The Nuance Of Medical Marijuana Raids In California

One of Obama’s campaign promises was to stop federal raids on medical marijuana dispensaries which were allowed by state law. Many pundits (myself included) have been lambasting him for not living up to that promise based upon stories like these:

Police raids on medical marijuana dispensaries continue–and continue with federal help, despite an Obama promise to end federal raids on state-legal medical pot dealers.

Of course, Obama gave his Justice Department a loophole, with Attorney General Eric Holder saying back in March that his DEA’s resources would “go after those people who violate both federal and state law….Given the limited resources that we have, our focus will be on people, organizations that are growing, cultivating substantial amounts of marijuana and doing so in a way that’s inconsistent with federal and state law.” This was a way to live up to Obama’s promise that federal raids on people who were not violating their own state’s law regarding medical marijuana would cease.

Unfortunately, so far it’s hard to know how serious to take this promise in relation to these latest L.A. raids, since the federal agents’ role in the raids on two Westside pot dispensaries (and their owners’ private homes) is still unexplained as of this writing. As the San Jose Mercury News reports.

Authorities are not saying why they raided two medical marijuana clinics and arrested the operator at his Los Angeles home. Jeffrey Joseph was free on bail Thursday, one day after local and federal agents searched his home and the dispensaries in Los Angeles and Culver City. Agents seized 450 plants and hundreds of pounds of marijuana products.

Spokespeople for the Drug Enforcement Administration, Los Angeles police, and the U.S. attorney say they don’t know what Joseph was book on. County prosecutors released no details.

Distributing medical pot is legal under California law but it’s a federal crime. However, the U.S. attorney general has said he wouldn’t target distributors unless state and federal laws were broken. County prosecutors say the task force was acting on a state warrant.

There’s a little history here. Medical Marijuana dispensaries have become much more common in Los Angeles over the last few years due to several loopholes and exemptions that made it possible for them to open quickly. The city council has been trying recently to cut down on these loopholes in order to reduce the number of operating dispensaries, but their own legal exemptions are making it very hard to do this quickly.

So how to close these shops without having to go through arduous examinations of dispensaries’ “hardship exemption” applications? Simple, prove they’ve been doing something else to break the guidelines. On the bright side, they can then call in the big guns at the DEA to lend a hand! It’s win-win for the City Council and the Feds (and a big LOSE for the dispensary owners and their customers, of course).

Sadly, many of the dispensaries are making the job easy on the city. A personal acquaintance of mine is a CPA and runs the books for several of these dispensaries, and this is his take on the matter:

The more I interact within this industry the more I realize how illegal most of these operations are. The state attorney general set up specific guidelines, as did the state board of equalization, that would allow an owner to operate freely without fear of raids & prosecution. The key issue in these operations is transparency, which most dispensaries fail to realize. Those operations that have their doors and books open to state and city regulators are never harassed. The clubs that operate outside of the guidelines are always targeted. And from a accounting and tax standpoint, it’s extremely simple to figure out who is operating by the book and who’s not.

I tell all my new clients to always be aware of the fact that the board of equalization is keeping a close eye on the industry to ensure that every sale is taxed and that every penny is sent to the state. The state BOE is in bed with the Feds and have no problem calling for the leg-breakers (the IRS) when they feel they’re being ripped off; which in most cases they are.

These raids are a violent and disruptive elucidation of one critical aspect of business in our government-dominated world — your business exists at the pleasure of the state. If they want to find a reason to come after you, they will find a reason to come after you, or manufacture one. There are a lot of regulations attached to any business, and even more to the medical marijuana industry. If they’re watching, they’ll catch you breaking one of them:

The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.
-Ayn Rand

This is the modern equivalent to catching Al Capone on tax evasion, when there wasn’t enough to bust him on the charges of bootlegging (and everything else he was involved in). Obama’s not technically breaking his promise here, but he’s still offering to bring in the big guns and prosecute pot dispensaries if they violate tax laws. He’s violating the spirit of the promise.

  • AB390

    The most basic human right is sovereignty over one’s own body. Keeping marijuana illegal for responsible adults is a direct affront to individual liberty. If an adult decides to substitute marijuana, a less toxic less addictive drug, for alcohol, are more dangerous drug, it should not be the goal of the government to dictate otherwise.

    Californians: Tell your state legislators to legalize marijuana for adults. Visit

  • Roger

    I’d like to know who the CPA is in your article above and a lawyer who has esablished himself as an expert in this industry

  • Notsonosey

    *Roger smells like either a NARC or s troll…Best keep yer sources to yerself.

