California Marijuana

May 24, 2011

Medical Marijuana in California Struck By Yet Another Villain

Medical marijuana dispensaries in Los Angeles and elsewhere have more to fear than the Drug Enforcement Agency. Now our local businesses can even be shut down by the IRS.

The Internal Revenue Service has now made it procedure that these companies can no longer deduct the sales of marijuana from their federal taxes. They’re to follow a completely different set of rules than every other merchant in the U.S. Claiming these deductions for goods sold is the only way for them to do business.

The government continues to make it harder and harder for dispensaries and collectives to stay in business. Our Los Angeles medical marijuana attorneys understand that the local medical marijuana industry would just like to be treated like every other business on the block, following the same rules and regulations. Continuous hits from the government and Congress make that harder and harder every day.

As we recently reported on our Los Angeles Marijuana Lawyer Blog, dispensaries continuously get hit with financial burdens from greedy, money hungry government that has one goal, to put local companies out of business. In our recent post, a new bill was passed that now allows the city to tax marijuana businesses up to 10 percent. These taxes were allegedly going to be used to fund so-called essential city services such as emergency response, street maintenance, police, fire, pothole repair and other programs. What’s most alarming is that these companies already pay a 9.25 percent sales tax. This additional 10 percent tax is on top of the original 9.25.

These companies won’t have to fight alone. United States Congressman Pete Stark, (D-Fremont) recently introduced legislation that would amend the tax code. Dispensaries would be able to deduct the price of their product on their federal tax forms under his legislation.

“While unfair to these small business owners, the tax code also punishes the patients who rely on them for safe and reliable access to medical marijuana prescribed by a doctor,” Stark says.

Section 280E of the IRS code, passed in 1986, prohibits residents from deducting the “sale of illegal drugs” on their personal or business income tax forms. This law was not originally passed to affect marijuana, or the sales of, it was put into effect to punish those dealing cocaine.

The new bill, cosponsored by Rep. Dana Rohrabacher, (R-Huntington Beach), is referred to as “The Small Business Equity Tax of 2011”. This bill is a two-page report that details an exception to the current tax code. This report states that under the exception, “amounts paid or incurred in connection with the trade or business consisting of sales marijuana … intended for patients for medical purposes pursuant to the laws of a state” to be deducted from taxes.

Dispensaries around the nation, in states which allow the product of course, would just like to be treated the same as every other money-making company. It is the American dream, after all.

“A level playing field would be wonderful,” said Cathy Smith, one of the cofounders of HopeNet on Ninth Street. “Everyone else gets to take out deductions. [If the bill passes], I’ll go out and celebrate.”
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May 20, 2011

Government Fails to Reclassify Medical Marijuana in Los Angeles as it Remains in Heroin Category

By Cannabis Law Group

The U.S. Court of Appeals for the District of Colombia Circuit was handed a lawsuit yesterday from a coalition of advocacy groups and patients. The suit demanded that the Obama Administration recognize and react to a petition, now 9-years-old, that would have marijuana rescheduled under the Controlled Substance Act (CSA). Many believe that marijuana falls into the wrong category in this classification system.

The favor of ruling would reclassify medical marijuana in Los Angeles and elsewhere under federal law. Advocates are looking to eliminate differences in the state and federal laws.

Oftentimes federal law and state law conflict in medical marijuana cases. Our Los Angeles medical marijuana attorneys understand that various classifications of drugs come with different penalties if convicted of use or possession. Marijuana currently rests with drugs of a much higher class, such as cocaine and heroin. Meanwhile, it has been legalized for medical purposes in more than a dozen states and possession is typically a misdemeanor under various state laws.

In an effort to even out the playing field, Washington Governor Chris Gregoire suggests that states that currently allow medical marijuana request that the federal government reclassify the drug. If the Court of Appeals does indeed grant his request, other states that currently allow medical marijuana would be able to request the same.

