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Home My WebLink About65A - RPT - REGARDING MEDICAL MARIJUANA INITIATIVEREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MARCH 18, 2013 TITLE: ACCEPT REPORT REGARDING THE MEDICAL MARIJUANA INITIATIVE AND DECIDE WHETHER TO ADOPT PROPOSED ORDINANCE OR PLACE ON BALLOT FOR NOVEMBER 2014 ELECTION CITY MAN4kk CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1s' Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For CONTINUED TO FILE NUMBER RECOMMENDED ACTION 1. Receive and file the attached Report prepared pursuant to Section 9212 of the California Elections Code. 2. Call for the election and place the measure on the November 2014 ballot. Alternatives: a. The Council may place the measure on the November 2014 ballot and seek declaratory relief; b. The Council may adopt the measure without change and it would become effective immediately; c. The Council may direct staff to explore placing a competing initiative on the November 2014 ballot;' d. In the future the Council may consider taking further action, including legal action, as may be indicated after the California Supreme Court decides City of Riverside v. Inland Empire's Health and Wellness Center, Inc. (2011) 200 Cal. App. 41885.2 1 The Council retains authority under Elections Code Section 9222 to place a measure on the ballot. A final determination on whether the full text issue disqualifies the initiative measure could be avoided altogether by having the Council present the measure to the voters as a Council sponsored measure. In order to do this the Council would have to direct staff to prepare the measure and the necessary resolutions calling for an election. However, the Council would not be able to take action on the resolutions calling for the election until after it complies with the California Environmental Quality Act (CEQA) because the California Supreme Court has ruled that City sponsored initiative measures, unlike voter sponsored measures, are subject to the CEQA review process. Compliance with CEQA could delay placement of the measure on the ballot by six months, if not longer. Another thing to consider is that the measure may have substantive defects and the Council may not want to sponsor a measure that is not substantively sound. z Last month the California Supreme Court heard oral argument in the City of Riverside v. Inland Empire Patient's Health and Wellness Center, Inc. (2011) 200 Cal. App. 4th 885. The Court has been asked to determine whether local agencies are preempted, under federal or state law, from regulating or banning the operation of medical marijuana dispensaries and related activities. The Court will likely issue its decision before this initiative is on the ballot. Depending on that decision, the City of Santa Ana may decide to support this initiative, support the current ban on dispensaries, or propose a competing initiative which more strictly regulates medical marijuana dispensaries in the City. 65A-1 Medical Marijuana Initiative March 18, 2013 Page 2 BACKGROUND On February 19, 2013, the City Council received the Certificate of Sufficiency indicating the proponents of the Santa Ana Medical Cannabis Restriction and Limitation Initiative had obtained enough valid signatures to have the Initiative submitted to the voters at the next general election. At that meeting, Council directed staff to prepare a report pursuant to Election Code Section 9212, regarding the impacts of the initiative, and to report back to Council at the March 18, 2013 Council meeting. This report includes analysis of the initiative's impact in the following areas: 1. The initiative's effect on land uses, 2. The initiative's impact on public health and safety, 3. The initiative's fiscal impacts, and 4. A legal analysis of the initiative. The attached report provides information to assist the Council in making a decision to adopt the Initiative as submitted or to submit the initiative to the voters at the next general election. The Elections Code requires that the report be considered by Council within 30 days of Council's acceptance of the Certificate of Sufficiency. FISCAL IMPACT The exact cost of including the initiative on the 2014 General Municipal Election is unknown at this time, but the Registrar of Voters has indicated the approximate cost to the City is $150,000. ayy . Trevino Executive Director Planning & Building Agency onia R. Carvalho ity Attorney JMT:jm jmheportslmedical marijuana initiative.cc "A NIN ys?? k '11?,r -J -) ?, - ?-, - Francisco Gutierrez, Executive Director Finance & Management Services Agency Carlos Rojas Acting Chief of Police 65A-2 SANTA ANA MEDICAL CANNABIS RESTRICTION AND LIMITATION ACT INITIATIVE REPORT TO CITY COUNCIL [Prepared Pursuant to California Election Code § 9212] March 14, 2013 65A-3 TABLE OF CONTENTS EXECUTIVE SUMMARY ............................................................................. i CHAPTER 1 - INTRODUCTION AND BACKGROUND ..................................... 1 Overview ............................................................................................. 1 Chronology of Events ............................................................................. 1 Analysis of Petition ................................................................................ 3 CHAPTER 2 - LEGAL ISSUES .................................................................... 4 Overview of Statutory Procedures for Local Initiatives ................................... 4 Fundamental Right of Initiative ................................................................. 5 Overview of Medical Marijuana Regulation ................................................. 5 Summary of Initiative .............................................................................. 6 Issue: Initiative Must be Consistent with Constitutional Requirements .............. 7 Legal Challenges .................................................................................. 9 CHAPTER 3 - PLANNING AND LAND USE ISSUES ........................................ Defining the Means of Marijuana Distribution ................................................ Land Use Compatibility ........................................................................... Operational Standards ............................................................................ Notice of Completed Registration Process .................................................. Planning Conclusion .............................................................................. CHAPTER 4 - POLICE & COMMUNITY PRESERVATION ANALYSIS ................. Primary Impacts .................................................................................... Secondary Impacts ................................................................................ Initiative Specific Impacts ........................................................................ Police Enforcement and Community Preservation Conclusion ........................ CHAPTER 5 - FISCAL IMPACTS .................................................................. Costs Associated with Initiative ................................................................. Revenue Generation .............................................................................. Fiscal Impact Conclusion ........................................................................ CHAPTER 6 - ELECTION ISSUES .............................................................. Timing and Costs for Conducting the Election on the Initiative Measure ............ EXHIBITS Exhibit 1 - Text of Medical Cannabis Restriction and Limitation Act Exhibit 2 - Potential Location Map Exhibit 3 - White Paper Exhibit 4 - Medical Marijuana Dispensaries: Taxes, Fees, Estimated Revenue 10 10 11 12 12 13 14 14 14 16 18 20 20 20 22 23 23 65A-4 ANALYSIS OF SANTA ANA MEDICAL CANNABIS RESTRICTION AND LIMITATION INITIATIVE EXECUTIVE SUMMARY On February 19, 2013 the City Council directed the City Manager to prepare a comprehensive analysis of the Santa Ana Medical Cannabis Restriction and Limitation Initiative. This report was prepared pursuant to California State Elections Code section 9212 and is divided into the following major sections: Introduction and Background, Legal Issues, Planning and Land Use Issues, Police and Code Enforcement Issues, Fiscal Impacts and Election Issues. This initiative measure would require the City to authorize at least twenty-two (22) medical marijuana dispensaries to operate in Santa Ana. The initiative would repeal the City's current ban on such dispensaries and replace it with a ministerial administrative process to govern the operations of medical marijuana collectives or cooperatives, including storefront dispensaries. The initiative imposes a gross receipts business tax on collectives and cooperatives. The initiative requires that dispensaries obtain a Notice of Completed Registration, issued on a first come, first served, basis. The issuance of a Registration is a ministerial process which allows no input from the City regarding location within the authorized zones. This could result in several dispensaries being located within close proximity to one another. Additionally, although applicants are required to provide minimal information regarding their operational and security plans, the initiative does not authorize City input regarding those plans. When an applicant has received a Registration, it is eligible to obtain a certificate of occupancy, also on a ministerial basis. The lack of review authority may result in building and fire safety issues at these locations. The proponents of the initiative presented the City Clerk with a Notice of Intent to Circulate a Petition on July 16, 2012. The City Attorney prepared a Ballot Title and Summary, which the City Clerk delivered to the proponents on July 31, 2012. The petition was then circulated by the proponents for signature. On January 24, 2013 the proponents submitted their petition to the City Clerk who transmitted it to the Orange County Registrar of Voters for signature verification. Based on a random sampling of three percent (3%) of the signatures, the Registrar projected a total of 13,240 signatures were valid, which represents at least 10% of the registered voters in Santa Ana. The Initiative therefore qualifies for the next general election. The Registrar's projection was certified and submitted to the City on February 4, 2013. 65A-5 On February 19, 2013 the City Clerk presented the certified petition to the City Council. On that same date, the City Council ordered the City Manager to prepare an analysis of the Initiative pursuant to Election Code section 9212. The City Council may adopt the initiative measure without change, or place the initiative on the ballot at the next regular election. The Orange County Registrar of Voters estimates that the cost of conducting the election, if it is consolidated with the County on November 4, 2014, is approximately $150,000. ii 65A-6 CHAPTER 1 INTRODUCTION AND BACKGROUND This chapter will provide an overview of the Santa Ana Medical Cannabis Restriction and Limitation Initiative (the "initiative"), the chronology of events to date regarding the proponent's efforts to qualify the initiative for the ballot, and an analysis of the signatures obtained on the proponent's petition. Overview of Initiative The initiative, if approved, would repeal the City of Santa Ana's prohibition of medical marijuana dispensaries, and replace it with a ministerial administrative process to authorize medical marijuana dispensaries to operate in the City. The initiative requires the City to authorize at least twenty-two (22) medical marijuana dispensaries to operate in Santa Ana. The initiative authorizes the City Council to increase, but not decrease that number, based on a formula of one dispensary for every 15,000 residents. The initiative creates a ministerial administrative process for issuing a "Notice of Completed Registration", allowing a collective or cooperative to provide medical marijuana within the City. The initiative prohibits collectives and cooperatives in residential zones and allows them in the C1, C4, C5, M1 P & C-SM zones, and provides operating standards which collectives and cooperatives must meet. Finally, the initiative imposes a two percent (2%) gross receipts tax on collectives and cooperatives. All of these initiative provisions are discussed in greater detail throughout this report. The full text of the Initiative ordinance can be found in Exhibit 1. Chronology of Events The following provides a summary of the key events that have occurred over the last nine months regarding the Initiative. July 16, 2012 The proponents of the Santa Ana Medical Cannabis Restriction and Limitation Initiative presented the City Clerk with a Request for Ballot Title and Summary and Notice of Intent to Circulate a Petition. July 31, 2012 The Ballot Title and Summary was prepared by the City Attorney and given to the proponents by the City Clerk. August 2, 2012 The Notice of Intent to Circulate was published by the proponents in the Orange County Register. With the publication of the Intent to Circulate, the proponents could commence circulation of the petition. The California Elections Code provides 180 days from the date of receipt of the title and summary by the proponents for circulation of the petition. 65A-7 January 24, 2013 The proponents of the Santa Ana Medical Cannabis Restriction and Limitation Initiative filed their petition with the City Clerk. The City Clerk's Department staff examined the petition and determined the number of signatures, prima facie, was in excess of the number of signatures required for either a 10 percent or 15 percent count. The petition was accepted as filed on this date. January 25, 2013 The City Clerk hand-delivered the petition to the Orange County Registrar of Voters for validation of the signatures. The petition contains a clause requesting a special election, which requires that the petition be signed by at least 15 percent of the registered voters (16,374). Therefore, the Registrar of Voters was directed to perform a three percent (3%) random sample of the signatures contained in the petitions. Based on the sample, the Registrar determined that 77.8% of the signatures were valid and 22.2% were invalid. The Registrar projected that 13,240 signatures would be valid. The projected valid signatures equal more than 110% of the number of signatures required to qualify for the 2014 General Election, but are not sufficient to qualify for a special election. The official Report of Registration to the Secretary of State for the City of Santa Ana, which was effective at the time the Notice to Circulate was published, indicates that there are 109,155 registered voters in Santa Ana. Therefore, 10 percent or 10,916 valid signatures were required to qualify the petition for the ballot. February 4, 2013 The Registrar of Voters examined the petition and, based on the official records of voter registration, certified that a sufficient number of valid signatures were attached to the petition. February 19, 2013 The City Clerk reported to the City Council that the petition contained verified signatures of at least 10 percent of the voters of the City, complied with the technical requirements in that the required statements, fonts and signatures were on the petition, and certified the petition. The City Council's action at that meeting was to order a report pursuant to Elections Code Section 9212. 2 65A-8 Analysis of Petition Following the proponent's filing of the petition with the City Clerk on January 24, 2013, the Orange County Registrar of Voters then performed an examination of the signatures submitted. Table 1 summarizes the results of this examination: Table 1 Results of O. C. Registrar of Voters Examination Number of signatures submitted 17,009 Number of signatures examined 510 Number of signatures found valid 397 Number of signatures found invalid 113 Number of signatures invalid due to duplication 0 Once the Orange County Registrar of Voters reported back on the results of its examination, staff performed an analysis of the data based on the factual information presented in the petition. The results of this analysis are provided in Table 2: Table 2 Analysis of Petition Signatures Total registered voters in Santa Ana Total signatures required for General Election 110% of signatures required for random sampling verification Total signatures required for Special Election 110% of signatures required for random sampling verification 109,155 10,916 (10% of registered voters) 12,008 16,373 (15% of registered voters) 18,011 From the analysis in Table 2, it can be concluded that the petition contains verified signatures of at least 10 percent of the voters in the City, which qualifies it for a General Election. 65A-9 CHAPTER 2 LEGAL ISSUES This chapter presents a legal analysis of the Santa Ana Medical Cannabis Restriction and Limitation Initiative prepared by the City Attorney. It provides an overview of the statutory procedures for placing a local initiative on the ballot, a review of state and federal laws relating to marijuana, provides a summary of the initiative, examines the legal validity of the initiative, and sets forth the procedures for a legal challenge to the initiative. Overview of Statutory Procedures for Local Initiatives An initiative is "the power of the electors to propose statutes and amendments to the Constitution and adopt and/or reject them." (Cal. Const. art. II § 8(a).) Initiative powers may be exercised by the electors of each city under procedures established by the Legislature. (Cal. Const. art II, § 11.) California Elections Code Sections 9200, et sec sets forth the statutory procedures for city initiatives. The initiative process commences on the filing of the text of the initiative and a notice of intent to circulate petition with the city clerk. (Elections Code § 9202.) Within fifteen days, the city attorney must provide an impartial analysis and non-argumentative ballot title and summary summarizing what the measure says. (Elections Code § 9203.) The proponents of the measure must publish or post the notice of intention and the title and summary of the proposed measure. (Elections Code § 9205.) When notice is published, the publication must be in a newspaper of general circulation for the city. It is not required that the entire text of the measure be published. After publication or posting, the proponents may circulate the petition among the registered voters of the city. (Elections Code § 9207.) The petition must be signed and circulated in accordance with Section 9207 of the Elections Code. Elections Code Section 9209 requires that each section of an initiative have a declaration of the person soliciting the signatures attached. The statute further requires that the declaration include a statement that the circulator is a voter of the city. (Elections Code § 9209.) After signatures are secured, the petition is filed with the city clerk. The petition must be filed within 180 days of the receipt of the title and summary. (Elections Code § 9208.) If an initiative petition has signatures equal to fifteen percent or more of the registered voters of the city and contains a request for a special election, the measure must be submitted to the voters at a special election to be held not less than 88 days nor more than 103 days after the city council's decision. (Elections Code § 9214.) If the petition does not contain a request for a special election and has signatures equal to ten percent or more of the registered voters and is not passed without changes, the city council must place the measure on the ballot at the next regular election held not fewer than 88 days after the city council's decision, provided the petition contains the signatures of at least ten percent of the registered voters. (Elections Code § 9215.) 