  • Nick P

    What? HE’S violating the spirit of the promise? As I understand it, you’ve made my argument for me. What good are illegally run pot dispensaries that aren’t following the most basic regulatory guidelines, and whose owners are evading paying legal taxes? I wouldn’t stand for my local seven-11 dipping out on their taxes. You make yourselves look like gangsters. Pay your share, and enjoy your position on the ground floor of America’s soon to be largest industry. You idiotic, greedy, short-sighted douchebags.

  • Gary M. Ruehle

    These are NOT LOOPHOLES! These dispensaries are operating using the law as it is written and providing employment to HUNDREDS of people who would otherwise be out of work, and not paying any taxes. Not to mention providing a useful and necessary service to WE THE PEOPLE. THEY are saying using the law as it is written is using loop holes. Why can they not just let the free market which Amerika is founded on operate as it always has. If there is no use for “all these despensaries” they will go out of business on their own. If they thrive, that is good for all of us. This is the law that was voted on by WE THE PEOPLE yet there are these diehards in government that are STILL trying to force their version of what is right for us down our throats which makes me want to just vomit!
    Keep the faith…..and the Visine handy.
    Gary )^_^)

  • Nodrugsforkids

    The guidelines state that the dispensary should be a collective of patients and caregivers and it should be non-profit. You can’t tell me that the vast majority of these are not for profit. Moreover, most of the patients are not sick–they just want to use pot. The federal raids have been few and far between considering that most of these are operating outside the guidelines.

  • Gary M. Ruehle

    Just where did “NoDrugsforkids get this misleading information? Most of the patients just want to use pot. Of course they do. They want to get away from the destructive, addicting DRUGS that Big Pharma wants to push on us. Like Naproxin I needed for my knees. Side effects, Heart Attaacks, stroke, eating holes in your stomach etc. Side effects of pot…NOTHING. Ohhh, yes, it makes you FEEL better. That is all a high is, you feel good. What is wrong with that? Why are 900,000 otherwise law abiding, tax paying, church going, family raising, hard working Americans being arrested for FEELING GOOD? Why is only 600,000 people being arrested for serious crime? I do not know ANY kids that want to take medicine and that is what medical marijuana is, medicine. Keep it away from your kids, it is not the governments job to do that. You don’t let them have Vicoden, Oxy Contin, Morphine do you? Kids cannot go into a dispensary and buy it. Leave the rest of us alone. Gary )^_^)

  • Gary M. Ruehle

    Also,just is wrong with making a PROFIT on your hard work? Is not that the American way, work hard and prosper? Big Pharma and the health insurance industry are making obscene profits on their drugs and services. Why cannot dispensaries do the same with a PLANT? Gary )^_^)

  • Roger

    No, just learning about your world. 57, wanting to retire, thinking how I can get on the band wagon as a legal supplier so I can ride the next big wave. But, I want to do everything legal and pay my taxes

  • Roger

    Your comments sound like you’re hiding something. If it’s legal in 13 states, particulalry in CA, then there are just some bugs that have to be worked out. The only reason Obama might fudge on his promise, is to keep support of the drug companies. It’s a trade off between money and voters. He’ll just feed the marajuana voters a line when he needs your vote

  • Roger

    Check this out. Someday everyone will have free abortion, free medical marajuana and when you’re tired of living, will kill you on demand for free.

  • Gary M. Ruehle

    Check out for very cheap but high quality medical care in the beautiful country of Thailand where top of the line medical and dental care is avainable for 85% less than the U.S. )^_^)

  • Lonnie Wages

    Why is anyone suprised that a politician LIES? This is what they do. Until the government (Big oil and Big Pharmacy and Piggies) Can figure a way to control and tax it. Marijuana will never be legal. WE LIVE IN A CAPITALISTIC SOCIETY. HE WHO HAS THE CAPITAL CONTROLS THE SOCIETY. Get your heads out of your asses and take back your country.

  • dave

    Although I voted for him he is not the son of god, he is a politician, and he had to give the Big Pharm’ies something to back his health care program, so now only insurance co’s. are the bad guys not the pharm’ies when we all know it’s both. Soooo they will keep it illegal, and hard to get so the pharm’ies can make their mega-profits as they do every day…, while we suffer. They lied to us, they always lie to us, if in fact we take our heads out of our asses, we will see the truth, and the truth ain’t always pretty. My advise even if not asked for is this: do what you do and keep it to yourself. This ain’t the free country I and so many fought for.