The Coalition for Rescheduling Cannabis (CRC) would like federal courts to reflect that marijuana no longer satisfies the requirements of a Schedule I prohibited substance. They are urging that federal law reclassified the drug.

“Marijuana has accepted medical use in the United States, it has a lower abuse potential than drugs like heroin, methamphetamine, and cocaine, and it is safe for use under medical supervision. All of these characteristics are well-documented scientifically and legally. Federal law requires the Obama Administration to reclassify marijuana,” said According to Jon Gettman, coordinator of the CRC.

President Obama’s Administration has already received the petition and has had plenty of time to review it. The Coalition is now accusing the Administration of violating the Administrative Procedures Act. This Act requires a final action to be taken within a reasonable amount of time.

“The federal government’s strategy has been delay, delay, delay,” said Joe Elford, Chief Counsel of ASA and lead counsel on the writ. “It is far past time for the government to answer our rescheduling petition, but unfortunately we’ve been forced to go to court in order to get resolution.” The writ of mandamus filed accuses the government of unreasonable delay in violation of the Administrative Procedures Act.

Marijuana’s medical use is now accepted by 16 states:

-Alaska
-Arizona
-California
-Colorado
-Delaware
-Hawaii
-Maine
-Michigan
-Montana
-Nevada
-New Jersey
-New Mexico
-Oregon
-Rhode Island
-Vermont
-Washington
The advocate groups and patients are able to take this issue to the federal courts if they receive a formal rejection of the CRC petition.

“The Obama Administration’s refusal to act on this petition is an irresponsible stalling tactic; it denies us due process under the law and, more shamefully, it continues to deny countless patients a chance to use current law to seek legal access to marijuana for medical use,” said Gettman.

Currently, the CSA classifies drugs into various schedules. Marijuana is currently considered a Schedule I substance. This means that is has a high potential for abuse, has no currently accepted medical use in the United States and has a a lack of accepted safety for use under medical supervision.
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May 18, 2011

More Marijuana Grow Operations Busted in California

By Cannabis Law Group

Earlier this month, the Los Angeles County Sheriff’s office apprehended two suspects that were reportedly working with illegal marijuana cultivation operations in San Gabriel Valley. Authorities reportedly seized two caches of dried marijuana and plants that totaled nearly $3 million in street value, according to the Los Angeles Times.

A 30-year-old suspected member of the Chinese street gang known as Wah Ching and a 22-year-old were arrested by deputies from the Asian Gang Team in the sheriff’s Operation Safe Streets Bureau.

Our Los Angeles medical marijuana lawyers note such raids show the demand for marijuana, whether medicinal or otherwise. Regardless of whether it’s illegal or legal, it’s evident that the use of this product is not going to disappear, even if politicians succeed in criminalizing its decriminalization.

These arrests concluded a month-long investigation that was kicked off by one lead, local deputies stumbled on two indoor marijuana grow operations at the home of one of the arrested men. The other bust went down inside a commercial building that fronted as a consulting office.

The locations were served with search warrants at about 4:00 p.m. one day last weekend as investigators and Sheriff’s Special Weapons Team deputies entered the locations, according to Temple Tribune.

The bust of their facilities and the arrest of these two men seized nearly 450 plants and close to 200 pounds of dried marijuana, two handguns, a shotgun and hydroponic cultivation equipment.

The two suspects were arrested and booked at the Temple Sheriff’s Station, Los Angeles County Sheriff’s Department. Bail was set at $35,000.00
“We believe the suspect was operating this grow to benefit his gang,” said Sgt. Steve Kim of the Asian Gang Team.

The Sergeant reports that marijuana grow operations in San Gabriel Valley are not uncommon as last year the team seized roughly $5 million worth of product throughout five separate locations.