4 65A-10 The Santa Ana Medical Cannabis Restriction and Limitation Initiative was signed by at least ten percent (10%) of the votes and has qualified to be included on ballot for the next regular election. (Elections Code §9215.) Fundamental Right of Initiative The courts have described the right to initiative as "one of the most precious rights of our democratic process." (Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 591.) Because the initiative is not a right granted to the people, but rather, is a power "reserved" to them, the courts generally apply a liberal construction to this power. (Rossi v. Brown (1995) 9 Cal.4th 688, 695.) As one court noted, "[i]f doubts can be resolved in favor of the use of this reserve power, courts will preserve it." (Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582,591.) Absent a clear showing of the Legislature's intent to the contrary, courts will presume that the legislative decisions of a governing body are subject to initiative and referendum. (See, Voters for Responsible Retirement v. Boards of Supervisors (1994) 8 Cal 4th 765, 777.) Courts have traditionally been reluctant to interfere with the right of initiative. This reluctance has been described as either a "judicial policy of liberally construing the power of initiative" or as a "presumption" in favor of the initiative power absent a clear showing of legislative intent to the contrary. (Empire Waste Management v. Town of Windsor (1998) 67 Cal.App.4th 714, 718.) Notwithstanding these principles, courts have found initiatives to be invalid in a variety of circumstances, including where the initiative is preempted by state law, either because the subject matter is fully occupied by state law or because the initiative contradicts state law. (Morehart v. County of San Barbara (1994) 7 Cal.4th 725 [merger provisions of local zoning ordinance preempted by Subdivision Map Act].) Additionally, courts have found initiatives to be beyond the power of the electorate where the proposed initiative attempts to control a function expressly delegated to the discretion of the city council by paramount state law. (Committee of Seven Thousand v. Superior Court (1998) 45 Cal.3d 491, 502 [holding certain matters involving local financing of highway construction are delegated exclusively to the local legislative body and, therefore, the electorate may not be exercise the power of initiative on these matters].) Overview of Medical Marijuana Regulation In 1970 Congress adopted the Federal Controlled Substances Act (CSA) which establishes a federal regulatory system designed to fight recreational drug use by making it unlawful to manufacture, distribute, dispense or possess any controlled substance. The CSA designates marijuana as a Schedule I controlled substance, meaning a drug with no currently accepted medical use. As a Schedule I controlled substance, it is a federal criminal offense to manufacture, distribute or possess 5 65A-11 marijuana. Further, because it has no recognized medical purpose, marijuana may not be prescribed by licensed physicians. California voters approved the "Compassionate Use Act of 1996" ("CUA") Health & Safety Code § 11362.5) which provides that state criminal sanctions shall not be imposed against a qualified patient or the patient's primary caregiver, for possession or cultivation of marijuana for the personal medical purposes of the patient, upon the recommendation of a physician. In 2003, the California Legislature enacted the "Medical Marijuana Program Act" ("MMPA") adding §§11362.7 - 11362.83 to the Health and Safety Code, to provide uniform and consistent application of the CUA, provide for identification of qualified patients and their primary caregivers through a voluntary identification card program, and enhance access to medical marijuana through collective and cooperative cultivation projects. It is important to understand that neither the CUA nor the MMPA "legalize" marijuana. They merely provide a limited defense to qualified patients and their primary caregivers with respect to state criminal sanctions related to the possession, cultivation, transportation and distribution of medical marijuana, when a physician has recommended its use to treat a serious medical condition. Last month the California Supreme Court heard oral argument in City of Riverside v. Inland Empire Patient's Health and Wellness Center, Inc. (2011) 200 Cal. App. 4t 885. The Court has been asked to determine whether local agencies are preempted, under federal or state law, from regulating or banning the operation of medical marijuana dispensaries and related activities. The Court will likely issue its decision before this initiative is on the ballot. Depending on that decision, The City of Santa Ana may decide to support this initiative, support the current ban on dispensaries, or propose a competing initiative which more strictly regulates medical marijuana dispensaries in the City. Summary of Initiative The Santa Ana Medical Cannabis Restriction and Limitation Initiative repeals the current ban on medical marijuana dispensaries and replaces it with an administrative process which will authorize at least twenty-two collectives and cooperatives to operate in Santa Ana. Section 3 of the initiative amends Article XIII of Chapter 18 of the Santa Ana Municipal Code as follows: 1. Repeals the current prohibition of medical marijuana dispensaries, including collectives and cooperatives, within the City of Santa Ana. 2. Requires the City to authorize a minimum of twenty-two (22) medical marijuana collectives or cooperatives. The number of authorized collectives and 6 65A-12 cooperatives is based on the City's population (1 dispensary per 15,000 residents). The authorized number may be increased by the City Council, but it may not be decreased below twenty-two. 3. Establishes the zoning districts in which collectives and cooperatives may be located. 4. Provides a ministerial administrative process for applying for and obtaining a "Notice of Completed Registration" which authorizes the applicant to operate a medical marijuana collective or cooperative within the City. 5. Provides that a successful applicant, after it obtains a Notice of Completed Registration, may receive a Certificate of Occupancy and a business license on a ministerial basis without complying with special or conditional use requirements, specifically including parking standards. 6. Provides for operating standards including security such as lighting and alarms, membership guidelines and record keeping, prohibition on possessing a license from the State Department of Alcohol Control, and signage requirements. 7. Prohibits the City, its officers and employees from accepting federal funds to assist in the enforcement of the CSA or to investigate, prosecute, or participate in any task force which investigates or prosecutes offenses that are legal under California medical marijuana laws. Section 4 of the initiative repeals Santa Ana Municipal Code § 41-121, defining "medical marijuana dispensary". Section 5 of the initiative amends Santa Ana Municipal Code § 41-144, to remove the designation of "medical marijuana dispensary" as a land use which is specifically not a retail and service use. Section 6 of the initiative amends Santa Ana Municipal Code § 21-119, to establish an additional gross receipts tax classification for "cannabis business" and imposes a two percent (2%) gross receipts tax on those businesses. If approved, Elections Code Section 9217 provides that the initiative will go into effect 10 days after the election results are declared by the governing body. If the City Council adopts the Santa Ana Medical Cannabis Restriction and Limitation Initiative, or in the alternative, submits the initiative to the electorate and it passes, you should be aware of the following legal implications: Issue: Initiative must be consistent with constitutional requirements An initiative is subject to constitutional requirements. The doctrine of equal protection requires that parties similarly situated must be treated alike under the law. However absolute equality is not required. In areas of social and economic policy, not involving a suspect class or fundamental right, the court will uphold the classification as long as there is a reasonably conceivable set of facts that provides a rational basis for the 7 65A-13 classification. The burden of disproving a rational basis is on the party challenging a statute. (Kasler v. Lockyer (2000) 23 Cal. 4th 472, 482.) Courts will defer to the legislative body when analyzing classifications. However, even in an ordinary equal protection case, calling for the greatest deference, the court must ascertain the relation between the classification adopted and the object to be obtained. (Warden v. State Bar (1999) 21 Cal 4th 628.) The initiative distinguishes between similarly situated persons in two distinct areas. First an applicant must provide evidence that it was, and has been operating at the location prior to December 31, 2011. Second, a licensed physician actively making patient recommendations is not eligible to obtain a Notice of Completed Registration, effectively denying licensed physicians from operating a dispensary. The Proponents do not set forth a basis for either of these restrictions on the right to apply for registration. However, the right to operate a collective or cooperative is not a fundamental right, therefore the court will review the regulatory scheme under a rational basis test to determine whether it is reasonably conceivable that these restrictions bear a rational relationship to a legitimate interest of the City. (FCC v. Beach Communications, Inc. (1993) 508 U.S. 307.) The courts have upheld classification based on prior legal existence. A distinction exists here as all dispensaries have been banned in Santa Ana since 2007. Any dispensary that has been operating since December 31, 2011, has been operating illegally, and has not acquired any right to continued operation. In fact, the City has been working to close all existing illegal dispensaries. No rational argument can be made to reward the illegal operation by putting those dispensaries at the front of the line for a right to continue to operate. The existing illegal dispensaries have been operating against the law from the time they began operating. There is no reason to believe existing dispensaries would be more likely than new dispensaries to comply with the regulations imposed through the initiative. Additionally, no conceivable argument can be made that physicians who actively make patient recommendations pose a greater threat than dispensary operators which exist only to dispense marijuana, and have no other relationship with qualified patients or their primary caregivers. A recommending physician is a person who 1) possesses a license to practice medicine in California; 2) has taken responsibility for some aspect of the medical care, treatment, diagnosis, counseling or referral of a patient; and 3) has complied with accepted medical standards when recommending medical marijuana for his patient. Attorney General Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use (August 2008) (AG Guidelines). Although medical marijuana "dispensaries" have been operating in California for years, dispensaries, as such, are not recognized under the law. Dispensaries do not generally comply with the AG Guidelines. For example, dispensaries that merely require patients to complete a form summarily designating the business owner as their primary caregiver - and then 8 65A-14 offering marijuana in exchange for cash "donations" - are likely unlawful. (People ex rel Lungren v. Peron (1997) 59 Cal. App. 4th 1383, 1390.) The initiative denies equal protection to two different classes: 1) collectives and cooperatives that did not illegally set up shop prior to December 31, 2011, and 2) licensed physicians actively treating their patients. At a minimum, the offending restrictions should be stricken from the applicant requirements set forth in the initiative. Legal Challenges California courts recognize and protect the rights of the people to directly initiate change through the initiative process. (MCH Financinq Limited Partnership v. City of Santee (2005) 125 Cal..App.4th 1372, 1381.) Although courts have the discretion to determine validity before the election "[e]ven grave doubts as to the constitutionality of an initiative measure do not compel a court to determine its validity prior to its submission to the electorate." (Gavle v. Hamm (1972) 25 Cal.App.3d 250, 256.) Accordingly, a court may not deny the right to vote on an initiative unless there is "compelling showing" that it is "clear beyond question" that the proposed measure is legally invalid. (McFadden v. Jordan (1948) 32 Cal.2d 330, 332.) Legal challenges are initiated by a petition for writ of mandate that seeks to invalidate the initiative measure; and sometimes by a complaint for declaratory relief which asks the court to determine the measure's legal status. (See e.g., Citizens for Jobs and the Economv v. County of Orange (2002) 94 Cal.App.4th 1311 [Opponents sought injunctive and declaratory relief and writ of mandate to prevent county from implementing voter-approved initiative].) Although persons or entities with legal standing have the right to seek judicial relief, the affected public agency may also ask a court to determine the contest or otherwise determine the validity of the initiative measure. Id, at 1316. County was sued as a defendant and filed its own cross- complaint to contest the validity of certain spending and procedural restrictions imposed by the measure]. If an invalid provision of an initiative or ordinance is severable, the court will strike the invalid provision from the ordinance and the remaining provisions will be given effect. When the initiative contains a severability clause, an invalid provision is severable if it is grammatically, functionally and volitionally (i.e., voters would have adopted the initiative without the offending provision) separable. (MCH Financing, supra at 1393.) 9 65A-15 CHAPTER 3 PLANNING & LAND USE ISSUES Defining the Means of Marijuana Distribution The City currently regulates medical marijuana dispensaries under Article XIII of Chapter 18 of the Santa Ana Municipal Code (SAMC), "Health and Sanitation". This section was added to the code in 2007 and prohibits the establishment of medical marijuana dispensaries throughout the City. The code does not apply to State-licensed clinics, health care facilities, residential care facilities for persons with chronic life- threatening illnesses, residential care facilities for the elderly or residential hospice or home health agencies. The Santa Ana Medical Cannabis Restriction Limitation Initiative would amend Chapter 18 to remove the current prohibition and allow for the distribution of marijuana in specified zones. Section 18-61 defines a "medical marijuana dispensary" as a "facility or location" where medical marijuana is distributed or made available. The definition specifically includes medical marijuana cooperatives, defined as two or more people who collectively or cooperatively provide medical marijuana, While this does somewhat blur the line between the physical facility and the service provider, it nevertheless clearly identifies a physical establishment as the dispensary. The initiative does not specifically refer to physical establishments where marijuana is distributed, i.e. dispensaries, but rather uses the terms "collectives and cooperatives" without any reference to a physical establishment. For all intents and purposes the collective or cooperative, although referring to a group of people in the definition, is indistinguishable from the physical establishment used to distribute the drug. However, based on further descriptions in the definition, medical cannabis collectives and cooperatives would provide "transfers" of cannabis subject to the City's gross receipts tax, indicating some point of sale. Additionally, the initiative mandates the eligibility for a Certificate of Occupancy (C of O) and sets strict time limits for inspection and issuance. This functionally creates a medical marijuana "dispensary" or "store." Moreover, the initiative's imposition of a special 2% Gross Receipts Cannabis Business License Tax Rate, along with the City's receipt of a portion of the sales tax collected by the California Board of Equalization, characterizes the activity of the medical marijuana dispensaries as retail sales. As such, our understanding of a collective or cooperative is that it would function as a physical establishment, conducting business in a fixed location. This is important for understanding how the use would operate and for evaluating any impacts that such a use would have on its neighboring uses. This will be further discussed in the Land Use Compatibility section. The initiative's definition of collective or cooperative as those operations including five or more patients or their primary caregivers, does not address those operations providing medical marijuana for more than one but less than five patients. With the repeal of the 10 65A-16 City's current definition (two or more), these smaller operations would be unregulated upon passage of the initiative. Land Use Compatibility The initiative specifies that collectives or cooperatives would be allowed within the City's commercial zones, industrial zones and professional office zones, with the exception that they will not be allowed within 600 feet of a public or private school - grades kindergarten through 12. The initiative establishes a minimum number of 22 authorized collectives or cooperatives. The number of authorized dispensaries may be increased by the City Council, based on a formula of one per 15,000 residents should the City's population increase above 330,000. (The official State of California population count for the City for 2011, effective January 1, 2012, was 327, 7,731 a .07% increase from 2010.' Conservatively assuming similar future population growth a new dispensary will be eligible to be registered every five years or less). There are no regulations contained in the initiative regarding the overall distribution of the facilities and there is no cap. Medical marijuana dispensaries in Santa Ana typically have several components to their design and operation. The "patient" is generally admitted into a waiting room that is often similar in design to a medical office with a security window and seating, where the patient's identification card is checked. However, identification may be required before any admittance into the facility. The patient is then admitted to the room where the products are displayed and sold. The marijuana products may range from jars containing the dried plant to marijuana-infused edibles, such as baked goods, drinks, and candies. Some dispensaries also sell associated products, such as rolling papers, glass pipes and vaporizers. Larger facilities contain a growing room where marijuana is cultivated on site, and a facility for processing the plants and making other products. Some facilities allow on-site consumption. The products are generally displayed in cases and employees assist clients in selecting and purchasing the products. Some dispensaries offer introductory offers and special sales promotions, as well as special events that might feature food or entertainment. Hours of operation tend to range, but many facilities are open until midnight. There is a well-established system of advertisement, internet presence and social media associated with the medical marijuana industry. In general, these businesses tend to operate more as commercial retail establishments, than as medical offices or pharmacies, with the added provision of some facilities also having a quasi-industrial use if they include the growing and production component. Staff has prepared a map depicting the locations where the collectives or cooperatives would be allowed to be located pursuant to the initiative (Exhibit 2 - Potential Locations Map). Due to the wide range of zones, collectives or cooperatives would be allowed in a large number of areas throughout the City. The initiative does not contain any restrictions as to the number of collectives or cooperatives that could locate within a particular area, which could lead to clustering of the use depending on space availability. Although prohibited, medical marijuana dispensaries that have been 1 Population figures derived from California State Department of Finance, Demographic Research Unit, 01/01/2012. 11 65A-17 illegally established in Santa Ana are located within a range of zones and buildings, including small-scale industrial parks, office buildings and commercial corridors. Some facility operators prefer a more visible commercial location, while others prefer a more discreet location. As the initiative is written, collectives or cooperatives could locate in a wide variety of places including areas immediately adjacent to sensitive uses, such as residential neighborhoods. In cities where medical marijuana dispensaries are allowed, they are often restricted to a limited number of zones to reduce the likelihood of conflicts or incompatibility with adjacent uses. They often also establish separation requirements from locations such as parks, residential uses, halfway houses, other dispensaries, etc. Operational Standards The initiative contains a list of operational standards, but they are not sufficient to mitigate impacts to adjacent uses. For example; there is no prohibition on the consumption of marijuana within the facility, there are no requirements for separate ventilation systems, minors are allowed in the facility if they are accompanied by a parent or guardian, there is no requirement for security guards, there is no limitation on hours of operation, no limit on the number of patients, no differentiation between facilities that grow marijuana on site and those that do not, no requirement that the production of edibles be regulated by the County Health agency, no restrictions on the sale of ancillary products, no restrictions on special promotions and events, to name a few. Cities that allow dispensaries have generally adopted strict operational standards to address these components of the business operation that can cause impacts to surrounding uses and/or cause public safety concerns. Notice of Completed Registration Process The initiative details the process by which applicants would be granted permission to operate as a collective or cooperative and establishes a strictly ministerial process for granting this permission. Rather than a permit, the applicant is required to register with the City and be issued a Notice of Completed Registration. The applications would be processed by the Executive Director of the Planning and Building Agency. The initiative prohibits the City from requiring any sort of discretionary permit, such as a Conditional Use Permit. There is no requirement for any sort of public notification. The initiative lists the pieces of information that would be required of the applicant, which are very basic. The only information that would begin to address concerns the City might have about operations is a scant "one-page description of the collective/cooperative's nature and its plans for security and non-diversion of medical cannabis." There is no ability for the City to request information beyond that which is listed in the initiative. Cities that allow medical marijuana dispensaries typically require more information than what would be allowed under the initiative 12 65A-18 The initiative provides that upon issuance of a Registration, the applicant is eligible for a Certificate of Occupancy (C of O). The initiative requires that inspections be completed and the C of O issued within 30 days of application unless tolled by the applicant. It can be denied with a written justification, but is deemed issued if this does not occur within 30 days. This provision could circumvent the California Building Code and create an unsafe situation. Planning Conclusion As it is written, the initiative fails to provide an adequate regulatory framework under which to permit the establishment of medical marijuana collectives and cooperatives, however it would allow a relatively small number of establishments and would provide some structure to what is essentially an unregulated use today. 