Obama Administration's War on Medical Marijuana Continues to Escalate

The Bureau of Alcohol, Tobacco and Firearms announced that medical marijuana patients are prohibited from owning firearms, a policy that could subject otherwise law-abiding patients to draconian sentencing enhancements. Rumor has it that federal agents in Michigan are using patient lists to cross-match against gun sales databases -- unconfirmed as yet, but in line with prior Michigan developments.

The last bank in Colorado to openly do business with the medical marijuana industry has announced that it will no longer do so. The banks have caved in to federal demands they do extra monitoring and reporting on their customers in the marijuana business, fearing the feds could have worse in mind for them than they've stated. Dispensaries throughout the state are preparing to go cash-only.

The IRS announced that medical marijuana dispensaries, which the federal government does not recognize as nonprofits even when their states do, cannot deduct the major costs of doing business on their tax returns -- rent, payroll, etc. -- a move that could make collective provision of marijuana to patients difficult to continue. Harborside Health Center in Oakland, a major and well-respected leader in the field (our Scott Morgan has dubbed Harborside "The Best Place in the World to Buy Marijuana"), paid millions in taxes but owes millions more. They say they'll have to stop operating if the appeals process fails to reverse the decision.

Tomorrow California US Attorneys say they'll announce a new "strategy," including forfeiture actions and maybe worse against property owners who rent buildings or land to medical marijuana businesses. It's not a completely new threat, but it is sounding like an enlarged one.

On that last item, Dale Gieringer of California NORML has pointed out that the news while bad may not be completely bad. Two paragraphs from an article today in California Watch discuss a February memorandum in which federal prosecutors in California indicate what types of businesses are "more likely" to be prosecuted. This could at least provide some guidance if not assurance to providers as to what they can probably do without ending up behind bars:

The memorandum sets thresholds that make investigations more likely to be prosecuted. Those include distributors caught with at least 200 kilograms of marijuana, including distribution near schools, playgrounds and colleges; cultivators with gardens of at least 1,000 plants that are not on federal land and at least 500 plants on federal or tribal land or where there is significant damage; and dispensaries that sell more than 200 kilograms or 1,000 plants annually.

Prosecutors also are looking for provable ties to international drug-trafficking organizations or instances in which marijuana is distributed outside of California. The memorandum also outlines guidelines for civil forfeitures for those who indirectly participate – like landlords or property owners – in marijuana operations.

That's not enough to rest easy, and it's not clear how workable a distribution system could be left if prosecutors succeed in implementing such a restrictive standard. The part about "distribution near schools, playgrounds and colleges" depends critically on how the word "near" is interpreted. If they go with the senseless but oft-legislated 1,000-foot rule, that could eliminate nearly all locations within a lot of cities. But perhaps it's better than nothing.

Oaksterdam's Richard Lee of Prop 19 fame pointed out another, only slightly comforting bright side, in the IRS side of things, Monday in the Bay Citizen:

Lee said Harborside's battle with the IRS shows that the medical marijuana industry is making progress.

"At least it's better to be bankrupted than incarcerated," he said.

Speaking of incarceration, another way the Obama administration has let down medical marijuana advocates is letting prosecutors continue with cases brought against medical marijuana providers from before Obama became president who would probably not have been targeted for prosecution under the guidelines his DOJ announced. Mollie Fry and Dale Schafer are the most recent to start prison terms, and their are others left behind, including my friend Bryan Epis.

Having laid all that out, I should say that I don't see any of this as cause to despair or give up -- and I hope that people don't give up. It's just a challenge facing the issue and the movement. With popular opinion strongly on the side of medical marijuana in some form, and moving strongly toward support for actual legalization of marijuana, it's only a matter of time before the bureaucratic and prosecutorial campaigns to squash medical marijuana retreat into the past. The question is how much harm will be done -- how many lives will the government needlessly ruin -- in the meanwhile.