Marijuana will forever be present on the streets of California. The government continues to search for a way to regulate the distribution of the product. If you are currently facing the government or the court with charges relating to the use or distribution of medical marijuana, you are urged to contact an experienced attorney to help you fight for your rights in the court of law.
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May 16, 2011

Charges Dropped Against Doctor Accused of Writing Shoddy Medical Marijuana Recommendations

By Cannabis Law Group

A case was thrown out earlier this week in Colorado that aimed to convict a medical marijuana doctor in Colorado with writing faulty marijuana recommendations. He was one of the first known doctors in Colorado in the industry. The doctor was facing charges of forgery, attempt to influence a public servant, marijuana distribution and conspiracy to distribute marijuana. He was busted after allegedly writing a recommendation to an undercover officer last year in Englewood.

After an order handed down last week, the Arapahoe County District ruled that the doctor had indeed complied with all requirements under Colorado law in making his recommendation to the undercover officer, according to the Denver Post.

Our Los Angeles medical marijuana attorneys understand that many doctors come under scrutiny for allegedly making questionable medical marijuana recommendations. If you’re facing some of the same allegations, it is critical for you to contact an experienced attorney who can help fight for your rights and your medical license.

“Colorado’s Amendment 20 simply allows for a physician to certify that a patient might benefit from the use of marijuana as a medical treatment,” said District Judge Kurt Horton, “and it is then left up to the patient whether to apply for a medical marijuana registry card.”

The ruling was a slap in the face to prosecutors as it threw another case into question in a county pushing similar charges, according to Grow Switch. Both of these cases, against doctors accused of writing faulty medical-marijuana recommendations, were the first known to be filed in the state.

Both cases originated before the legislature in 2010 adopted new rules requiring that doctors provide a thorough physical exam and offer to provide follow-up care to the patients seeking marijuana recommendation as treatment. Lawyers in both cases contend that their clients were completely in compliance with the much stricter rules.

In California, nearly 8,000 I.D. cards were issued through the Medical Marijuana Program. As of this year, nearly 52.000 people possess these cards and are able to obtain medicinal marijuana in the state, according to the California Department of Public Health.

Those who obtain I.D. cards through the Medical Marijuana Program use the medicinal treatment to help cure a number of conditions, including anxiety, depression, ADD, sleep apnea, and PTSD, just to name a few.
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May 14, 2011

City Sues More Medical Marijuana Dispensaries in Los Angeles

By Cannabis Law Group

As Los Angeles continues to force marijuana dispensaries out of business, the city claimed a quick victory earlier this month in a lawsuit forcing a dispensary to shut its doors, according to L.A. Now.

The decision to force the company out of business came after the city’s attorneys forced the landlord to evict Cancare Collective as the operators chose to avoid litigation.

Our Los Angeles medical marijuana lawyers understand the problems that local medical marijuana dispensaries are facing as cities seek to force them out of business. Keeping your business alive and well at a time where local government officials aim to shut down the entire industry means hiring a law firm experienced in handling the issues.

At a hearing earlier this week, Los Angeles County Superior Court Judge James C. Chalfant also issued an injunction demanding that the North Hollywood dispensary halt operations at 11120 Burbank Boulevard or any of their other locations.

In addition to this suit aiming to close seven dispensaries, the city filed four lawsuits earlier in attempt to close other dispensaries.

“We are hopeful that we will be more successful and speedy this time around,” said Asha Greenberg, the managing assistant city attorney who has led the effort.

The San Jose City Council passed an ordinance earlier this month that mandates marijuana distributed by a San Jose medical marijuana dispensaries be grown on site.

MedMar Healing Center, a San Jose medical cannabis provider, claims that this ordinance will place a de facto ban on a majority of the medical marijuana dispensaries in San Jose. They continue to claim that most of these local dispensaries that do have the space and resources to manage on-site gardens won’t be able to keep up the current level of product quality, diversity or quality of their medical cannibus, according to PR Web. They also worry that by hosting the on-site production of their products they will also increase the security risks to all marijuana collectives.
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May 13, 2011

San Jose Collects Nearly $300,000 from Dispensaries in First Month of New Marijuana Tax in California

By Cannabis Law Group

Last year, San Jose voters passed Measure U. This bill now allows the city to tax marijuana businesses up to 10 percent. According to the official description of the measure, revenues fund so-called essential city services such as emergency response, street maintenance, police, fire, pothole repair and other programs, according to the Peninsula Press.