13 65A-19 CHAPTER 4 POLICE AND COMMUNITY PRESERVATION ISSUES Primary Impacts As of March 3, 2013 Community Preservation staff has confirmed 52 illegal medical marijuana dispensaries operating in the City. The initiative's proposed minimum of 22 registered collectives or cooperatives will not result in the voluntary closure of illegal dispensaries. This analysis does not address the continued enforcement which will be required to address illegal medical marijuana dispensaries that would be operating without registration. However, additional Police and Code Enforcement staff will be required to address complaints regarding quality of life and safety of the citizens of Santa Ana, arising from the operation of the 22 registered collectives and cooperatives. The MMPA authorizes collectives and cooperatives, but does not authorize dispensaries. Primary impacts on public safety in the City of Santa Ana experienced due to existing medical marijuana dispensaries involve sales to minors, increased drug dealing, robbery of customers, burglaries of the dispensaries, increased attractive nuisance activities including loitering, litter, public urination, heavy vehicle and pedestrian foot traffic in commercial, professional and manufacturing areas. The initiative does not include any enforcement tools that would allow Police and Code Enforcement to address these issues. Information received by the Police Department indicates that dispensaries are commonly large money making enterprises. In California the dispensary operations have been tied to organized criminal gangs, can foster large grow operations, and are often multi-million dollar profit centers (Exhibit 3 - White Paper on Marijuana Dispensaries by California Police Chiefs Associations Task Force on Marijuana Dispensaries 2009). The initiative limits Registration only to dispensaries that have been operating in Santa Ana since at least December 31, 2011, despite the fact that Santa Ana has banned all medical marijuana dispensaries since 2005. The initiative does not allow for City review of the application to determine what complaints and investigations have been directed at the dispensary, thereby undermining the City's ability to deny a Registration to the most egregious storefront dispensaries, frequently operated by organized crime. As long as the applicant provides evidence that it operated a dispensary since December 31, 2011, a Registration would be allowed. Secondary Impacts Secondary impacts attributed to medical marijuana dispensaries arise from the incompatibility of this type of business with adjacent businesses and residences. 14 65A-20 Neighboring business and residents complain, and will likely continue to complain, of disruption of business activity, increased noise complaints, increased marijuana smoking in public, normally in the dispensaries parking lot, and loss of business from those businesses adjacent to the dispensaries. A common complaint highlighting the incompatibility with other business is impaired health due to vapors and strong marijuana smell emanating from the dispensary through a shared ventilation system or because the premise's doors remain open. Nearby businesses frequently complain about the strong smell or odor of marijuana permeating throughout a business complex, and some of these businesses indicate that the dispensaries drive away the business' customers and clients. Other concerns raised in neighborhood meetings are that some dispensaries are located within proximity, and in a path of travel, to schools and residential properties. This proximity exposes children and residents to the dispensing and use of marijuana by the clientele associated with this type of business. This exposure may be more evident when the business front door is adjacent to a public sidewalk. For example: 832 E. 17th St.; the dispensary front door opens to the public sidewalk and in close proximity to apartment units. 1314 N. Grand Ave.; While the entry is not directly adjacent to the sidewalk, only a short parking lot separate the dispensary from children. 929 S. Main, recently discussed in a Spanish-speaking television news report; the front door opens to public sidewalk, the business is not compatible with surrounding business owners, and it is in close proximity and within path of travel to a residential zone and an elementary school. These dispensaries, which negatively impact the surrounding neighborhood, will be prohibited only if it located within 600 feet of a K-12 school. Other than the 600 feet proximity to schools restriction, the initiative does not address any of the concerns described above related to secondary impacts nor does it address path of school travel issues. The following incidents also illustrate the impact of dispensaries: 1. 1820 E. Garry Ave. - Armed robbery - Adult male victim robbed at gunpoint. Victim states that he had just purchased his medical marijuana from a dispensary and was approached by a suspect with a handgun. Suspect demands "Give me your marijuana". 2. 1820 E. Garry Ave. - Business owner complaints of continual attractive nuisance activity affecting his business from adjacent dispensary. Complaints include smoking of marijuana around his establishment, the constant odor of marijuana through the ventilation system affecting his ability to conduct business. The clients of the dispensary tend to loiter and leave trash in front of other 15 65A-21 businesses. One business closed to find a more suitable location because of the nuisance activity and another in the same complex threatens to move out. A business owner at this address writes: "The smell is the primary issue, but other problems arise from having such a business in our building. The "Clients" of the tenants tend to loiter and leave trash in front of my unit. They all tend to be relatively younger and most of them tend to dress in gangster style which is offensive for the clients that I have." (Letter from business owner) 3. 826 N. Bristol St. - Officers respond to a complaint of prostitution activity. During the investigation it is determined that the location is operating as a dispensary. 4. 1616 E. Fourth St., 1621 E. 17th St., 705 W. 17th St. - Burglary of dispensaries. 5. 1611 E. 17th St. - Business owner upset because two dispensaries are located near her business and has seen an increase of graffiti, trash, and "weird" people. Owner is deeply distressed and planning to move her business out of the city. Initiative -Specific Impacts: Section 18-610 (a) 3: establishes a purely ministerial process 2 which inhibits police and code enforcement staff from acting proactively by leaving no room for additional mitigation measures which would be designed to address known public safety and public nuisance issues. The failure to address these foreseen and potentially preventable issues will lead to increased Police Department and Code Enforcement activity that, given existing resources, could impact services available to the rest of the community. Section 18-610 (a) 5_Lc): prohibits the Police Department and Code Enforcement and its staff from using City resources to assist in the enforcement of federally controlled substance laws to the extent they are inconsistent with California medical marijuana laws. Section 18-610 (a) 5 (d): prohibits the Police Department and Code Enforcement from accepting Federal funding or participating in any task force that accepts Federal funding ` Ministerial duty refers to the official duty of a public officer or official wherein the officer or official has no room for the exercise of discretion, and the performance being required by direct and positive command of the law. The powers and duties of public officers or officials are, in general, classified as ministerial or d discretionary. The character of a duty as ministerial or discretionary is to be determined by the nature of the act to be performed, and not by the office of the performer. Official duty is ministerial when it is absolute, certain, and imperative, involving merely execution of a specific duty arising from fixed and designated facts; that a necessity may exist for the ascertainment of those facts does not operate to convert the act into one discretionary in its nature. 16 65A-22 or revenue sharing, to investigate, cite, arrest, prosecute or seize property based on offenses which would be legal under California medical cannabis laws. The restrictions regarding enforcement efforts (18-610 (a)(5)(c) & (d)) impose an operational restraint on the Santa Ana Police Department that will prohibit the investigation of medical marijuana dispensaries which are not operating in conformance with California law. Until an investigation is complete, the operation cannot be confirmed to be a legal cooperative or collective instead of an illegal dispensary. When the Santa Ana Police Department receives a request for assistance from a Federal agency, the officer does not know whether the business will eventually be found to be operating within the Compassionate Use Act. At a minimum, an officer's refusal to provide assistance not only puts the City at odds with the Federal agency, it also jeopardizes the safety of the federal personnel who will be required to investigate without the assistance a uniformed presence. If the operation eventually uncovers an illegal marijuana distribution, the City's refusal to cooperate would also be a violation of the Controlled Substances Act. Section 18-610 (a) 6 (e): prohibits the City from requiring a collective or cooperative to obtain any special use or conditional use permit. Establishes a purely ministerial process which severely inhibits police and code enforcement staff from incorporating additional mitigation measures which would be designed to address known public safety and public nuisance problems. Section 18-615 (5): requires a "plan" for security with no set minimum standards or description of what the plan is intended to mitigate. The initiative does not allow for police department oversight in order to mitigate known public safety and public nuisance problems or issues. Section 18-615 (6) (E): requires a list of any felony convictions for any crimes of violence, larceny, or fraud which shall be grounds for disqualification as shall failure to disclose. Since the ordinance is administered by the Planning and Building Agency, no process is outlined as how to verify the information provided by the applicant which is normally a law enforcement function. Typically this is handled through a live scan process3; however, the planning and building department is not equipped with Live Scan and the initiative is silent in this regard. Section 18-618 Operating Standards: States in part that "[v]iolation of any of the following standards that rises to the level of a persistent public nuisance in fact that cannot be abated through feasible conditions of operation shall be grounds for abatement...". The initiative provides no guidelines or standards to define either s Live Scan is an automated inkless fingerprinting process. Fingerprints are electronically transmitted to the California Department of Justice (DOJ) for processing. The DOJ conducts a search of their statewide criminal database for convictions. If a Federal Bureau of Investigations (FBI) clearance is required, the prints are sent through the FBI's nationwide criminal database as well. Once the fingerprints have been processed, a report from the DOJ is mailed to the requesting agency. When and how the requesting agency receives the report is dependent upon how quickly the DOJ is able to process the fingerprints. 17 65A-23 "feasible conditions of operation" or who establishes and enforces those conditions. The failure to address foreseen and potentially preventable issues has the potential to increase Police Department and Code Enforcement activity that, given existing resources, could impact services available to the rest of the community. Section 18-618(a): Collectives and cooperatives shall meet all operating standards pursuant to the 2008 Attorney General's Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use (AG Guidelines). The AG Guidelines state in part: Security. Collectives and cooperatives should provide adequate security to ensure that patients are safe and that the surrounding homes or businesses are not negatively impacted by nuisance activity such as loitering or crime. Further, to maintain security, prevent fraud, and deter robberies, collectives and cooperatives should keep accurate records and follow accepted cash handling practices, including regular bank runs and cash drops, and maintain a general ledger of cash transactions. The initiative's reliance on the AG Guidelines does not address security and non- diversion concerns insofar as the AG Guidelines contains vague terminology such as "adequate" and "should". The AG Guidelines do not mandate or provide any basic standards to follow. The initiative's reliance on the AG Guidelines would allow the collectives to decide, without input from local law enforcement, what is adequate security. Section 18-618 (e): Addresses smoking, ingesting or consuming of medical cannabis within 50 feet of a collective on public property. This section of the initiative does not address the majority of attractive nuisance complaints that the Police Department and Code Enforcement receive regarding smoking, ingesting or consuming on private property within 50 feet of a collective. The failure to address foreseen and potentially preventable issues such as this has the continuing potential to increase Police Department and Code Enforcement staff enforcement activity due to calls for service for nuisance complaints in multi-use commercial centers. Section 18-618 (h): "The collective or cooperative shall provide and maintain adequate security on the premises, including lighting and alarms reasonably designed". This section of the initiative does not provide guidance or standards by which to measure compliance. The provision of the initiative does not establish criteria that should be standardized for the collectives to establish mitigation measures for foreseen and potentially preventable issues. The terms "adequate and reasonable" are ambiguous and open to a wide variety of interpretations. Police Enforcement & Community Preservation Conclusion The initiative as submitted would not provide an adequate enforcement structure through which known and potentially preventable public safety and public nuisance problems could be adequately addressed. To the extent that the initiative places some 18 65A-24 limitation on the number of medical marijuana dispensaries it may provide some partial mitigation of primary impacts in connection with those limited number of locations, leaving the question of secondary impacts essentially unanswered. As previously discussed, assuming the 22 registered medical cannabis dispensaries strictly comply with the requirements of the initiative, there remain substantial public safety issues associated with the presence of dispensaries, including the incompatibility with many neighboring uses, and the possibility that criminals will target dispensaries and their clients. 19 65A-25 CHAPTER 5 FISCAL IMPACTS Fiscal Impact of the Santa Ana Medical Cannabis Restriction and Limitation Act Costs Associated with Initiative Direct costs associated with the potential passage of the initiative revolve around the need to: (1) coordinate enforcement efforts and fulfill functional administrative and ministerial duties; (2) maintain an adequate enforcement program to mitigate secondary impacts in connection with registered medical marijuana dispensaries; (3) administer, audit, and collect the 2% gross cannabis business license tax; and (4) monitor proper reporting, remitting, and allocation of local sales tax The initiative's amendment of the City's Business License Tax Code (SAMC Chapter 21) to add a 2% gross receipts Cannabis Business License Tax Rate and provide for quarterly installment payments of the tax, together with its declaration that the City may claim any sales tax collected by the California State Board of Equalization gives rise to a requirement to administer and collect the Cannabis Business License Tax and to audit the reporting and remitting of both the 2% business license tax and the corresponding 8% sales tax (1 % of which is allocable to the City). Since marijuana dispensaries are by their nature primarily cash businesses, business license and sales tax audits will need to be performed at least bi-annually. Assuming 12 hours per audit, fully burdened staff time at $51.53 (plus $400 to cover vehicle, equipment, and supplies), and auditing of half or 11 registered dispensaries per year, the annual cost to the City is estimated at $7,000. The total cost to audit the 22 registered dispensaries is $14,000 for the two year period. Revenue Generation Revenue from the operation of 22 registered medical marijuana dispensaries is extrapolated from 3 sources (Exhibit 4 - Medical Marijuana Dispensaries: 2% Gross Receipts Cannabis Business License Tax / 1% Sales Tax / $500 Dispensary Registration Fee Calculation of Estimated Revenue): (1) a 2% Gross Receipts Cannabis Business License Tax, plus Business License Tax Application Processing Charge (estimated for FY 2014-15 at $32 per dispensary); 20 65A-26 (2) a $500 Medical Marijuana Dispensary Registration Application Fee (bi- annual), and (3) a 1 % local allocation of the current 8% Santa Ana California Sales Tax. To determine the revenue which may be expected from the application of the 2% gross receipts tax on medical marijuana sales by registered Santa Ana medical marijuana dispensaries it is necessary to arrive at a reasonable citywide gross medical marijuana sales figure. Since the City has no reliable source for providing this figure directly it is necessary to arrive at one by way of a comparison to other cities for which a gross sales figure is obtainable. Based on citywide per capita gross medical marijuana sales for the cities of San Francisco, Oakland, and San Jose, and imputing the average figure to Santa Ana, the resulting annual citywide gross medical marijuana sales for the City are $17.7 Million, or approximately $805,000 per registered dispensary. Applying the 2% gross receipts tax rate to this figure and adding the required application processing charge yields a business license tax assessment of about $16,100 per dispensary.4 By extending this $16,100 per dispensary business license tax assessment by 22 registered dispensaries an aggregate assessment of $354,200 is computed. Note: due to the limited number of cities for whom gross medical marijuana sales figures are obtainable these computations must be regarded as very approximate. To which a bi-annual $500 per dispensary registration fee is next added for an additional total of $11,000. (Note: comparable dispensary permit application fees in other jurisdictions with medical marijuana dispensary ordinances impose application fees as well as annual regulatory fees, e.g. City of Oakland Medical Cannabis Dispensary Permit application fee of $5,000 with an annual permit issuance and non- refundable annual regulatory fee of $60,000.) Finally, a 1 % local sales tax allocation figure may be calculated from the computed $17.7 Million in citywide gross medical marijuana sales, which yields a sales tax allocation of approximately 177 000.5 Rounding down to the nearest $10,000, the combined total of these three revenue sources equals 540 000 for FY 2014-15. This figure will vary from year to year depending on the gross sales of medical marijuana dispensaries and taking into account the bi-annual nature of the underlying medical marijuana dispensary registration fee. 4 By comparison the City of Oakland's Business Tax Ordinance imposes 5% gross receipts Cannabis Business License Tax Rate. s Beginning October 2005 the California State Board of Equalization began to issue sales tax seller's permits for the sale of medical marijuana. As the sale of medical marijuana by a medical marijuana dispensary does not generally meet all of the criteria for the exclusion provided by the BOE for the sale of medicines or medical devices (BOE Regulation 1591) medical dispensary marijuana sales may be deemed as being subject to the Santa Ana California sales tax, currently 8% with 1% allocable to Santa Ana. See generally: (BOE Special Notice - Information on Sales Tax and Registration for Medical Marijuana Sellers). 21 65A-27 Fiscal Impact Conclusion According to the Registrar of Voters, the cost of placing the initiative on the 2014 General Municipal Election is estimated at $150,000. Funds would need to be allocated in the FY 2013- 14 budget in order to meet the ballot initiative purpose. 22 65A-28 CHAPTER 6 ELECTION ISSUES This chapter will examine the timing and costs for holding an election on the Initiative measure, potential election costs associated with complying with the provisions of the Initiative in the future and the alternatives available to City Council for bringing the proposed land use initiative before the electorate. Timing and Costs for Conducting the Election on the Initiative Measure Pursuant to Charter §1201 the City of Santa Ana holds municipal elections in November of even numbered years, and they are conducted in accordance with the California Elections Code (Santa Ana Charter §1203). In the 1970's, the State Legislature authorized cities to consolidate their elections with counties as a means of conserving funds. The City of Santa Ana has chosen to consolidate the City of Santa Ana General Municipal Election with the County of Orange Statewide General Elections held in November of even numbered years. The City pays for a portion of the County's cost for conducting the election based on a percentage of its jurisdictional voters. The Orange County Registrar of Voters estimates that the cost for County services to conduct the election on this Initiative, consolidated with the County's general election on November 4, 2014, is approximately $150,000. These costs vary depending on the number of pages added to the sample ballot, the length of the proposed ordinance if it is to be included, and if there are arguments and rebuttals included. These costs do not include City-incurred costs such as publication of legal notices, the purchase of supplies, and general administration of the election. The expenses associated with placing this initiative measure on a future ballot have not been budgeted. Funds would need to be appropriated from the City's General Fund reserve to the City Clerk's Department budget to cover election-related expenses. 