with any crimes. The ACLU and the plaintiffs had hoped to force a ruling on whether state and local law enforcement had to obey the Michigan Medical Marijuana Act, but they didn’t get it.

On Thursday, two Oakland County dispensaries were raided by the Oakland County Narcotics Enforcement Team. Police arrested three people at one dispensary and four at the other and seized a combined five pounds of medical marijuana and three pounds of edibles. No charges have been filed yet.

New Jersey

A Rutgers-Eagleton poll released November 30 found overwhelming Garden State support for medical marijuana and high levels of support for marijuana law reform as well. A whopping 86% of respondents supported the availability of medical marijuana, while 60% thought penalties for pot use should be relaxed, just over half didn’t think pot possession should not be a crime, and one-third would completely legalize its sale and use.

The poll was released just a day after Gov. Chris Christie (R) announced that he had appointed a law enforcement figure, retired State Police Lt. John O’Brien to oversee the program, which has yet to actually serve a single patient nearly three years after it was passed into law. The first strictly-regulated compassion centers are set to open next year.

The state Department of Health and Human Services last month finally published rules and regulations for the program, which were roundly denounced by the Coalition for Medical Marijuna—New Jersey, the state’s leading patient advocacy group.


At a Wednesday news conference at the state capitol in Madison, Rep. Mark Pocan (D-Madison) announced that he is introducing  LRB-2466, the Jackie Rickert Medical Marijuana Act (JRMMA), named after the wheelchair-bound patient, activist, and member of Is My Medicine Legal Yet, the state’s most prominent medical marijuana activist group.

Pocan and state Sen. Jon Erpenbach (D-Waunakee) will be the lead sponsors of the bill, which died without a committee vote last session. Activists in Wisconsin have been working for a decade to pass medical marijuana legislation. Whether it will happen this session, given the bitter political atmosphere and Republican nomination at the state house remains to be seen.

What Republican Presidential Candidates Say About Legalizing Marijuana

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Lucia Graves: Huffington Post
WASHINGTON — Fifty percent of Americans favor legalizing marijuana, according to a recently released Gallup poll. That number, up from just 36 percent in 2006, marks a record high and could have significant implications for candidates on the campaign trail, advocates say.

Republican presidential candidate Gary Johnson has already come out in favor of legalizing marijuana, announcing on Wednesday that he would even consider issuing a full presidential pardon for anyone serving a prison sentence for a nonviolent marijuana crime. Such pardons are part of what he envisions as a broader “rational drug policy.”

“Pot smokers may be the largest untapped voting bloc in the country,” he said in an interview with Outside Magazine. “A hundred million Americans have smoked marijuana. You think they want to be considered criminals?”

Though Johnson has been excluded from recent GOP debates and polls show he garners less than 1 percent of the national vote, recent surveys suggest that, if current trends persist, legalization of marijuana could indeed become a hot-button topic by election 2016.

Support for legalization is as high as 62 percent among Americans under the age of 30, and Gallup has found that Americans are especially likely to favor legalizing marijuana for medicinal purposes. According to a Gallup survey last year, 70 percent favored making it legal for doctors to prescribe marijuana to reduce pain and suffering.

What’s more, Republicans could exploit pot advocates’ anger at President Barack Obama, who as a candidate promised to maintain a hands-off approach toward pot clinics adhering to state law. At a 2007 town hall meeting in Manchester, N.H., Obama said raiding patients who use marijuana for medicinal purposes “makes no sense.” At another town hall in Nashua, N.H., he said the Justice Department prosecuting medical marijuana users was “not a good use of our resources.” Yet the number of Justice Department raids on marijuana dispensaries has continued to rise.

“The fact that presidential candidates are now actively pointing out the need to end marijuana prohibition, combined with the new Gallup poll showing that more Americans support legalization than oppose it, shows that the time for reform has arrived,” said Tom Angell, spokesman for the legalization advocacy group Law Enforcement Against Prohibition, in an email to HuffPost.

With so many Americans in support of legalization, how long can the rest of the Republican presidential field stay silent on the issue? HuffPost has compiled a slideshow highlighting GOP candidates’ positions.

Rhode Island scraps Medical Marijuana

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Rhode Island: Governor Lincoln Chafee scrapped the plan for fear it was illegal under federal law. “Federal injunctions, seizures, forfeitures, arrests and prosecutions will only hurt the patients and caregivers that our law was designed to protect,” the governor said in the statement late Thursday (9.29.2011). Rhode Island considered state run facilities called “compassionate centers” but will no longer pursue the plan in fear of federal involvement. Patients and caregivers will still be able to cultivate their own medicine but state run facilities will no longer be an option. There are currently around 2,500 licensed caregivers in the state.

California Medical Marijuana Dispensary Crack Down

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LOS ANGELES (KABC) — Federal prosecutors announced Friday the government would aggressively crack down on California medical marijuana dispensaries.

Federal officials say offenders are using the cover of medical marijuana to sell drugs through storefronts.

Officials are targeting dispensaries located near schools, playgrounds, parks and sports fields where children are likely to congregate.

Arrests and indictments in California have been made in recent days by federal officials.

As part of a coordinated effort by California’s four United States Attorneys, federal prosecutors in Los Angeles have taken a series of actions against illegal commercial marijuana operations, including a building in South Orange County that houses eight marijuana stores and a trafficking ring that sold marijuana at its San Fernando Valley storefront, and sent marijuana to customers as far away as New York state.

The actions announced Friday in the Central District of California include:

    • A criminal indictment that charges six people with marijuana trafficking that allegedly generated nearly $15 million in profits in only eight months
    • The filing of civil forfeiture lawsuits against three properties and a related seizure of more than $135,000 from the bank account of one property owner
    • Warning letters sent to the operators and landlords of 38 marijuana stores.

Haag said the move is not designed to clamp down on patients who grow their own marijuana for medical use. But dispensaries that were not part of the initial wave of warning letters “shouldn’t take any comfort,” she said. “They are illegal under federal law.”

The move comes a little more than two months after the Obama administration toughened its stand on medical marijuana. For two years before that, federal officials had indicated they would not move aggressively against dispensaries in compliance with laws in the 16 states where pot is legal for people with doctors’ recommendations.

According to the U.S. District Attorney’s Office in Los Angeles, all known marijuana stores in the following areas are being sent letters warning that their operations are in violation of federal law:

    • Orange County: Lake Forest, Dana Point, Laguna Hills, Laguna Niguel, and Rancho Santa Margarita
    • Riverside County: Murrieta, Wildomar, Temecula
    • Inland Empire: Pomona, Claremont, Upland, Montclair, Chino

According to a spokesman for the U.S. attorney, at this time no cities in Ventura County are being targeted. But he said this is an initial phase and more locations will likely be added at a later date. warning letters sent to the operators and landlords of 38 marijuana stores.

The Associated Press contributed to this report.

(Copyright ©2011 KABC-TV/DT. All Rights Reserved.)

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