“We already pay 9.25 percent sales tax … and they want to add another 10 percent? They’re treating it as though it’s a criminal enterprise,” says Medicinal marijuana advocate and former marijuana dispensary volunteer Ellen Young.

Our Los Angeles medical marijuana attorneys understand that government officials continue to throw fees, fines, regulations and bans on medical marijuana dispensaries as a part of their agenda to close them down completely. The CANNABIS LAW GROUP continues to file lawsuits against the city on behalf of numerous marijuana dispensaries throughout the area. We understand the battle that dispensaries fight on a daily bases and understand that these city laws are inherently unfair. We continue to seek economic and punitive damages against the city as we stand with dispensary operators and fight for their business rights.

“I’ve always had the same view, which was a limited number of cannabis facilities in limited places, regulated, and some form of taxation,” says Council Member Pierluigi Oliverio as she continues to show support for the measure.

Dispensary operators must currently determine the tax by remitting their gross receipts. They’re also required to file financial audits so that the city can see the transactions on the general ledger.

“As of May 10, 73 medical marijuana collectives have remitted approximately $290,000 in taxes for the month of March,” the city announced on Friday, according to Toke of the Town.

Until recently, no one was sure just how much the San Jose medical marijuana tax would collect for the city.

Voters continue to overwhelmingly approve such laws. Funny, because San Jose still views their 100 or so medical marijuana dispensaries to be unlawful, but continue to require that the pot providers pay special marijuana taxes to help fund the cash-strapped city.

A majority of dispensary owners figured that government taxation would mean that they’ve finally received legal acceptance, but it’s now apparent that the providers will be catching it from both sides: they are still subject to police raids at the same time they are required to pay taxes to the government.

“The Finance Department is working with the City Manager’s Budget Office to develop a Marijuana Business Tax forecast, but this forecast can only be considered preliminary given the limited amount of collection data and the many factors that need to be integrated into the revenue projections,” says a letter signed by signed by Deputy City Manager Deanna J. Santana, Director of Finance Scott P. Johnson, and Director of Planning, Building & Code Enforcement Joseph Horwedel, San Jose’s Marijuana Business Tax (MBT). “These factors include future business closures and the impact of implementation of the City’s Medical Marijuana Regulatory Program.”

As we’ve discussed, the city is still planning to enforce zoning regulations, land use regulations and other punitive actions. They’re looking to enforce an existing law prohibiting marijuana dispensaries within 600 feet of schools to reduce the number of dispensaries in San Jose to only 10. Dispensaries, advocates and lawyers statewide will continue to fight for fair business rights for these dispensaries.
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May 11, 2011

Two Medical Marijuana Providers Sue Government Claiming it Directly Violated Civil Rights

By Cannabis Law Group

The U.S. government is being accused of civil rights violations by two medical marijuana providers in what may be the first lawsuit of its kind, according to the Associated Press.

The accusations come after a federal crackdown on marijuana operations in Los Angeles and across the nation.

As we previously reported on our Marijuana Lawyer Blog, the Drug Enforcement Administration was in favor of a crackdown if the California’s marijuana legalization effort was put into effect and made law. However, the Obama Administration’s Justice Department has chosen not to target medical marijuana for enforcement action in states where it is legal under state law, such as California.

Still, some are accusing the feds of unfair enforcement action. Owners MCM Caregivers and Montana Caregivers Association allege these federal raids on marijuana businesses are unconstitutional and exceed the government’s authority.