23 65A-29 EXHIBIT 1 TEXT OF THE SANTA ANA MEDICAL CANNABIS RESTRICTION AND LIMITATION ACT 65A-30 July 13, 2012 Santa Ana City Clerk Maria Huizar, 2012 JUL 16 Pig 4: 19 CITY _'F ' . A Ni!1 G L 11,; fir We hereby request that the Attorney for the City of Santa Ana timely prepare a title and summary for the attached Medical Cannabis Restriction and Limitation Initiative. Also attached are the "Notice of Intention to Circulate a Petition" and the "Proponent's Signed Statement Pursuant to California's Elections Code Section 9608." We authorize you to contact Kandice Hawes, the Principal Officer of the Committee to Support Medical Marijuana Ballot Initiative, 714-928-9129, when the title and summary are completed, and also please send a digital copy preferably in Microsoft Word to 4?. ? ?a7o? 65A-31 NOTICE OF INTENTION TO CIRCULATE PETITION Notice is hereby given by the persons whose names appear hereon of their intention to circulate the petition within the City of Santa Ana for the purpose of a special or regular election before the voters. A statement of the reasons of the proposed action as contemplated in the petition is as follows: The citizens and business owners of the City of Santa Ana recognize and respect the need for safe and reliable access to medical cannabis by medical cannabis patients as authorized by state law. The citizens of the City of Santa Ana wish to establish the legal operation of medical cannabis centers in the City and to designate the appropriate number and location of such Boll* - Proponent I ? 6 4 U ? b (A) Aer;c6 "P1 J.- i_y ? rJ r? r .. 65A-32 PROPONENT'S SIGNED STATEMENT PURSUANT TO CALIFORNIA ELECTION CODE SECTION 9606 We, Robyn Bollay and Guy Albert Lopez, acknowledge that it is a misdemeanor under State Law (Section 18650 of the California Elections Code) to knowingly or willingly allow the signatures on an initiative petition to be used for any purpose other then the qualification of the proposed measure for the ballot. I certify that I will not knowingly or willingly allow the signatures for this initiative to be used for any purpose other than the qualification of the measure for the ballot. n r o. C Jr ?? `0 65A-33 Signed this tZ:) day of July, 2012 THE SANTAANA MEDICAL CANNABIS RESTRICTION AND LIMITATION ACT 201.7_ JU! 15 °N r!: 19 The People of the City of Santa Ana do hereby enact and ordain as follows: CITY z -i1 t?z; THE SANTA ANA MEDICAL CANNABIS RESTRICTION AND%JMiTkTI0"CTL SECTION 1 TITLE This initiative shall be known and may be cited as The Santa Ana Medical Cannabis Restriction and Limitation Act. SECTION 2 FINDINGS AND DECLARATIONS (a) In 1996 California voters approved Proposition 215, the "Compassionate Use Act of 1996." The people of the State of California declared that their purpose in enacting the measure was, "to ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes where that medical use is deemed appropriate and has been recommended by a physician who has determined that the person's health would benefit from the use of marijuana in the treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which marijuana provides relief." (b) Proposition 215 called for plans to implement the "safe and affordable distribution of marijuana to all patients in medical need of marijuana." (c) "Cannabis" is the scientific term for "marijuana" and shall be used in the language of this Ordinance and in all other medical contexts in the City of Santa Ana. (d) We strongly support the right of patients to use medical cannabis in accordance with the recommendation or approval of a licensed physician in good standing with the Medical Board of California. (e) We strongly oppose law enforcement resources being used to arrest, prosecute, and incarcerate qualified patients who use and provide medical cannabis in accordance with the Compassionate Use Act (California Health and Safety Code section 11362.5) and Senate Bill 420 (California Health and Safety Code sections 11362.7 et. seq.). (f) Access to medical cannabis should occur in a safe and orderly manner to protect patients and the community. The absence of controlled dispensing organizations results in patients being forced to obtain their medicine in the illicit market, or incurring hardship and expense of traveling great distances to obtain their medicine from outside their community. (g) In the absence of detailed State regulation, local governments must adopt policies and regulations to protect their communities and their resident patients' safe access to their medicine. 65A-34 (h) According to the California State Board of Equalization, medical cannabis organizations contribute between $50 and $100 million dollars in sales tax to the State of California annually, and provide employment to thousands of Californians. Local municipalities, including the City of Sacramento, have passed special business tax rates for medical cannabis organizations which provide revenue used to fund much needed services such as public safety, education, and health. (i) The People of the City of Santa Ana further find and declare that we enact this initiative pursuant to the powers reserved to the State of California, the City of Santa Ana, and its People under the Tenth Amendment to the United States Constitution, as well as under the general police power of local government derived from the State's sovereignty. 0) The intent of this Ordinance is to restrict and limit the number of medical cannabis collectives and cooperatives operating or which may operate in the City of Santa Ana, but not to prohibit them. (k) The intent of the two percent gross receipts tax on medical cannabis collectives and cooperatives is for the betterment of the community. (1) The subject of this Ordinance is to determine the appropriate location of medical cannabis collectives and cooperatives. The regulation of such collectives and cooperatives may be accomplished by State law, or by any other Santa Ana voter initiative. This Ordinance cannot be amended by the City Council except as specifically provided below. SECTION 3 AMENDMENTS TO SANTA ANA MUNICIPAL CODE CHAPTER 18 ARTICLE XIII The People of the City of Santa Ana do hereby enact and ordain that Chapter 18 Article XIII of the Santa Ana Municipal Code is hereby amended to read as follows (any underlined language is new and to be inserted, any struck-through language is existing and to be deleted): 2 65A-35 Sec 18 10 - Purpose The pL ose o this ch 7-11362.83 and 11362 and Directives apter is to implem known respectiv ent alif rnia Hea ely as the Compas lth and S sionate U afety Code sections 11362.5 se Act of 1996 an the , - Medical Marijuana Pro gram Act (effecti ve 2004); and to im pose lim itations on the locatwon of facilities lawfully used for the cultivatio n, processing, stor age- and d' sensing of medical other than th cannabis e cultivation or po ssession by an ind ividual q ualified satiee t or care ie ver , at the patient or caregi ver's home The C ompassionate Use Act is th e State law removing State lawpenalties for quali and fied patients those patients' nn 'm ar; care givers. for posSeQn and cultivation of a person , al amount of med ical cannabis for q ualified p atients. The Medical Mori u na Program Ac collectively or cooopera pose of this i le t i the State lay= •vely cultivate an is also toe act re that allows qualifi d distribute medic asonable operating edpatien al canna na zon ts and caregivers to bis for and to each other The ing limitations and other restrictions applicable to the cultivation and distribution of medical cannabis based on the needs o the City of Santa An (a) This Article is i () To fulfill the pu a and its resident ntended: rpose of the Com s passionate Use Ac t to "imp lement a plan to provide or the safe and aff ordable distributi on of madj na to all patie nts in medical need of mad-*u na" in a ccord with the M edical Marijuana P rogram Act's_2umose to provide a = 11 rei l ated program for patie nts and caregivers acting co llectively or cooperatively-to cultivate and o btain medical can nabis 65A-36 65A-37 (a) "City" means the City of Santa Ana. "Cannabis" or "marijuana" means marijuana and all arts oft plant cannabis, whether growing or no ; the seeds thereof; the resin extracted fm any a o h plena; and every. compound, manufacture- salt, derivative, mixture, or preparation of the plant, its seeds or resin. It includes marijuana infused in foodstuff It does not include th mature stalks of the plant, fiber produced from stalks, oil or cake made from the seeds of the plan i_nv other compound. manufacture, salt, derivative, ix ur , or preparation of the mature sulks ( .except the resin extracted therefrom) fiber, oil, or ak , or the sterilized seeds of the plant are incapable f germination. W "Collectives" and "cooperatives" when referring to medigal cannabis organizations, both mean associations of five or more qualified patients, persons with identification cards or primary Caregivers of q alifi 12 i c nd persons with identifi a ipn cards, who assoeiate, as an inco orated or unincorporated associations to collectively or cooperatively cultivate and distribute medical cannabis for use exclusively by their registered members, in strict accordance (d) "Dire ctor" means the Execu tive Director of the Plannin g and BuildingAgenQy or his or her designee. (A) "Med ical cannabis identific ation card" a nd "identifica tion card" mean a document issued by the Sta te Department of Hea lth Services pursuant to Califomia Health and Safety Code sections 11 362.7 et seg that ide ntifies a pers on authorize d to engage On the medical use of cannabis an d the person's designat ed primary ca regiver, if an y, or identifies a person as a p itir rtt?rv caregiver f or a medical cannabis p atient, (f) "Medical cannabis transfer" means: (1) Tho transfer of medical cannabis from a 'ma caregiver tot at primary caregiv. ees qualified patient for such consideration as is su fficient to reimburse tat np •mary caregiver for the prime caregiver's out-of-po k expenses and for the primaiv caregiver's services which shall not be subject to the City's gross receipts tax; or (2) Transfers of medical cannabis among qualified patients or prim art' caregivers facilitated through an association of those qo la 'fed patients and rim Y,y caregivers who= _ be s 4 jest to the City's gross receipts operating as a cooperative or collective which shall tax_ (g) "Medical mariuana" and "medical cannabis" means cannabis that is grown;, used- and distributed pursuant to the provisions of California Health and Safety Code sections 11362.5 and 1,1362.7-11362.83, including all cannabis products, infusions, and concentrates containing the active ingredients of the cannabis Plant. 65A-38 !hl "Notice of Completed Regist ration" means a writte n notice to an applicant for collective or cooperative regis tration issue by t he director as a minest erial duty indicating tha t the an In is to ioll is c.omnlete an a 1 1 "Overhead ccurate. expenses" means u?rred all expenses i cr by the collective or coo ra ive ? including but of limited to accoun _ i ng, advertising, culti vation materials and equ i men depreciation- insu rance legal fees, mortgage payments, r ent repairs, applies, ax es, utilities, volunteer compen , sation and reimb ursements--"es, sala ries, payroll, fees paid t o comply with the requirements of this Article an d any other expennsem a ssociated with the establ ishment and operation of the c (*- "Non-profit , ollective or coop operation" mean erative, s that the collective or cooperative does not dis tribute its net retained eamingc ( 1 Mon w to any individual ith an identificati . on card" means an ind ividual who is a qualifie d patient and who has applied f or and received a valid identification ca rd pursuant to Californi a Health and Safe Code secti (1) "Primary ons 11362.7-1136 caregiver" shall h 2-83- ave the amp, definitio n as California Health a nd Safety Code sections 11362.7 et see. and as m ay be amended, and w hich defines "primary caregiver" an individual design , ated bya qualifi ed patient or v a pers on with an identificatio n card, who has , gonsisten ly assu med responsibilit y for the housing, hea lth, or saf . of that pa tient or person, and may include a licensed clinic , a licensed health ca re facility, a residents care facility, a hospice. or a ho me health agenc y as allowed by Cali fornia Health and Safet y ode section 11362.7(d)(1-3). (M) "Qualifie d patient" shall have the same def inition as California Health and S afety Code section 11362.7 et seq and as may be amended, and which states that a "Qualifie d patient" means a person „ who is entitled to the protections of California Health and Safety Code section 11362.50 but w ho does not have a valid medical cannabis identification card. (n) "Registration list" or "medical cannabis collective and cooperative registration lic_t" means the list of registered medical cannabis collectives and cooperatives maintained by tho Director. (o) _ "School" means any public or private school with students in any grade K-12. 65A-39 W Nothing in this Article shall be construed to gran any registrant any status or right o h .r than the right to be identified on the City's registration list, and to receive a Notice of Completed Regi r ion, a Certificate of Occupancy, and a gross receipts business license, and the right to assert an affirmative defense to administrativ% civil, and criminal enforcement of the City of Santa Ana Municipal Code based on conduct in compliance with this Article and with California law. A duly regisered collective or cooper ive, its members- officers, directors, mann_amrc, and employees, shall not be subject to administrative, civil o criminal sanctions based on the City of Santa Ana Municipal Code solely on the basis of conduct i compliance with this Article and 65A-40 (2) The name, maililig address, and telephone Lium (3) The cooperative or collective name and street a ber of the applicant, ddress for which registration is sought , as well as any other names under which the collec . tive ocooperative may operate, (4) Copies of the collective or cooperative's entity- formation document such ass, without li i , its Articles of Incorporation, Articles of A Membership Agr m n , etcetera. (5) A one-page description of the collective or coo ssociation, Lye operati g or perative's nature and its plans for security and non-diversion of medical cannabis. (A) Complete legal name, and a alias(es): (S) Some form of dated documentary evidence that the collective or cooperative had begun operating at the location prior t December 31, 2011, including but not limited to, a lease. a utility receipt, a State Board of Equalization Seller's Permit, or a Federal Employer Identification Number. 65A-41 Sec 18-616, - Registration Application Form, Manner, Timing. and Pri wit i 15 calendar days of the date of adopti (A) The Director shall ority Order on of this Article, create , r-gictration appli a io orm and instructions that strictly require only the information req iu red pursuant to Sec 18-515 of this Article and shall begin aceep ng applic ations on a published date within 0 calendar days of the date of adoption of this Article. (b) At least seven calendar days prior t the date the Director will b the Director shall ?p ibli on he City's w applications for registration egin =ce ing ebsite and once in a daily , newspaper of general circulation, the date, time, and manner on and in which collectives and cooperatives must submit registration application forms and the require d fee, and shall make p ubli available those forms and ins ructions at City Hall and on the (g) Each collective and cooperative shall submit with its registratio City's website. n application a required _fee pursuant to this Article. (dl As each collective and cooperative submits its registration appli cation an fee pursuant to the Director shall time-stamp the agnlication with the date this Article and time received. Seven , calendar days after the date the Director begins accepting applications, the Director shall stop ageepting applications and shall that day establish a priori. list that ide ntifies by name, address, dateand time the order in which applications were received. The order in which applications were received shall be the order in which the Director shall process the m. A collective or cooperative m may only be assigned one place on the priorilist and mu ltiple submissions will result in immediate disqualification from the registration process. (g) Within seven calendar days of establishing the priori . list, the Director shall publish the list on the City's website and once in a local_ daily newspaper o priori f general circulation. , (f) The order set fort in the priority list shall remain in effect until the priority list has been at which time- should the number of curront valid registratio exhausted ns fah below that , established by Sec. 18-512 of this Article, a new date and time will be s et for submission of additional applications following the process set forth herein - but not m ore frequently than once . eve [y 180 days. (g) Following establishment of the priorilist. the Director shall b egin processing as a ministerial duty the registration applications of collectives and coopera tives in the order established by the prioriy list. The Director shall conti nue processing a pplications until the maximum number of collective and cooperative registrations have been issued a Notice of 65A-42 (h) No cooperative's or collective's rank on tho priority lists all be assigned, transferred, or sold Any attempt to so assign, rte, or sell a priori ranking shall render the application null and void. Any Person, Q lcptE •ve, or cooper tiv p atte tin to o assiU. transfer, or sell a priority ranking and any erson, collective, or cooperatiye attempting to_acQuire a_nriorilr ranking outside the ron visiops set forth herein shall be immediately disqualified from the registration Sec. 18-617. - Issuance and Renewal of Registration The applicant has failed to provide information reasonably necessary for processing hie. registration application or has knowingly answered an application question or request for information falsely.; or (4) No California State Board of Equalization Seller's PCtnnit has been granted for the applicant collective or cooperatives or 10 65A-43 (a) Collectives and cooperatives shall meet all the op .rat' gstandards for the dispensing medical cannabis ten iL red pursuant to California Health and Safety Code sections Ii362 5 and 11362.7 et seq., by this Article and by the 2008 Attorney General' Guidelines for the Security and Non-Diversion of Mad.juana Grown for Medical Ilse- 11 65A-44 (g) In order to protect confdentiality; the collective or cooperative may maintain records all qualified patients with a valid identification card and primary caregivers with a valid identification card using only the identification caul number issued by the State or County pursuant to California Health a_nd Safety CQdc section 11362.7 et sea (k) A sign shall he posted inside colip ewes and coQ ratiyes, stafingu,nYaQlwy "The diversion of cannabis for non-medical purposes is a violation of State law Loitering at the location of a medical cannabis dispensing Qollective for an illcual - mole is prohibited by 12 65A-45 California Penal Code section 647(h). No medical cannabis shall be smoked, ingested a otherwise consumed in the public right-of-wav within fifty (50) feet of a medical cannabis collective or cooperative." Such sign shall be printed in 14-point font or larger upon 8 1/z by 11 piper and posted at some conspicuous part of such si lh A d di ib .r O r r a , M O an stf .,t=o=. o= a of this . -Affi .t e is to pfeh':t meth "'1 .« r rdispe d F '1 ?? ,, r th '•+'1 o=O. (Ofd. No. NS 2758, s 2, 11 5 07) -moll - i - `T` MVTV T 7 }I 11 ' (b) Unlegs ethepMse r ob wed by t .AtO his shaptef rl a t 1 Cam' 9pplir. le Fn lw*, a med4va ft C lig l r +a i .. Swede; r p a am a cede; Galifemia Health a nd Sagoty Co de; 13 65A-46 . (d) A41 tems use d in this seefie n ifiel udin b ut ne t limit ed te „ i " " lifi d , g Har- jua na-, qua e ie r3 "ideff fie n mien a&F an " i d ' ' " h ll b fi d d i Ga4 t t f , t "a cnr . C d , fi 11362 5 °' n ° flt -Bft F@g}i £ , ? s a e eas ne n i- `te ; i y f LiiM RJii1 V e e s ee en . • (Or- N N S 2758§ 1 1.5.07 ) o It shall be tiala wf l for- m - - tit t u y per son own, ma or en y o nage, medioal maf?u ana dispensary or- to paoieipeAe as an > eefif ffieter-, ageM of ve4unt ^ i vi, v u J vui , (04 Ne NS 27 2 11 5 07 . -,, § ,,- ) SECTION 4 AMENDMENTS TO SANTA ANA MUNICIPAL CODE SECTION 41-121 The People of the City of Santa Ana do hereby enact and ordain that Section 41-121 of the Santa Ana Municipal Code is hereby repealed and deleted in its entirety (all existing language to be deleted is struck-through as follows): MORJURREk 19 Mel €elleWiRgL ds aya-iAle to, l 9) ° i..a 14 65A-47 Safety 69de-, 14eaM and Safety Gede? l 4 " ° side. i f nilit f ' r4 eld th heen d nt t C ha ter- 34 ef the e a ) y e e y e p se o p li ith bl l k li l di b t n t li ited t G 4fam i HeaM and Safet eemp es w app e aw, i ea e u ng u o m e a a y Health and Safety Cede seefien SECTION 5 AMENDMENTS TO SANTA ANA MUNICIPAL CODE SECTION 41-144 The People of the City of Santa Ana do hereby enact and ordain that Section 41-144 of the Santa Ana Municipal Code is hereby amended to read as follows (any underlined language is new and to be inserted, any struck-through language is existing and to be deleted): Sec. 41-144. - Retail and service uses. Retail and service uses include any use of property for the purpose of offering merchandise or services to the public for compensation, and include banks, savings and loan associations, and similar financial institutions, but do not include the following: (a) Sheet metal shops, body-fender works, automobile paint shops, repair garages, and any activity which includes the processing, treatment, manufacturing, assembling or compounding of 15 65A-48 any product, other than that which is clearly and traditionally incidental and essential to a particular retail activity. 