Think it has been easy for RIGH to operate in California the past 18 months? As mentioned, the political landscape is changing, but just as recently as December a well-known, and respected California businessman will be serving 5 years in prison for operating a legal pot business. And we...worry about the little things, like filing business papers, or larger things like communicating with shareholders and filing financials. Prison folks! For making money legally in California...
By Michael Fitzgerald, MAP Inc.
December 15, 2013
FEDS ON MEDICAL POT: HAZY AT BEST
"Next in line for the dustbin of history: federal marijuana law, as applied to the case of Stockton's Matthew Davies.
On Friday, a federal judge sentenced Davies, "a working man, a married father of two young children, with no criminal record" to five years in prison, a plea agreement.
His crime: growing and selling medical marijuana in Stockton and Sacramento.
"My entire family has already been scarred by this," Davies wrote prosecutors. "It will be the ultimate struggle to keep our family together."
Of course, all defendants sing the victim song. Nobody forced Davies into the legally treacherous chasm between state and federal marijuana law.
But, prosecutors say, Davies ran seven pot dispensaries, some illegal even under state law, and two grow warehouses, one immense and sophisticated, all to make a killing, not to dispense medical cannabis to sufferers as envisioned by state law.
( Davies opened an eighth dispensary in Manteca. City officials closed it down within days. )
"Davies entered the marijuana business to make money, not to treat seriously ill patients," U.S. Attorney Benjamin B. Wagner wrote to Davies' attorney.
Toward that end, Davies disguised for-profit dispensaries as non-profits; sometimes concealed his participation; and laundered money, Wagner said.
His operation was so big and sketchy that the sentencing judge balked at the lenient plea deal, Wagner said.
Lenient? Davies also forfeits $100,000. On top of that, he said he spent $250,000 on legal fees.
That's a travesty, said his attorney, Elliot R. Peters.
So Davies made money, asked Peters. Is that criminal?
"They've always said the problem with what Matt did, he approached it like a business," Peters said. "Like it would have been better if he'd been selling it out of the back of a Volkswagen bus with a 9mm under his seat."
In fact, Davies ran the sort of shop Uncle Sam should appreciate, Peters said. One that beats cartels.
Back to square one. Davies broke federal law by growing and selling pot. But who got hurt and how? Where is the harm to society?
An Aug. 29 memo from Deputy Attorney General James M. Cole outlines the sort of dispensary violations worthy of federal prosecution. They are:
Selling marijuana to minors; funding criminal enterprises, gangs or cartels; moving pot to states that outlaw it; providing cover for illegal drug sales or other crime; using violence or firearms in grow operations; conducing to "drugged driving;" or growing marijuana on public lands.
Davies' operation did none of the above, said Peters.
"I think the criminality is just a bureaucratic mentality of 'Here's a statute, he violated the statute, it carries a mandatory minimum, we'll enforce the law without thinking very hard about it,' " Peters said.
Furthermore, the Cole memo says if states legalize marijuana, and impose tight regulations, the feds should save their resources and leave enforcement to the states.
Some believe the feds went rogue in Davies' case.
Wagner responded that Davies' case was largely a done deal by the time that memo came out.
Second, while California legalized medical pot, its enforcement is anything but tight. It is a "free-for-all." Uncle Sam must patrol for chaos, Wagner said.
"Without an effective state regulatory system, there's no way of insuring that marijuana businesses will not engage in conduct that does implicate federal law enforcement," Wagner said.
Isn't that "guilty until proven innocent?"
"He violated the Controlled Substances Act, which is my job to enforce," Wagner said.
Uncle Sam didn't go looking for Davies, Wagner added. The pot operation came to light when Stockton police responded to a burglary at the grow warehouse. Davies fell in Uncle Sam's lap.
The Davies case is a painful example of the crazy disconnect between state and federal marijuana laws. Congress ought to hear the will of the people and change federal law.
Until it does, leaders such as state Attorney General Kamala Harris ought to stand up for the people of California and laws protecting medical marijuana. Those laws are the future.
"I don't disagree that these are changing times," Wagner said. "We're trying to balance federal priorities and the changing facts on the ground. That is not easy in cases like this."
Understood. Yet the fact remains that Davies must spend at least 41/2 years in prison after pleading guilty to 10 counts of dubious federal laws against growing, possession and distribution of a substance less harmful than margarine.
"My kids will be lucky to see me two times a month for four hours at a time for the next five years," Davies wrote."