Our Los Angeles medical marijuana attorneys understand that the federal government still considers marijuana as a Schedule 1 drug, claiming that it has a potential for abuse and has absolutely no medical value. Medical marijuana however, has been legal in the state of California since the mid 1990s. It is critical that you contact an experienced attorney if you or your company has been the victim of a crackdown and are now facing charges in state or federal court.

“I think it’s an entirely legitimate topic for debate,” said Obama on whether all drugs should be legalized or not. “I am not in favor of legalization. But I am a strong believer that we have to think more about drugs as a public health problem.”

Since the raid of MCM Caregivers and Montana Caregivers Association, federal agents have raided two dispensaries in Washington State. In addition, federal prosecutors have sent numerous letters of warning to leaders in a majority of the 15 states with medical marijuana laws.

“I’m surprised nobody’s raised a 10th Amendment challenge,” said New Mexico attorney Paul Livingston. “This is a process going on in all the states that have approved medical marijuana. They’re trying to set limits.”

A lawsuit was filed last week in the U.S. District Court in Missoula against the government, Attorney General Eric Holder, U.S. Attorney for Montana Michael Cotter and the Department of Justice. The plaintiff claims that the intent of the raids were to shut down the medical marijuana industry.

“The federal government has made clear its intent to threaten and eventually eliminate any business or enterprise related to the medical use of marijuana,” Christopher Williams of the Montana Caregivers Association and Randy Leibenguth of MCM Caregivers claimed in the lawsuit.
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May 2, 2011

California Medical Marijuana Dispensary Manager Sentenced to 3 1/2 Years

By Cannabis Law Group

A number of defendants have been facing charges after a medical marijuana dispensary raid back in 2007. The manager of that dispensary was sentenced to more than three years in prison, according to an Online Medical Marijuana Resource.

The 38-year-old manager of Nature’s Medicinal Inc. pleaded guilty back in January to conspiring to distribute marijuana charges, according to a news release from the Office of U.S. Attorney Benjamin B. Wagner, Eastern District of California.

Our California medical marijuana lawyers recognize that medical marijuana is in fact legal under state law, but understand that federal law classifies the drug as illegal.

The manager faced a maximum sentence of 20 years behind bar. The former owners of the dispensary have yet to go to trial, as their trial date is set for later this year.

Medical marijuana dispensaries are required to follow a long list of rules and regulations, including operating without making a profit.

After seizing $50,000 in cash from the Nature’s Medicinal’s premises, the DEA accused Nature’s Medicinal of doing million of dollars in business each year.

Three others arrested in the raid of Nature Medicinal have already entered guilty pleas to conspiring to distribute marijuana. They have already been sentenced; 2 1/3 years in prison, 1 year in prison and 1 year 8 months in prison.

The two owners of the dispensary have pleaded guilty to conspiring to distribute marijuana and have yet to be sentenced.

The same raid that busted those involved at Nature’s Medicinal also shut down every marijuana dispensary in Kern County, many shutting down willingly for fear of being raided. Numerous dispensaries have reappeared since then.
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April 27, 2011

More Companies Join the Fight against the Medical Marijuana Lottery in Los Angeles

By Cannabis Law Group

This past week, six medical marijuana dispensaries in California filed separate legal challenges to the Los Angeles ordinance that uses a random drawing to select 100 pot stores that would be allowed to continue their operations. At least eight lawsuits are currently seeking to completely toss out the law, according to the Los Angeles Times.

The new lawsuits call the lottery, deciding who will stay and who will go, “a game of chance” and denounce it as “arbitrary, capricious and irrational.” The lawsuit argues that the lottery violates the constitutional rights of the dispensaries.

The Los Angeles medical marijuana lawyers at the Cannabis Law Group remain dedicated to protecting the rights of legally operating medical marijuana growers, distributors and their patients against the overreaching actions of cities throughout the Los Angeles area. No city should be allowed to enact restrictions, ordinances or other hindrances to business operating legally under California law.