0?? (e) A hookah parlor as defined in section 41-73.5 of this Code. (a (d)Any use which is more specifically identified as a permitted use or as a use which may be permitted subject to the issuance of a conditional use permit in one or more use districts pursuant to Article III of this chapter. SECTION 6 AMENDMENTS TO SANTA ANA MUNICIPAL CODE SECTION 21-119 The People of the City of Santa Ana do hereby enact and ordain that Section 21-119 of the Santa Ana Municipal Code is hereby amended to read as follows (any underlined language is new and to be inserted, any struck-through language is existing and to be deleted): Sec. 21-119. - Gross receipts tax rates. Gross receipts tax rates for the different classifications are as follows: (1) Classification "A"-All businesses for which no tax is specified elsewhere in this Article, including, but not limited to: retail businesses and sales at retail, services (including real estate brokers, real estate developers, insurance brokers, life and disability insurance analysts, stock and bond brokers, commission agents, brokers or merchants, building and loans, and recreational services), hotels, motels, theaters, and food establishments: For each separate place of business licensed, a basic rate of $60.00, plus: $0.50 per $1,000.00 to.....$100,000.00 0.30 per 1,000.00 to .....500,000.00 0.20 per 1,000.00 to .....1,000,000.00 0.15 per 1,000.00 over .....1,000,000.00 (2) Classification'B"-Manufacturing, processing, wholesale businesses and sales at wholesale, sales of gasoline and motor fuels, and telephone services: For each separate place of business licensed, a basic rate of $60.00, plus: $0.30 per $1,000.00 to .....$100,000.00 0.25 per 1,000.00 to .....300,000.00 0.20 per 1,000.00 to .....600,000.00 0.15 per 1,000.00 to .....1 ,000,000.00 16 65A-49 0.10 per 1,000.00 over .....1,000,000.00 (3) Classification "C"-Rental of commercial real estate: For the first property location licensed, a basic rate of $60.00, plus: $0.50 per $1,000.00 to .....$100,000.00 0.30 per 1,000.00 to .....$500,000.00 0.20 per 1,000.00 to .....1,000,000.00 0.15 per 1,000.00 over..... 1,000,000.00 For each additional property location licensed, a basic rate of $10.00, plus: $0.50 per $1,000.00 to .....$100,000.00 0.30 per 1,000.00 to .....$500,000.00 0.20 per 1,000.00 to .....1,000,000.00 0.15 per 1,000.00 over..... 1,000,000.00 (4) Classification "D"-Junk yards, automobile wrecking yards and salvage yards; junk dealers, junk collectors, automobile dismantlers, junk salvagers, and junk recyclers: For each separate place of business licensed, a basic rate of $100.00, plus: $0.50 per $1,000.00 to .....$100,000.00 0.30 per 1,000.00 to .....500,000.00 0.20 per 1,000.00 to .....1,000,000.00 0.15 per 1,000.00 over .....1,000,000.00 (5) Classification "F"-cannabis businesses: Fort the purpose of this Section, "cannabis business" means business tivity including- but not limited to, planting, cultivation. ha rvesting manufacturing transporting compounding, converting, processing, pre , , , packaging- wholesale paring storing and/or retail sales of marii ,Lana_ any pa of he pl , . , ant Cannabis sativa L. or its derivatives Tt specifically include medical cannabis tra nsfers by collectives and cooperatives- and it specifically excludes medical cannabis tra nsfers by prime caregivers to their qualified patients as defined in Chanter 18 Article MH of this Code 17 65A-50 (d) This tax shall be payable in quarterly installment payments y any oKganization falling under thia Classification "E" SECTION 7 INITIATIVE NOT TO BE AMENDED OTHER THAN BY VOTERS This initiative ordinance and every part thereof can only be amended by the Voters of the City of Santa Ana and cannot be amended by the Santa Ana City Council except as specifically provided above. SECTION 8 SPECIAL OR REGULAR ELECTION The Voters of the City of Santa Ana hereby expressly request that this initiative ordinance be set for a special or regular election at the earliest time allowable by law. SECTION 9 SEVERABILITY Should any provision of this initiative ordinance, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, voidable, or invalid, that determination shall have no effect on any other provision, or the application of this initiative ordinance to any other person or circumstance and, to that end, the provisions hereof are severable. By approving this ordinance the voters intend that each section and sub-section be explictly severable, part-by-part, phrase-by-phrase, and word-by-word, thus that the minimum language held invalid be severed. 18 65A-51 EXHIBIT 2 POTENTIAL LOCATION MAP 65A-52 65A-53 EXHIBIT 3 WHITE PAPER 65A-54 WHITE PAPER ON MARIJUANA DISPENSARIES by CALIFORNIA POLICE CHIEFS ASSOCIATION'S TASK FORCE ON MARIJUANA DISPENSARIES © 2009 California Police Chiefs Assn. All Rights Reserved 65A-55 ACKNOWLEDGMENTS Beyond any question, this White Paper is the product of a major cooperative effort among representatives of numerous law enforcement agencies and allies who share in common the goal of bringing to light the criminal nexus and attendant societal problems posed by marijuana dispensaries that until now have been too often hidden in the shadows. The critical need for this project was first recognized by the California Police Chiefs Association, which put its implementation in the very capable hands of CPCA's Executive Director Leslie McGill, City of Modesto Chief of Police Roy Wasden, and City of El Cerrito Chief of Police Scott Kirkland to spearhead. More than 30 people contributed to this project as members of CPCA's Medical Marijuana Dispensary Crime/Impact Issues Task Force, which has been enjoying the hospitality of Sheriff John McGinnis at regular meetings held at the Sacramento County Sheriff's Department's Headquarters Office over the past three years about every three months. The ideas for the White Paper's components came from this group, and the text is the collaborative effort of numerous persons both on and off the task force. Special mention goes to Riverside County District Attorney Rod Pacheco and Riverside County Deputy District Attorney Jacqueline Jackson, who allowed their Office's fine White Paper on Medical Marijuana: History and Current Complications to be utilized as a partial guide, and granted permission to include material from that document. Also, Attorneys Martin Mayer and Richard Jones of the law firm of Jones & Mayer are thanked for preparing the pending legal questions and answers on relevant legal issues that appear at the end of this White Paper. And, I thank recently retired San Bernardino County Sheriff Gary Penrod for initially assigning me to contribute to this important work. Identifying and thanking everyone who contributed in some way to this project would be well nigh impossible, since the cast of characters changed somewhat over the years, and some unknown individuals also helped meaningfully behind the scenes. Ultimately, developing a White Paper on Maryuana Dispensaries became a rite of passage for its creators as much as a writing project. At times this daunting, and sometimes unwieldy, multi-year project had many task force members, including the White Paper's editor, wondering if a polished final product would ever really reach fruition. But at last it has! If any reader is enlightened and spurred to action to any degree by the White Paper's important and timely subject matter, all of the work that went into this collaborative project will have been well worth the effort and time expended by the many individuals who worked harmoniously to make it possible. Some of the other persons and agencies who contributed in a meaningful way to this group venture over the past three years, and deserve acknowledgment for their helpful input and support, are: George Anderson, California Department of Justice Jacob Appelsmith, Office of the California Attorney General John Avila, California Narcotics Officers Association Phebe Chu, Office of San Bernardino County Counsel Scott Collins, Los Angeles County District Attorney's Office Cathy Coyne, California State Sheriffs' Association Lorrac Craig, Trinity County Sheriffs Department Jim Denney, California State Sheriffs' Association Thomas Dewey, California State University-Humboldt Police Department Dana Filkowski, Contra Costa County District Attorney's Office John Gaines, California Department of Justice/Bureau of Narcotics Enforcement Craig Gundlach, Modesto Police Department John Harlan, Los Angeles County District Attorney's Office-Major Narcotics Division © 2009 California Police Chiefs Assn All Rights Reserved 65A-56 Nate Johnson, California State University Police Mike Kanalakis, Monterey County Sheriffs Office Bob Kochly, Contra Costa County Office of District Attorney Tommy LaNier, The National Marijuana Initiative, HIDTA Carol Leveroni, California Peace Officers Association Kevin McCarthy, Los Angeles Police Department Randy Mendoza, Arcata Police Department Mike Nivens, California Highway Patrol Rick Oules, Office of the United States Attorney Mark Pazin, Merced County Sheriffs Department Michael Regan, El Cerrito Police Department Melissa Reisinger, California Police Chiefs Association Kimberly Rios, California Department of Justice, Conference Planning Unit Kent Shaw, California Department of Justice/Bureau of Narcotics Enforcement Crystal Spencer, California Department of Justice, Conference Planning Unit Sam Spiegel, Folsom Police Department Valerie Taylor, ONDCP Thomas Toller, California District Attorneys Association Martin Vranicar, Jr., California District Attorneys Association April 22, 2009 Dennis Tilton, Editor © 2009 California Police Chiefs Assn All Rights Reserved 65A-57 TABLE OF CONTENTS Pages ACKNOWLEDGMENTS ...................................................... i-ii EXECUTIVE SUMMARY ......................................................iv-vi WHITE PAPER ON MARIJUANA DISPENSARIES INTRODUCTION ............................................................1 FEDERAL LAW ..............................................................1-2 CALIFORNIA LAW ...........................................................2-6 LAWS IN OTHER STATES .....................................................6 STOREFRONT MARIJUANA DISPENSARIES AND COOPERATIVES ................6-7 HOW EXISTING DISPENSARIES OPERATE ......................................7-8 ADVERSE SECONDARY EFFECTS OF MARIJUANA DISPENSARIES AND SIMILARLY OPERATING COOPERATIVES .................................8 ANCILLARY CRIMES .........................................................8-10 OTHER ADVERSE SECONDARY IMPACTS IN THE IMMEDIATE VICINITY OF DISPENSARIES ..............................................................11 SECONDARY ADVERSE IMPACTS IN THE COMMUNITY AT LARGE .. ............ 11-14 ULTIMATE CONCLUSIONS REGARDING ADVERSE SECONDARY EFFECTS ........ 14 POSSIBLE LOCAL GOVERNMENTAL RESPONSES TO MARIJUANA DISPENSARIES. 14-17 LIABILITY ISSUES ...........................................................18-19 A SAMPLING OF EXPERIENCES WITH MARIJUANA DISPENSARIES ...............19-30 PENDING LEGAL QUESTIONS .................................................31-39 CONCLUSIONS ..............................................................40 ENDNOTES ..................................................................41-44 NON-LEGAL REFERENCES ....................................................45-49 © 2009 California Police Chiefs Assn. III All Rights Reserved 65A-58 WHITE PAPER ON MARIJUANA DISPENSARIES by CALIFORNIA POLICE CHIEFS ASSOCIATION'S TASK FORCE ON MARIJUANA DISPENSARIES EXECUTIVE SUMMARY INTRODUCTION Proposition 215, an initiative authorizing the limited possession, cultivation, and use of marijuana by patients and their care providers for certain medicinal purposes recommended by a physician without subjecting such persons to criminal punishment, was passed by California voters in 1996. This was supplemented by the California State Legislature's enactment in 2003 of the Medical Marijuana Program Act (SB 420) that became effective in 2004. The language of Proposition 215 was codified in California as the Compassionate Use Act, which added section 11362.5 to the California Health & Safety Code. Much later, the language of Senate Bill 420 became the Medical Marijuana Program Act (MMPA), and was added to the California Health & Safety Code as section 11362.7 et seq. Among other requirements, it purports to direct all California counties to set up and administer a voluntary identification card system for medical marijuana users and their caregivers. Some counties have already complied with the mandatory provisions of the MMPA, and others have challenged provisions of the Act or are awaiting outcomes of other counties' legal challenges to it before taking affirmative steps to follow all of its dictates. And, with respect to marijuana dispensaries, the reaction of counties and municipalities to these nascent businesses has been decidedly mixed. Some have issued permits for such enterprises. Others have refused to do so within their jurisdictions. Still others have conditioned permitting such operations on the condition that they not violate any state or federal law, or have reversed course after initially allowing such activities within their geographical borders by either limiting or refusing to allow any further dispensaries to open in their community. This White Paper explores these matters, the apparent conflicts between federal and California law, and the scope of both direct and indirect adverse impacts of marijuana dispensaries in local communities. It also recounts several examples that could be emulated of what some governmental officials and law enforcement agencies have already instituted in their jurisdictions to limit the proliferation of marijuana dispensaries and to mitigate their negative consequences. FEDERAL LAW Except for very limited and authorized research purposes, federal law through the Controlled Substances Act absolutely prohibits the use of marijuana for any legal purpose, and classifies it as a banned Schedule I drug. It cannot be legally prescribed as medicine by a physician. And, the federal regulation supersedes any state regulation, so that under federal law California medical marijuana statutes do not provide a legal defense for cultivating or possessing marijuana-even with a physician's recommendation for medical use. © 2009 California Police Chiefs Assn. iv All Rights Reserved 65A-59 CALIFORNIA LAW Although California law generally prohibits the cultivation, possession, transportation, sale, or other transfer of marijuana from one person to another, since late 1996 after passage of an initiative (Proposition 215) later codified as the Compassionate Use Act, it has provided a limited affirmative defense to criminal prosecution for those who cultivate, possess, or use limited amounts of marijuana for medicinal purposes as qualified patients with a physician's recommendation or their designated primary caregiver or cooperative. Notwithstanding these limited exceptions to criminal culpability, California law is notably silent on any such available defense for a storefront marijuana dispensary, and California Attorney General Edmund G. Brown, Jr. has recently issued guidelines that generally find marijuana dispensaries to be unprotected and illegal drug-trafficking enterprises except in the rare instance that one can qualify as a true cooperative under California law. A primary caregiver must consistently and regularly assume responsibility for the housing, health, or safety of an authorized medical marijuana user, and nowhere does California law authorize cultivating or providing marijuana-medical or non-medical-for profit. California's Medical Marijuana Program Act (Senate Bill 420) provides further guidelines for mandated county programs for the issuance of identification cards to authorized medical marijuana users on a voluntary basis, for the chief purpose of giving them a means of certification to show law enforcement officers if such persons are investigated for an offense involving marijuana. This system is currently under challenge by the Counties of San Bernardino and San Diego and Sheriff Gary Penrod, pending a decision on review by the U.S. Supreme Court, as is California's right to permit any legal use of marijuana in light of federal law that totally prohibits any personal cultivation, possession, sale, transportation, or use of this substance whatsoever, whether for medical or non-medical purposes. PROBLEMS POSED BY MARIJUANA DISPENSARIES Marijuana dispensaries are commonly large money-making enterprises that will sell marijuana to most anyone who produces a physician's written recommendation for its medical use. These recommendations can be had by paying unscrupulous physicians a fee and claiming to have most any malady, even headaches. While the dispensaries will claim to receive only donations, no marijuana will change hands without an exchange of money. These operations have been tied to organized criminal gangs, foster large grow operations, and are often multi-million-dollar profit centers. Because they are repositories of valuable marijuana crops and large amounts of cash, several operators of dispensaries have been attacked and murdered by armed robbers both at their storefronts and homes, and such places have been regularly burglarized. Drug dealing, sales to minors, loitering, heavy vehicle and foot traffic in retail areas, increased noise, and robberies of customers just outside dispensaries are also common ancillary byproducts of their operations. To repel store invasions, firearms are often kept on hand inside dispensaries, and firearms are used to hold up their proprietors. These dispensaries are either linked to large marijuana grow operations or encourage home grows by buying marijuana to dispense. And, just as destructive fires and unhealthful mold in residential neighborhoods are often the result of large indoor home grows designed to supply dispensaries, money laundering also naturally results from dispensaries' likely unlawful operations. © 2009 California Police Chiefs Assn. V All Rights Reserved 65A-60 LOCAL GOVERNMENTAL RESPONSES Local governmental bodies can impose a moratorium on the licensing of marijuana dispensaries while investigating this issue; can ban this type of activity because it violates federal law; can use zoning to control the dispersion of dispensaries and the attendant problems that accompany them in unwanted areas; and can condition their operation on not violating any federal or state law, which is akin to banning them, since their primary activities will always violate federal law as it now exists- and almost surely California law as well. LIABILITY While highly unlikely, local public officials, including county supervisors and city council members, could potentially be charged and prosecuted for aiding and abetting criminal acts by authorizing and licensing marijuana dispensaries if they do not qualify as "cooperatives" under California law, which would be a rare occurrence. Civil liability could also result. ENFORCEMENT OF MARIJUANA LAWS While the Drug Enforcement Administration has been very active in raiding large-scale marijuana dispensaries in California in the recent past, and arresting and prosecuting their principals under federal law in selective cases, the new U.S. Attorney General, Eric Holder, Jr., has very recently announced a major change of federal position in the enforcement of federal drug laws with respect to marijuana dispensaries. It is to target for prosecution only marijuana dispensaries that are exposed as fronts for drug trafficking. It remains to be seen what standards and definitions will be used to determine what indicia will constitute a drug trafficking operation suitable to trigger investigation and enforcement under the new federal administration. Some counties, like law enforcement agencies in the County of San Diego and County of Riverside, have been aggressive in confronting and prosecuting the operators of marijuana dispensaries under state law. Likewise, certain cities and counties have resisted granting marijuana dispensaries business licenses, have denied applications, or have imposed moratoria on such enterprises. Here, too, the future is uncertain, and permissible legal action with respect to marijuana dispensaries may depend on future court decisions not yet handed down. Largely because the majority of their citizens have been sympathetic and projected a favorable attitude toward medical marijuana patients, and have been tolerant of the cultivation and use of marijuana, other local public officials in California cities and counties, especially in Northern California, have taken a "hands off' attitude with respect to prosecuting marijuana dispensary operators or attempting to close down such operations. But, because of the life safety hazards caused by ensuing fires that have often erupted in resultant home grow operations, and the violent acts that have often shadowed dispensaries, some attitudes have changed and a few political entities have reversed course after having previously licensed dispensaries and authorized liberal permissible amounts of marijuana for possession by medical marijuana patients in their jurisdictions. These "patients" have most often turned out to be young adults who are not sick at all, but have secured a physician's written recommendation for marijuana use by simply paying the required fee demanded for this document without even first undergoing a physical examination. Too often "medical marijuana" has been used as a smokescreen for those who want to legalize it and profit off it, and storefront dispensaries established as cover for selling an illegal substance for a lucrative return. © 2009 California Police Chiefs Assn. Vi All Rights Reserved 65A-61 WHITE PAPER ON MARIJUANA DISPENSARIES by CALIFORNIA POLICE CHIEFS ASSOCIATION Editor: Dennis Tilton, M.A.Ed., M.A.Lit., M.C.J., J.D. Adjunct Professor of Criminal Justice, Political Science, & Public Administration, Upper Iowa University Sheriff's Legal Counsel (Retired), San Bernardino County Sheriff's Department INTRODUCTION In November of 1996, California voters passed Proposition 215. The initiative set out to make marijuana available to people with certain illnesses. The initiative was later supplemented by the Medical Marijuana Program Act. Across the state, counties and municipalities have varied in their responses to medical marijuana. Some have allowed businesses to open and provide medical marijuana. Others have disallowed all such establishments within their borders. Several once issued business licenses allowing medical marijuana stores to operate, but no longer do so. This paper discusses the legality of both medical marijuana and the businesses that make it available, and more specifically, the problems associated with medical marijuana and marijuana dispensaries, under whatever name they operate. FEDERAL LAW Federal law clearly and unequivocally states that all marijuana-related activities are illegal. Consequently, all people engaged in such activities are subject to federal prosecution. The United States Supreme Court has ruled that this federal regulation supersedes any state's regulation of marijuana - even California's. (Gonzales v. Raich (2005) 125 S.Ct. 2195, 2215.) "The Supremacy Clause unambiguously provides that if there is any conflict between federal law and state law, federal law shall prevail." (Gonzales v. Raich, supra.) Even more recently, the 9ch Circuit Court of Appeals found that there is no fundamental right under the United States Constitution to even use medical marijuana. (Raich v. Gonzales (9th Cir. 2007) 500 F.3d 850, 866.) In Gonzales v. Raich, the High Court declared that, despite the attempts of several states to partially legalize marijuana, it continues to be wholly illegal since it is classified as a Schedule I drug under federal law. As such, there are no exceptions to its illegality. (21 USC secs. 812(c), 841(a)(1).) Over the past thirty years, there have been several attempts to have marijuana reclassified to a different schedule which would permit medical use of the drug. All of these attempts have failed. (See Gonzales v. Raich (2005) 125 S.Ct. 2195, fn 23.) The mere categorization of marijuana as "medical" by some states fails to carve out any legally recognized exception regarding the drug. Marijuana, in any form, is neither valid nor legal. Clearly the United States Supreme Court is the highest court in the land. Its decisions are final and binding upon all lower courts. The Court invoked the United States Supremacy Clause and the Commerce Clause in reaching its decision. The Supremacy Clause declares that all laws made in pursuance of the Constitution shall be the "supreme law of the land" and shall be legally superior to any conflicting provision of a state constitution or law. I The Commerce Clause states that "the © 2009 California Police Chiefs Assn. All Rights Reserved 65A-62 Congress shall have power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."2 Gonzales v. Raich addressed the concerns of two California individuals growing and using marijuana under California's medical marijuana statute. The Court explained that under the Controlled Substances Act marijuana is a Schedule I drug and is strictly regulated.3 "Schedule I drugs are categorized as such because of their high potential for abuse, lack of any accepted medical use, and absence of any accepted safety for use in medically supervised treatment. ,4 (21 USC sec. 812(b)(1).) The Court ruled that the Commerce Clause is applicable to California individuals growing and obtaining marijuana for their own personal, medical use. Under the Supremacy Clause, the federal regulation of marijuana, pursuant to the Commerce Clause, supersedes any state's regulation, including California's. The Court found that the California statutes did not provide any federal defense if a person is brought into federal court for cultivating or possessing marijuana. Accordingly, there is no federal exception for the growth, cultivation, use or possession of marijuana and all such activity remains illegal.5 California's Compassionate Use Act of 1996 and Medical Marijuana Program Act of 2004 do not create an exception to this federal law. All marijuana activity is absolutely illegal and subject to federal regulation and prosecution. This notwithstanding, on March 19, 2009, U.S. Attorney General Eric Holder, Jr. announced that under the new Obama Administration the U.S. Department of Justice plans to target for prosecution only those marijuana dispensaries that use medical marijuana dispensing as a front for dealers of illegal drugs.b CALIFORNIA LAW Generally, the possession, cultivation, possession for sale, transportation, distribution, furnishing, and giving away of marijuana is unlawful under California state statutory law. (See Cal. Health & Safety Code secs. 11357-11360.) But, on November 5, 1996, California voters adopted Proposition 215, an initiative statute authorizing the medical use of marijuana.7 The initiative added California Health and Safety code section 11362.5, which allows "seriously ill Californians the right to obtain and use marijuana for medical purposes where that medical use is deemed appropriate and has been recommended by a physician ...."8 The codified section is known as the Compassionate Use Act of 1996.9 Additionally, the State Legislature passed Senate Bill 420 in 2003. It became the Medical Marijuana Program Act and took effect on January 1, 2004.10 This act expanded the definitions of "patient" and "primary caregiver" 11 and created guidelines for identification cards.12 It defined the amount of marijuana that "patients," and "primary caregivers" can possess. 13 It also created a limited affirmative defense to criminal prosecution for qualifying individuals that collectively gather to cultivate medical marijuana, 14 as well as to the crimes of marijuana possession, possession for sale, transportation, sale, furnishing, cultivation, and maintenance of places for storage, use, or distribution of marijuana for a person who qualifies as a "patient," a "primary caregiver," or as a member of a legally recognized "cooperative," as those terms are defined within the statutory scheme. Nevertheless, there is no provision in any of these laws that authorizes or protects the establishment of a "dispensary" or other storefront marijuana distribution operation. Despite their illegality in the federal context, the medical marijuana laws in California are specific. The statutes craft narrow affirmative defenses for particular individuals with respect to enumerated marijuana activity. All conduct, and people engaging in it, that falls outside of the statutes' parameters remains illegal under California law. Relatively few individuals will be able to assert the affirmative defense in the statute. To use it a person must be a "qualified patient," "primary caregiver," or a member of a "cooperative." Once they are charged with a crime, if a person can prove an applicable legal status, they are entitled to assert this statutory defense. © 2009 California Police Chiefs Assn. 2 All Rights Reserved 65A-63 Former California Attorney General Bill Lockyer has also spoken about medical marijuana, and strictly construed California law relating to it. His office issued a bulletin to California law enforcement agencies on June 9, 2005. The office expressed the opinion that Gonzales v. Raich did not address the validity of the California statutes and, therefore, had no effect on California law. The office advised law enforcement to not change their operating procedures. Attorney General Lockyer made the recommendation that law enforcement neither arrest nor prosecute "individuals within the legal scope of California's Compassionate Use Act." Now the current California Attorney General, Edmund G. Brown, Jr., has issued guidelines concerning the handling of issues relating to California's medical marijuana laws and marijuana dispensaries. The guidelines are much tougher on storefront dispensaries-generally finding them to be unprotected, illegal drug-trafficking enterprises if they do not fall within the narrow legal definition of a "cooperative"-than on the possession and use of marijuana upon the recommendation of a physician. When California's medical marijuana laws are strictly construed, it appears that the decision in Gonzales v. Raich does affect California law. However, provided that federal law does not preempt California law in this area, it does appear that the California statutes offer some legal protection to "individuals within the legal scope of the acts. The medical marijuana laws speak to patients, primary caregivers, and true collectives. These people are expressly mentioned in the statutes, and, if their conduct comports to the law, they may have some state legal protection for specified marijuana activity. Conversely, all marijuana establishments that fall outside the letter and spirit of the statutes, including dispensaries and storefront facilities, are not legal. These establishments have no legal protection. Neither the former California Attorney General's opinion nor the current California Attorney General's guidelines present a contrary view. Nevertheless, without specifically addressing marijuana dispensaries, Attorney General Brown has sent his deputies attorney general to defend the codified Medical Marijuana Program Act against court challenges, and to advance the position that the state's regulations promulgated to enforce the provisions of the codified Compassionate Use Act (Proposition 215), including a statewide database and county identification card systems for marijuana patients authorized by their physicians to use marijuana, are all valid. 1. Conduct California Health and Safety Code sections 11362.765 and 11362.775 describe the conduct for which the affirmative defense is available. If a person qualifies as a "patient," "primary caregiver," or is a member of a legally recognized "cooperative," he or she has an affirmative defense to possessing a defined amount of marijuana. Under the statutes no more than eight ounces of dried marijuana can be possessed. Additionally, either six mature or twelve immature plants may be possessed. 15 If a person claims patient or primary caregiver status, and possesses more than this amount of marijuana, he or she can be prosecuted for drug possession. The qualifying individuals may also cultivate, plant, harvest, dry, and/or process marijuana, but only while still strictly observing the permitted amount of the drug. The statute may also provide a limited affirmative defense for possessing marijuana for sale, transporting it, giving it away, maintaining a marijuana house, knowingly providing a space where marijuana can be accessed, and creating a narcotic nuisance. 16 However, for anyone who cannot lay claim to the appropriate status under the statutes, all instances of marijuana possession, cultivation, planting, harvesting, drying, processing, possession for the purposes of sales, completed sales, giving away, administration, transportation, maintaining of marijuana houses, knowingly providing a space for marijuana activity, and creating a narcotic nuisance continue to be illegal under California law. © 2009 California Police Chiefs Assn. 3 All Rights Reserved 65A-64 2. Patients and Cardholders A dispensary obviously is not a patient or cardholder. A "qualified patient" is an individual with a physician's recommendation that indicates marijuana will benefit the treatment of a qualifying illness. (Cal. H&S Code secs. 11362.5(b)(1)(A) and 11362.7(f).) Qualified illnesses include cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which marijuana provides reliefs' A physician's recommendation that indicates medical marijuana will benefit the treatment of an illness is required before a person can claim to be a medical marijuana patient. Accordingly, such proof is also necessary before a medical marijuana affirmative defense can be claimed. A "person with an identification card" means an individual who is a qualified patient who has applied for and received a valid identification card issued by the State Department of Health Services. (Cal. H&S Code secs. 11362.7(c) and 11362.7(g).) 3. Primary Caregivers The only person or entity authorized to receive compensation for services provided to patients and cardholders is a primary caregiver. (Cal. H&S Code sec. 11362.77(c).) However, nothing in the law authorizes any individual or group to cultivate or distribute marijuana for profit. (Cal. H&S Code sec. 11362.765(a).) It is important to note that it is almost impossible for a storefront marijuana business to gain true primary caregiver status. Businesses that call themselves "cooperatives," but function like storefront dispensaries, suffer this same fate. In People v. Mower, the court was very clear that the defendant had to prove he was a primary caregiver in order to raise the medical marijuana affirmative defense. Mr. Mower was prosecuted for supplying two people with marijuana. 18 He claimed he was their primary caregiver under the medical marijuana statutes. This claim required him to prove he "consistently had assumed responsibility for either one's housing, health, or safety" before he could assert the defense. 19 (Emphasis added.) The key to being a primary caregiver is not simply that marijuana is provided for a patient's health; the responsibility for the health must be consistent; it must be independent of merely providing marijuana for a qualified person; and such a primary caregiver-patient relationship must begin before or contemporaneously with the time of assumption of responsibility for assisting the individual with marijuana. (People v. Mentch (2008) 45 CalAth 274, 283.) Any relationship a storefront marijuana business has with a patient is much more likely to be transitory than consistent, and to be wholly lacking in providing for a patient's health needs beyond just supplying him or her with marijuana. A "primary caregiver" is an individual or facility that has "consistently assumed responsibility for the housing, health, or safety of a patient" over time. (Cal. H&S Code sec. 11362.5(e).) "Consistency" is the key to meeting this definition. A patient can elect to patronize any dispensary that he or she chooses. The patient can visit different dispensaries on a single day or any subsequent day. The statutory definition includes some clinics, health care facilities, residential care facilities, and hospices. But, in light of the holding in People v. Mentch, supra, to qualify as a primary caregiver, more aid to a person's health must occur beyond merely dispensing marijuana to a given customer. Additionally, if more than one patient designates the same person as the primary caregiver, all individuals must reside in the same city or county. And, in most circumstances the primary caregiver must be at least 18 years of age. © 2009 California Police Chiefs Assn. 4 All Rights Reserved 65A-65 The courts have found that the act of signing a piece of paper declaring that someone is a primary caregiver does not necessarily make that person one. (See People ex rel. Lungren v. Peron (1997) 59 Cal.AppAth 1383, 1390: "One maintaining a source of marijuana supply, from which all members of the public qualified as permitted medicinal users may or may not discretionarily elect to make purchases, does not thereby become the party `who has consistently assumed responsibility for the housing, health, or safety' of that purchaser as section 11362.5(e) requires.") The California Legislature had the opportunity to legalize the existence of dispensaries when setting forth what types of facilities could qualify as "primary caregivers." Those included in the list clearly show the Legislature's intent to restrict the definition to one involving a significant and long-term commitment to the patient's health, safety, and welfare. The only facilities which the Legislature authorized to serve as "primary caregivers" are clinics, health care facilities, residential care facilities, home health agencies, and hospices which actually provide medical care or supportive services to qualified patients. (Cal. H&S Code sec. 11362.7(d)(1).) Any business that cannot prove that its relationship with the patient meets these requirements is not a primary caregiver. Functionally, the business is a drug dealer and is subject to prosecution as such. 4. Cooperatives and Collectives According to the California Attorney General's recently issued Guidelines for the Security and Non- Diversion of MarYuana Grown for Medical Use, unless they meet stringent requirements, dispensaries also cannot reasonably claim to be cooperatives or collectives. In passing the Medical Marijuana Program Act, the Legislature sought, in part, to enhance the access of patients and caregivers to medical marijuana through collective, cooperative cultivation programs. (People v. Urziceanu (2005) 132 Cal.App.4th 747, 881.) The Act added section 11362.775, which provides that "Patients and caregivers who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes, shall not solely on the basis of that fact be subject to state criminal sanctions" for the crimes of marijuana possession, possession for sale, transportation, sale, furnishing, cultivation, and maintenance of places for storage, use, or distribution of marijuana. However, there is no authorization for any individual or group to cultivate or distribute marijuana for profit. (Cal. H&S Code sec. 11362.77(a).) If a dispensary is only a storefront distribution operation open to the general public, and there is no indication that it has been involved with growing or cultivating marijuana for the benefit of members as a non-profit enterprise, it will not qualify as a cooperative to exempt it from criminal penalties under California's marijuana laws. Further, the common dictionary definition of "collectives" is that they are organizations jointly managed by those using its facilities or services. Legally recognized cooperatives generally possess "the following features: control and ownership of each member is substantially equal; members are limited to those who will avail themselves of the services furnished by the association; transfer of ownership interests is prohibited or limited; capital investment receives either no return or a limited return; economic benefits pass to the members on a substantially equal basis or on the basis of their patronage of the association; members are not personally liable for obligations of the association in the absence of a direct undertaking or authorization by them; death, bankruptcy, or withdrawal of one or more members does not terminate the association; and [the] services of the association are furnished primarily for the use of the members."20 Marijuana businesses, of any kind, do not normally meet this legal definition. © 2009 California Police Chiefs Assn. 5 All Rights Reserved 65A-66 Based on the foregoing, it is clear that virtually all marijuana dispensaries are not legal enterprises under either federal or state law. LAWS IN OTHER STATES Besides California, at the time of publication of this White Paper, thirteen other states have enacted medical marijuana laws on their books, whereby to some degree marijuana recommended or prescribed by a physician to a specified patient may be legally possessed. These states are Alaska, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont, and Washington. And, possession of marijuana under one ounce has now been decriminalized in Massachusetts. 2I STOREFRONT MARIJUANA DISPENSARIES AND COOPERATIVES Since the passage of the Compassionate Use Act of 1996, many storefront marijuana businesses have opened in California." Some are referred to as dispensaries, and some as cooperatives; but it is how they operate that removes them from any umbrella of legal protection. These facilities operate as if they are pharmacies. Most offer different types and grades of marijuana. Some offer baked goods that contain marijuana.23 Monetary donations are collected from the patient or primary caregiver when marijuana or food items are received. The items are not technically sold since that would be a criminal violation of the statutes. 