The Los Angeles City Clerk’s Office is currently reviewing 231 applications from medical marijuana dispensaries that have applied to be part of the lottery. Officials intent to arbitrarily choose 100 that the city will permit to operate, according to the Los Angeles Times.

The dispensaries are asking that the Los Angeles County Superior Court judge stops the city from holding the lottery as it serves as an unfair technique that will decide the future of many companies.

The dispensaries to recently join the fight are Downtown Natural Caregivers, God’s Gift, Kush Korner V, Medical Kush Beach Club, New Era Caregivers and Safe Life Caregivers.

While city officials have moved ahead with setting up the lottery, they have also appealed a court ruling that invalidated parts of an earlier ordinance that would have allowed them to use a different method to reduce the number of dispensaries in the city, according to KTLA.

April 23, 2011

Consumers Warned as Fraudulent Medical Cannabis Cards in California

By Cannabis Law Group

The Cannabis Doctors Network is currently streamlining efficacy, security, convenience and legality for patients who are qualified and are seeking to obtain a medical cannabis card in California. Our state currently hosts the most proactive laws to protect doctor recommended patients who are approved for the medical marijuana program, which currently allows for more than 100 different medical conditions to be treated using medicinal cannabis.

Unfortunately, this voter and state approved program consists of some fraudsters that are trying to swindle patients out of their hard earned monies too. These fraudulent providers offer bogus cards and false promises, according to marketwire.

Our California medical marijuana lawyers understand that the Medical Marijuana Program (MMP) was established to provide a voluntary medical marijuana identification card issuance to deserving parties. The program comes equipped with a registry program for qualified patients and their caregivers. The web-based registry system allows law enforcement and the public to verify the validity of qualified patient or caregiver’s card as authorization to possess, grow, transport and/or use Medical Marijuana in California, according to the MMP website.

“While there are plenty of credible organizations that can assist patients in getting a valid and legal medical marijuana recommendation in California, sadly there are some unscrupulous persons who are in it just for the easy buck,” warns Srii Srinivasan, spokesperson for Cannabis Doctors Network.

California was the first and remains the most well-known state to permit medical marijuana. The drug is currently being legally sold to patients in Colorado, Michigan, Montana, Oregon, Washington and New Mexico as well. Five other states will open for business this year, including Arizona, Rhode Island, Maine, New Jersey and the District of Columbia.

The California Department of Public Health (CDPH) specifically states that the only way that a patient can be issued a valid medical marijuana recommendation is by visiting a doctor that possesses in good standing, “a license to practice medicine or osteopathy in California issued by the Medical Board of California or the Osteopathic Medical Board of California.”

To receive a valid card, a registered physician must complete a full examination of the patient. An examination must include a patient’s history and must assume “responsibility for an aspect of the medical care,” according to CDPH. After an examination, the physician must “document in the patient’s medical record that the patient has a serious medical condition and that the medical use of marijuana is appropriate.”

Once the doctor examination is completed, records must be submitted to CDPH with any other required paperwork and needed fees for approval. It is then and only then that the state will review the patient’s information and decide whether or not to approve a medical marijuana card. When a patient is issued a card, they are protected by California Medical Marijuana Law as covered under California Senate Bill 420 (HS 11362.7) Medical Marijuana Implementation.

“Beware of doctors who promise you same day cards, or who will write you a prescription [which is illegal] for medical marijuana,” says Srinivasan. “If a doctor refers you to a marijuana dispensary, that’s illegal as well and is a sure sign of fraud.”

The Cannabis Doctors Network offers users an online system that allows patients to prequalify securely. They’re then matched with thoroughly prescreened medical marijuana doctors in our state.

“Make sure you are getting seen by a real doctor and that they are signing off on your recommendation, and not a nurse or an assistant,” explains Srinivasan. “This is the only way to be certain that you are fully covered under California law.”
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