24 These facilities are able to operate because they apply for and receive business licenses from cities and counties. Federally, all existing storefront marijuana businesses are subject to search and closure since they violate federal law. 25 Their mere existence violates federal law. Consequently, they have no right to exist or operate, and arguably cities and counties in California have no authority to sanction them. Similarly, in California there is no apparent authority for the existence of these storefront marijuana businesses. The Medical Marijuana Program Act of 2004 allows patients and primary caregivers to grow and cultivate marijuana, and no one else. 26 Although California Health and Safety Code section 11362.775 offers some state legal protection for true collectives and cooperatives, no parallel protection exists in the statute for any storefront business providing any narcotic. The common dictionary definition of collectives is that they are organizations jointly managed by those using its facilities or services. Legally recognized cooperatives generally possess "the following features: control and ownership of each member is substantially equal; members are limited to those who will avail themselves of the services furnished by the association; transfer of ownership interests is prohibited or limited; capital investment receives either no return or a limited return; economic benefits pass to the members on a substantially equal basis or on the basis of their patronage of the association; members are not personally liable for obligations of the association in the absence of a direct undertaking or authorization by them; death, bankruptcy or withdrawal of one or more members does not terminate the association; and [the] services of the association are furnished primarily for the use of the members."27 Marijuana businesses, of any kind, do not meet this legal definition. Actual medical dispensaries are commonly defined as offices in hospitals, schools, or other institutions from which medical supplies, preparations, and treatments are dispensed. Hospitals, hospices, home health care agencies, and the like are specifically included in the code as primary caregivers as long as they have "consistently assumed responsibility for the housing, health, or safety" of a patient.28 Clearly, it is doubtful that any of the storefront marijuana businesses currently © 2009 California Police Chiefs Assn. 6 All Rights Reserved 65A-67 existing in California can claim that status. Consequently, they are not primary caregivers and are subject to prosecution under both California and federal laws. HOW EXISTING DISPENSARIES OPERATE Despite their clear illegality, some cities do have existing and operational dispensaries. Assuming, arguendo, that they may operate, it may be helpful to review the mechanics of the business. The former Green Cross dispensary in San Francisco illustrates how a typical marijuana dispensary works. 29 A guard or employee may check for medical marijuana cards or physician recommendations at the entrance. Many types and grades of marijuana are usually available. Although employees are neither pharmacists nor doctors, sales clerks will probably make recommendations about what type of marijuana will best relieve a given medical symptom. Baked goods containing marijuana may be available and sold, although there is usually no health permit to sell baked goods. The dispensary will give the patient a form to sign declaring that the dispensary is their "primary caregiver" (a process fraught with legal difficulties). The patient then selects the marijuana desired and is told what the "contribution" will be for the product. The California Health & Safety Code specifically prohibits the sale of marijuana to a patient, so "contributions" are made to reimburse the dispensary for its time and care in making "product" available. However, if a calculation is made based on the available evidence, it is clear that these "contributions" can easily add up to millions of dollars per year. That is a very large cash flow for a "non-profit" organization denying any participation in the retail sale of narcotics. Before its application to renew its business license was denied by the City of San Francisco, there were single days that Green Cross sold $45,000 worth of marijuana. On Saturdays, Green Cross could sell marijuana to forty-three patients an hour. The marijuana sold at the dispensary was obtained from growers who brought it to the store in backpacks. A medium- sized backpack would hold approximately $16,000 worth of marijuana. Green Cross used many different marijuana growers. It is clear that dispensaries are running as if they are businesses, not legally valid cooperatives. Additionally, they claim to be the "primary caregivers" of patients. This is a spurious claim. As discussed above, the term "primary caregiver" has a very specific meaning and defined legal qualifications. A primary caregiver is an individual who has "consistently assumed responsibility for the housing, health, or safety of a patient." 30 The statutory definition includes some clinics, health care facilities, residential care facilities, and hospices. If more than one patient designates the same person as the primary caregiver, all individuals must reside in the same city or county. In most circumstances the primary caregiver must be at least 18 years of age. It is almost impossible for a storefront marijuana business to gain true primary caregiver status. A business would have to prove that it "consistently had assumed responsibility for [a patient's] housing, health, or safety."$1 The key to being a primary caregiver is not simply that marijuana is provided for a patient's health: the responsibility for the patient's health must be consistent. As seen in the Green Cross example, a storefront marijuana business's relationship with a patient is most likely transitory. In order to provide a qualified patient with marijuana, a storefront marijuana business must create an instant "primary caregiver" relationship with him. The very fact that the relationship is instant belies any consistency in their relationship and the requirement that housing, health, or safety is consistently provided. Courts have found that a patient's act of signing a piece of paper declaring that someone is a primary caregiver does not necessarily make that person one. The © 2009 California Police Chiefs Assn. 7 All Rights Reserved 65A-68 consistent relationship demanded by the statute is mere fiction if it can be achieved between an individual and a business that functions like a narcotic retail store. ADVERSE SECONDARY EFFECTS OF MARIJUANA DISPENSARIES AND SIMILIARLY OPERATING COOPERATIVES Of great concern are the adverse secondary effects of these dispensaries and storefront cooperatives. They are many. Besides flouting federal law by selling a prohibited Schedule I drug under the Controlled Substances Act, marijuana dispensaries attract or cause numerous ancillary social problems as byproducts of their operation. The most glaring of these are other criminal acts. ANCILLARY CRIMES A. ARMED ROBBERIES AND MURDERS Throughout California, many violent crimes have been committed that can be traced to the proliferation of marijuana dispensaries. These include armed robberies and murders. For example, as far back as 2002, two home occupants were shot in Willits, California in the course of a home- invasion robbery targeting medical marijuana. 32 And, a series of four armed robberies of a marijuana dispensary in Santa Barbara, California occurred through August 10, 2006, in which thirty dollars and fifteen baggies filled with marijuana on display were taken by force and removed from the premises in the latest holdup. The owner said he failed to report the first three robberies because "medical marijuana is such a controversial issue." 33 On February 25, 2004, in Mendocino County two masked thugs committed a home invasion robbery to steal medical marijuana. They held a knife to a 65-year-old man's throat, and though he fought back, managed to get away with large amounts of marijuana. They were soon caught, and one of the men received a sentence of six years in state prison. 34 And, on August 19, 2005, 18-year-old Demarco Lowrey was "shot in the stomach" and "bled to death" during a gunfight with the business owner when he and his friends attempted a takeover robbery of a storefront marijuana business in the City of San Leandro, California. The owner fought back with the hooded home invaders, and a gun battle ensued. Demarco Lowery was hit by gunfire and "dumped outside the emergency entrance of Children's Hospital Oakland" after the shootout.35 He did not survive.36 Near Hayward, California, on September 2, 2005, upon leaving a marijuana dispensary, a patron of the CCA Cannabis Club had a gun put to his head as he was relieved of over $250 worth of pot. Three weeks later, another break-in occurred at the Garden of Eden Cannabis Club in September of 2005.37 Another known marijuana-dispensary-related murder occurred on November 19, 2005. Approximately six gun- and bat-wielding burglars broke into Les Crane's home in Laytonville, California while yelling, "This is a raid." Les Crane, who owned two storefront marijuana businesses, was at home and shot to death. He received gunshot wounds to his head, arm, and abdomen. 38 Another man present at the time was beaten with a baseball bat. The murderers left the home after taking an unknown sum of U.S. currency and a stash of processed marijuana.39 Then, on January 9, 2007, marijuana plant cultivator Rex Farrance was shot once in the chest and killed in his own home after four masked intruders broke in and demanded money. When the homeowner ran to fetch a firearm, he was shot dead. The robbers escaped with a small amount of © 2009 California Police Chiefs Assn. 8 All Rights Reserved 65A-69 cash and handguns. Investigating officers counted 109 marijuana plants in various phases of cultivation inside the house, along with two digital scales and just under 4 pounds of cultivated marijuana. 40 More recently in Colorado, Ken Gorman, a former gubernatorial candidate and dispenser of marijuana who had been previously robbed over twelve times at his home in Denver, was found murdered by gunshot inside his home. He was a prominent proponent of medical marijuana and the legalization of marijuana. 41 B. BURGLARIES In June of 2007, after two burglarizing youths in Bellflower, California were caught by the homeowner trying to steal the fruits of his indoor marijuana grow, he shot one who was running away, and killed him. 42 And, again in January of 2007, Claremont Councilman Corey Calaycay went on record calling marijuana dispensaries "crime magnets" after a burglary occurred in one in 43 Claremont, California. On July 17, 2006, the El Cerrito City Council voted to ban all such marijuana facilities. It did so after reviewing a nineteen-page report that detailed a rise in crime near these storefront dispensaries in other cities. The crimes included robberies, assaults, burglaries, murders, and attempted murders. 44 Even though marijuana storefront businesses do not currently exist in the City of Monterey Park, California, it issued a moratorium on them after studying the issue in August of 2006.45 After allowing these establishments to operate within its borders, the City of West Hollywood, California passed a similar moratorium. The moratorium was "prompted by incidents of armed burglary at some of the city's eight existing pot stores and complaints from neighbors about increased pedestrian and vehicle traffic and noise ....„46 C. TRAFFIC, NOISE, AND DRUG DEALING Increased noise and pedestrian traffic, including nonresidents in pursuit of marijuana, and out of area criminals in search of prey, are commonly encountered just outside marijuana dispensaries,47 as well as drug-related offenses in the vicinity-like resales of products just obtained inside-since these marijuana centers regularly attract marijuana growers, drug users, and drug traffickers.ag Sharing just purchased marijuana outside dispensaries also regularly takes place.49 Rather than the "seriously ill," for whom medical marijuana was expressly intended '50 "'perfectly healthy' young people frequenting dispensaries" are a much more common sight.5 Patient records seized by law enforcement officers from dispensaries during raids in San Diego County, California in December of 2005 "showed that 72 percent of patients were between 17 and 40 years old ...."52 Said one admitted marijuana trafficker, "The people I deal with are the same faces I was dealing with 12 years ago but now, because of Senate Bill 420, they are supposedly legit. I can totally see why cops are bummed. ,53 Reportedly, a security guard sold half a pound of marijuana to an undercover officer just outside a dispensary in Morro Bay, California. 54 And, the mere presence of marijuana dispensaries encourages illegal growers to plant, cultivate, and transport ever more marijuana, in order to supply and sell their crops to these storefront operators in the thriving medical marijuana dispensary market, so that the national domestic marijuana yield has been estimated to be 35.8 billion dollars, of which a 13.8 billion dollar share is California grown. 55 It is a big business. And, although the operators of some dispensaries will claim that they only accept monetary contributions for the products they © 2009 California Police Chiefs Assn. 9 All Rights Reserved 65A-70 dispense, and do not sell marijuana, a patron will not receive any marijuana until an amount of money acceptable to the dispensary has changed hands. D. ORGANIZED CRIME, MONEY LAUNDERING, AND FIREARMS VIOLATIONS Increasingly, reports have been surfacing about organized crime involvement in the ownership and operation of marijuana dispensaries, including Asian and other criminal street gangs and at least one member of the Armenian Mafia. 56 The dispensaries or "pot clubs" are often used as a front by organized crime gangs to traffic in drugs and launder money. One such gang whose territory included San Francisco and Oakland, California reportedly ran a multi-million dollar business operating ten warehouses in which vast amounts of marijuana plants were grown. 57 Besides seizing over 9,000 marijuana plants during surprise raids on this criminal enterprise's storage facilities, federal officers also confiscated three firearms, 58 which seem to go hand in hand with medical marijuana cultivation and dispensaries. 59 Marijuana storefront businesses have allowed criminals to flourish in California. In the summer of 2007, the City of San Diego cooperated with federal authorities and served search warrants on several marijuana dispensary locations. In addition to marijuana, many weapons were recovered, including a stolen handgun and an M-16 assault rifle. 60 The National Drug Intelligence Center reports that marijuana growers are employing armed guards, using explosive booby traps, and murdering people to shield their crops. Street gangs of all national origins are involved in transporting and distributing marijuana to meet the ever increasing demand for the drug.61 Active Asian gangs have included members of Vietnamese organized crime syndicates who have migrated from Canada to buy homes throughout the United States to use as grow houses. 62 Some or all of the processed harvest of marijuana plants nurtured in these homes then wind up at storefront marijuana dispensaries owned and operated by these gangs. Storefront marijuana businesses are very dangerous enterprises that thrive on ancillary grow operations. Besides fueling marijuana dispensaries, some monetary proceeds from the sale of harvested marijuana derived from plants grown inside houses are being used by organized crime syndicates to fund other legitimate businesses for profit and the laundering of money, and to conduct illegal business operations like prostitution, extortion, and drug trafficking. 63 Money from residential grow operations is also sometimes traded by criminal gang members for firearms, and used to buy drugs, personal vehicles, and additional houses for more grow operations, 64 and along with the illegal income derived from large-scale organized crime-related marijuana production operations comes widespread income tax evasion. 65 E. POISONINGS Another social problem somewhat unique to marijuana dispensaries is poisonings, both intentional and unintentional. On August 16, 2006, the Los Angeles Police Department received two such reports. One involved a security guard who ate a piece of cake extended to him from an operator of a marijuana clinic as a "gift," and soon afterward felt dizzy and disoriented.66 The second incident concerned a UPS driver who experienced similar symptoms after accepting and eating a cookie given to him by an operator of a different marijuana clinic.6 © 2009 California Police Chiefs Assn. 10 All Rights Reserved 65A-71 OTHER ADVERSE SECONDARY IMPACTS IN THE IMMEDIATE VICINITY OF DISPENSARIES Other adverse secondary impacts from the operation of marijuana dispensaries include street dealers lurking about dispensaries to offer a lower price for marijuana to arriving patrons; marijuana smoking in public and in front of children in the vicinity of dispensaries; loitering and nuisances; acquiring marijuana and/or money by means of robbery of patrons going to or leaving dispensaries; an increase in burglaries at or near dispensaries; a loss of trade for other commercial businesses located near dispensaries; the sale at dispensaries of other illegal drugs besides marijuana; an increase in traffic accidents and driving under the influence arrests in which marijuana is implicated; and the failure of marijuana dispensary operators to report robberies to police. 68 SECONDARY ADVERSE IMPACTS IN THE COMMUNITY AT LARGE A. UNJUSTIFIED AND FICTITIOUS PHYSICIAN RECOMMENDATIONS California's legal requirement under California Health and Safety Code section 11362.5 that a physician's recommendation is required for a patient or caregiver to possess medical marijuana has resulted in other undesirable outcomes: wholesale issuance of recommendations by unscrupulous physicians seeking a quick buck, and the proliferation of forged or fictitious physician recommendations. Some doctors link up with a marijuana dispensary and take up temporary residence in a local hotel room where they advertise their appearance in advance, and pass out medical marijuana use recommendations to a line of "patients" at "about $150 a pop."69 Other individuals just make up their own phony doctor recommendations,70 which are seldom, if ever, scrutinized by dispensary employees for authenticity. Undercover DEA agents sportin fake medical marijuana recommendations were readily able to purchase marijuana from a clinic. 1 Far too often, California's medical marijuana law is used as a smokescreen for healthy pot users to get their desired drug, and for proprietors of marijuana dispensaries to make money off them, without suffering any legal repercussions. 72 On March 11, 2009, the Osteopathic Medical Board of California adopted the proposed decision revoking Dr. Alfonso Jimenez's Osteopathic Physician's and Surgeon's Certificate and ordering him to pay $74,323.39 in cost recovery. Dr. Jimenez operated multiple marijuana clinics and advertised his services extensively on the Internet. Based on information obtained from raids on marijuana dispensaries in San Diego, in May of 2006, the San Diego Police Department ran two undercover operations on Dr. Jimenez's clinic in San Diego. In January of 2007, a second undercover operation was conducted by the Laguna Beach Police Department at Dr. Jimenez's clinic in Orange County. Based on the results of the undercover operations, the Osteopathic Medical Board charged Dr. Jimenez with gross negligence and repeated negligent acts in the treatment of undercover operatives posing as patients. After a six-day hearing, the Administrative Law Judge (ALJ) issued her decision finding that Dr. Jimenez violated the standard of care by committing gross negligence and repeated negligence in care, treatment, and management of patients when he, among other things, issued medical marijuana recommendations to the undercover agents without conducting adequate medical examinations, failed to gain proper informed consent, and failed to consult with any primary care and/or treating physicians or obtain and review prior medical records before issuing medical marijuana recommendations. The ALJ also found Dr. Jimenez engaged in dishonest behavior by preparing false and/or misleading medical records and disseminating false and misleading advertising to the public, including representing himself as a "Cannabis Specialist" and "Qualified Medical Marijuana Examiner" when no such formal specialty or qualification existed. Absent any © 2009 California Police Chiefs Assn. 11 All Rights Reserved 65A-72 requested administrative agency reconsideration or petition for court review, the decision was to become effective April 24, 2009. B. PROLIFERATION OF GROW HOUSES IN RESIDENTIAL AREAS In recent years the proliferation of grow houses in residential neighborhoods has exploded. This phenomenon is country wide, and ranges from the purchase for purpose of marijuana grow operations of small dwellings to "high priced McMansions ....i73 Mushrooming residential marijuana grow operations have been detected in California, Connecticut, Florida, Georgia, New Hampshire, North Carolina, Ohio, South Carolina, and Texas. 74 In 2007 alone, such illegal operations were detected and shut down by federal and state law enforcement officials in 41 houses in California, 50 homes in Florida, and 11 homes in New Hampshire. 75 Since then, the number of residences discovered to be so impacted has increased exponentially. Part of this recent influx of illicit residential grow operations is because the "THC-rich `B.C. bud' strain" of marijuana originally produced in British Columbia "can be grown only in controlled indoor environments," and the Canadian market is now reportedly saturated with the product of "competin? Canadian gangs," often Asian in composition or outlaw motorcycle gangs like the Hells Angels. 6 Typically, a gutted house can hold about 1,000 plants that will each yield almost half a pound of smokable marijuana; this collectively nets about 500 pounds of usable marijuana per harvest, with an average of three to four harvests per year.77 With a street value of $3,000 to $5,000 per pound" for high-potency marijuana, and such multiple harvests, "a successful grow house can bring in between $4.5 million and $10 million a year ...."78 The high potency of hydroponically grown marijuana can command a price as much as six times higher than commercial grade marijuana. 79 C. LIFE SAFETY HAZARDS CREATED BY GROW HOUSES In Humboldt County, California, structure fires caused by unsafe indoor marijuana grow operations have become commonplace. The city of Arcata, which sports four marijuana dispensaries, was the site of a house fire in which a fan had fallen over and ignited a fire; it had been turned into a grow house by its tenant. Per Arcata Police Chief Randy Mendosa, altered and makeshift "no code" electrical service connections and overloaded wires used to operate high-powered grow lights and fans are common causes of the fires. Large indoor marijuana growing operations can create such excessive draws of electricity that PG&E power pole transformers are commonly blown. An average 1,500- square-foot tract house used for growing marijuana can generate monthly electrical bills from $1,000 to $3,000 per month. From an environmental standpoint, the carbon footprint from greenhouse gas emissions created by large indoor marijuana grow operations should be a major concern for every community in terms of complying with Air Board AB-32 regulations, as well as other greenhouse gas reduction policies. Typically, air vents are cut into roofs, water seeps into carpeting, windows are blacked out, holes are cut in floors, wiring is jury-rigged, and electrical circuits are overloaded to operate grow lights and other apparatus. When fires start, they spread quickly. The May 31, 2008 edition of the Los Angeles Times reported, "Law enforcement officials estimate that as many as 1,000 of the 7,500 homes in this Humboldt County community are being used to cultivate marijuana, slashing into the housing stock, spreading building-safety problems and sowing neighborhood discord." Not surprisingly, in this bastion of liberal pot possession rules that authorized the cultivation of up to 99 plants for medicinal purpose, most structural fires in the community of Arcata have been of late associated with marijuana cultivation.80 Chief of Police Mendosa clarified that the actual number of marijuana grow houses in Arcata has been an ongoing subject of public debate. Mendosa added, "We know there are numerous grow houses in almost every neighborhood in and around the city, which has been the source of constant citizen complaints." House fires caused by © 2009 California Police Chiefs Assn. 12 All Rights Reserved 65A-73 grower-installed makeshift electrical wiring or tipped electrical fans are now endemic to Humboldt County. 81 Chief Mendosa also observed that since marijuana has an illicit street value of up to $3,000 per pound, marijuana grow houses have been susceptible to violent armed home invasion robberies. Large-scale marijuana grow houses have removed significant numbers of affordable houses from the residential rental market. When property owners discover their rentals are being used as grow houses, the residences are often left with major structural damage, which includes air vents cut into roofs and floors, water damage to floors and walls, and mold. The June 9, 2008 edition of the New York Times shows an unidentified Arcata man tending his indoor grow; the man claimed he can make $25,000 every three months by selling marijuana grown in the bedroom of his rented house. 82 Claims of ostensible medical marijuana growing pursuant to California's medical marijuana laws are being advanced as a mostly false shield in an attempt to justify such illicit operations. Neither is fire an uncommon occurrence at grow houses elsewhere across the nation. Another occurred not long ago in Holiday, Florida. 83 To compound matters further, escape routes for firefighters are often obstructed by blocked windows in grow houses, electric wiring is tampered with to steal electricity, and some residences are even booby-trapped to discourage and repel unwanted intruders. 84 D. INCREASED ORGANIZED GANG ACTIVITIES Along with marijuana dispensaries and the grow operations to support them come members of organized criminal gangs to operate and profit from them. Members of an ethnic Chinese drug gang were discovered to have operated 50 indoor grow operations in the San Francisco Bay area, while Cuban-American crime organizations have been found to be operating grow houses in Florida and elsewhere in the South. A Vietnamese drug ring was caught operating 19 grow houses in Seattle and Puget Sound, Washington. 85 In July of 2008, over 55 Asian gang members were indicted for narcotics trafficking in marijuana and ecstasy, including members of the Hop Sing Gang that had been actively operating marijuana grow operations in Elk Grove and elsewhere in the vicinity of Sacramento, California. 86 E. EXPOSURE OF MINORS TO MARIJUANA Minors who are exposed to marijuana at dispensaries or residences where marijuana plants are grown may be subtly influenced to regard it as a generally legal drug, and inclined to sample it. In grow houses, children are exposed to dangerous fire and health conditions that are inherent in indoor grow operations.87 Dispensaries also sell marijuana to minors.ss F. IMPAIRED PUBLIC HEALTH Indoor marijuana grow operations emit a skunk-like odor, 89 and foster generally unhealthy conditions like allowing chemicals and fertilizers to be placed in the open, an increased carbon dioxide level within the grow house, and the accumulation of mold, 90 all of which are dangerous to any children or adults who may be living in the residence, 91 although many grow houses are uninhabited. © 2009 California Police Chiefs Assn. 13 All Rights Reserved 65A-74 G. LOSS OF BUSINESS TAX REVENUE When business suffers as a result of shoppers staying away on account of traffic, blight, crime, and the undesirability of a particular business district known to be frequented by drug users and traffickers, and organized criminal gang members, a city's tax revenues necessarily drop as a direct consequence. H. DECREASED QUALITY OF LIFE IN DETERIORATING NEIGHBORHOODS, BOTH BUSINESS AND RESIDENTIAL Marijuana dispensaries bring in the criminal element and loiterers, which in turn scare off potential business patrons of nearby legitimate businesses, causing loss of revenues and deterioration of the affected business district. Likewise, empty homes used as grow houses emit noxious odors in residential neighborhoods, project irritating sounds of whirring fans, 92 and promote the din of vehicles coming and going at all hours of the day and night. Near harvest time, rival growers and other uninvited enterprising criminals sometimes invade grow houses to beat "clip crews" to the site and rip off mature plants ready for harvesting. As a result, violence often erupts from confrontations in the affected residential neighborhood.93 ULTIMATE CONCLUSIONS REGARDING ADVERSE SECONDARY EFFECTS On balance, any utility to medical marijuana patients in care giving and convenience that marijuana dispensaries may appear to have on the surface is enormously outweighed by a much darker reality that is punctuated by the many adverse secondary effects created by their presence in communities, recounted here. These drug distribution centers have even proven to be unsafe for their own proprietors. POSSIBLE LOCAL GOVERNMENTAL RESPONSES TO MARIJUANA DISPENSARIES A. IMPOSED MORATORIA BY ELECTED LOCAL GOVERNMENTAL OFFICIALS While in the process of investigating and researching the issue of licensing marijuana dispensaries, as an interim measure city councils may enact date-specific moratoria that expressly prohibit the presence of marijuana dispensaries, whether for medical use or otherwise, and prohibiting the sale of marijuana in any form on such premises, anywhere within the incorporated boundaries of the city until a specified date. Before such a moratorium's date of expiration, the moratorium may then either be extended or a city ordinance enacted completely prohibiting or otherwise restricting the establishment and operation of marijuana dispensaries, and the sale of all marijuana products on such premises. County supervisors can do the same with respect to marijuana dispensaries sought to be established within the unincorporated areas of a county. Approximately 80 California cities, including the cities of Antioch, Brentwood, Oakley, Pinole, and Pleasant Hill, and 6 counties, including Contra Costa County, have enacted moratoria banning the existence of marijuana dispensaries. In a novel approach, the City of Arcata issued a moratorium on any new dispensaries in the downtown area, based on no agricultural activities being permitted to occur there.94 © 2009 California Police Chiefs Assn. 14 All Rights Reserved 65A-75 B. IMPOSED BANS BY ELECTED LOCAL GOVERNMENTAL OFFICIALS While the Compassionate Use Act of 1996 permits seriously ill persons to legally obtain and use marijuana for medical purposes upon a physician's recommendation, it is silent on marijuana dispensaries and does not expressly authorize the sale of marijuana to patients or primary caregivers. Neither Proposition 215 nor Senate Bill 420 specifically authorizes the dispensing of marijuana in any form from a storefront business. And, no state statute presently exists that expressly permits the licensing or operation of marijuana dispensaries. 95 Consequently, approximately 39 California cities, including the Cities of Concord and San Pablo, and 2 counties have prohibited marijuana dispensaries within their respective geographical boundaries, while approximately 24 cities, including the City of Martinez, and 7 counties have allowed such dispensaries to do business within their jurisdictions. Even the complete prohibition of marijuana dispensaries within a given locale cannot be found to run afoul of current California law with respect to permitted use of marijuana for medicinal purposes, so long as the growing or use of medical marijuana by a city or county resident in conformance with state law is not proscribed. 96 In November of 2004, the City of Brampton in Ontario, Canada passed The Grow House Abatement By-law, which authorized the city council to appoint inspectors and local police officers to inspect suspected grow houses and render safe hydro meters, unsafe wiring, booby traps, and any violation of the Fire Code or Building Code, and remove discovered controlled substances and ancillary equipment designed to grow and manufacture such substances, at the involved homeowner's cost.97 And, after state legislators became appalled at the proliferation of for-profit residential grow operations, the State of Florida passed the Marijuana Grow House Eradication act (House Bill 173) in June of 2008. The governor signed this bill into law, making owning a house for the purpose of cultivating, packaging, and distributing marijuana a third-degree felony; growing 25 or more marijuana plants a second- degree felony; and growing "25 or more marijuana plants in a home with children present" a first- degree felony. 98 It has been estimated that approximately 17,500 marijuana grow operations were active in late 2007.99 To avoid becoming a dumping ground for organized crime syndicates who decide to move their illegal grow operations to a more receptive legislative environment, California and other states might be wise to quickly follow suit with similar bills, for it may already be happening. 100 C. IMPOSED RESTRICTED ZONING AND OTHER REGULATION BY ELECTED LOCAL GOVERNMENTAL OFFICIALS If so inclined, rather than completely prohibit marijuana dispensaries, through their zoning power city and county officials have the authority to restrict owner operators to locate and operate so-called "medical marijuana dispensaries" in prescribed geographical areas of a city or designated unincorporated areas of a county, and require them to meet prescribed licensing requirements before being allowed to do so. This is a risky course of action though for would-be dispensary operators, and perhaps lawmakers too, since federal authorities do not recognize any lawful right for the sale, purchase, or use of marijuana for medical use or otherwise anywhere in the United States, including California. Other cities and counties have included as a condition of licensure for dispensaries that the operator shall "violate no federal or state law," which puts any applicant in a "Catch-22" situation since to federal authorities any possession or sale of marijuana is automatically a violation of federal law. Still other municipalities have recently enacted or revised comprehensive ordinances that address a variety of medical marijuana issues. For example, according to the City of Arcata Community © 2009 California Police Chiefs Assn. 15 All Rights Reserved 65A-76 Development Department in Arcata, California, in response to constant citizen complaints from what had become an extremely serious community problem, the Arcata City Council revised its Land Use Standards for Medical Marijuana Cultivation and Dispensing. In December of 2008, City of Arcata Ordinance #1382 was enacted. It includes the following provisions: "Categories: 1. Personal Use Cooperatives or Collectives Medical Marijuana for Personal Use: An individual qualified patient shall be allowed to cultivate medical marijuana within his/her private residence in conformance with the following standards: 1. Cultivation area shall not exceed 50 square feet and not exceed ten feet (10' in height. a. Cultivation lighting shall not exceed 1200 watts; b. Gas products (C02, butane, etc.) for medical marijuana cultivation or processing is prohibited. C. Cultivation and sale is prohibited as a Home Occupation (sale or dsnensing is prohibited). d. Qualified patient shall reside in the residence where the medical marijuana cultivation occurs; e. Qualified patient shall not participate in medical marijuana cultivation in any other residence. f. Residence kitchen, bathrooms, and primary bedrooms shall not be used primarily for medical marijuana cultivation; g. Cultivation area shall comply with the California Building Code § 1203.4 Natural Ventilation or § 402.3 Mechanical Ventilation. h. The medical marijuana cultivation area shall not adversely affect the health or safety of the nearby residents. 2. City Zoning Administrator my approve up to 100 square foot: a. Documentation showing why the 50 square foot cultivation area standard is not feasible. b. Include written permission from the property owner. C. City Building Official must inspect for California Building Code and Fire Code. d. At a minimum, the medical marijuana cultivation area shall be constructed with a 1- hour firewall assembly of green board. e. Cultivation of medical marijuana for personal use is limited to detached single family residential properties, or the medical marijuana cultivation area shall be limited to a garage or self-contained outside accessory building that is secured, locked, and fully enclosed. Medical Marijuana Cooperatives or Collectives. 1. Allowed with a Conditional Use Permit. 2. In Commercial, Industrial, and Public Facility Zoning Districts. 3. Business form must be a cooperative or collective. 4. Existing cooperative or collective shall be in full compliance within one year. 5. Total number of medical marijuana cooperatives or collectives is limited to four and ultimately two. 6. Special consideration if located within a. A 300 foot radius from any existing residential zoning district, b. Within 500 feet of any other medical marijuana cooperative or collective. © 2009 California Police Chiefs Assn. 16 All Rights Reserved 65A-77 C. Within 500 feet from any existing public park, playground, day care, or school. 7. Source of medical marijuana. a. Permitted Cooperative or Collective. On-site medical marijuana cultivation shall not exceed twenty-five (25) percent of the total floor area, but in no case greater than 1,500 square feet and not exceed ten feet (10') in height. b. Off-site Permitted Cultivation. Use Permit application and be updated annually. C. Qualified Patients. Medical marijuana acquired from an individual qualified patient shall received no monetary remittance, and the qualified patient is a member of the medical marijuana cooperative or collective. Collective or cooperative may credit its members for medical marijuana provided to the collective or cooperative, which they may allocate to other members. 8. Operations Manual at a minimum include the following information: a. Staff screening process including appropriate background checks. b. Operating hours. C. Site, floor plan of the facility. d. Security measures located on the premises, including but not limited to, lighting, alarms, and automatic law enforcement notification. e. Screening, registration and validation process for qualified patients. f. Qualified patient records acquisition and retention procedures. g. Process for tracking medical marijuana quantities and inventory controls including on-site cultivation, processing, and/or medical marijuana products received from outside sources. h. Measures taken to minimize or offset energy use from the cultivation or processing of medical marijuana. i. Chemicals stored, used and any effluent discharged into the City's wastewater and/or storm water system. 9. Operating Standards. a. No dispensing medical marijuana more than twice a day. b. Dispense to an individual qualified patient who has a valid, verified physician's recommendation. The medical marijuana cooperative or collective shall verify that the physician's recommendation is current and valid. C. Display the client rules and/or regulations at each building entrance. d. Smoking, ingesting or consuming medical marijuana on the premises or in the vicinity is prohibited. e. Persons under the age of eighteen (18) are precluded from entering the premises. f. No on-site display of marijuana plants. g. No distribution of live plants, starts and clones on through Use Permit. h. Permit the on-site display or sale of marijuana paraphernalia only through the Use Permit. i. Maintain all necessary permits, and pay all appropriate taxes. Medical marijuana cooperatives or collectives shall also provide invoices to vendors to ensure vendor's tax liability responsibility; j. Submit an "Annual Performance Review Report" which is intended to identify effectiveness of the approved Use Permit, Operations Manual, and Conditions of Approval, as well as the identification and implementation of additional procedures as deemed necessary. k. Monitoring review fees shall accompany the "Annual Performance Review Report" for costs associated with the review and approval of the report. 10. Permit Revocation or Modification. A use permit may be revoked or modified for non- compliance with one or more of the items described above." © 2009 California Police Chiefs Assn. 17 All Rights Reserved 65A-78 LIABILITY ISSUES With respect to issuing business licenses to marijuana storefront facilities a very real issue has arisen: counties and cities are arguably aiding and abetting criminal violations of federal law. Such actions clearly put the counties permitting these establishments in very precarious legal positions. Aiding and abetting a crime occurs when someone commits a crime, the person aiding that crime knew the criminal offender intended to commit the crime, and the person aiding the crime intended to assist the criminal offender in the commission of the crime. The legal definition of aiding and abetting could be applied to counties and cities allowing marijuana facilities to open. A county that has been informed about the Gonzales v. Raich decision knows that all marijuana activity is federally illegal. Furthermore, such counties know that individuals involved in the marijuana business are subject to federal prosecution. When an individual in California cultivates, possesses, transports, or uses marijuana, he or she is committing a federal crime. A county issuing a business license to a marijuana facility knows that the people there are committing federal crimes. The county also knows that those involved in providing and obtaining marijuana are intentionally violating federal law. This very problem is why some counties are re-thinking the presence of marijuana facilities in their communities. There is a valid fear of being prosecuted for aiding and abetting federal drug crimes. Presently, two counties have expressed concern that California's medical marijuana statutes have placed them in such a precarious legal position. Because of the serious criminal ramifications involved in issuing business permits and allowing storefront marijuana businesses to operate within their borders, San Diego and San Bernardino Counties filed consolidated lawsuits against the state seeking to prevent the State of California from enforcing its medical marijuana statutes which potentially subject them to criminal liability, and squarely asserting that California medical marijuana laws are preempted by federal law in this area. After California's medical marijuana laws were all upheld at the trial level, California's Fourth District Court of Appeal found that the State of California could mandate counties to adopt and enforce a voluntary medical marijuana identification card system, and the appellate court bypassed the preemption issue by finding that San Diego and San Bernardino Counties lacked standing to raise this challenge to California's medical marijuana laws. Following this state appellate court decision, independent petitions for review filed by the two counties were both denied by the California Supreme Court. Largely because of the quandary that county and city peace officers in California face in the field when confronted with alleged medical marijuana with respect to enforcement of the total federal criminal prohibition of all marijuana, and state exemption from criminal penalties for medical marijuana users and caregivers, petitions for a writ of certiorari were then separately filed by the two counties seeking review of this decision by the United States Supreme Court in the consolidated cases of County of San Diego, County of San Bernardino, and Gary Penrod, as Sheriff of the County of San Bernardino v. San Diego Norml, State of California, and Sandra Shewry, Director of the California Department of Health Services in her official capacity, Ct.App. Case No. D-5-333.) The High Court has requested the State of California and other interested parties to file responsive briefs to the two counties' and Sheriff Penrod's writ petitions before it decides whether to grant or deny review of these consolidated cases. The petitioners would then be entitled to file a reply to any filed response. It is anticipated that the U.S. Supreme Court will formally grant or deny review of these consolidated cases in late April or early May of 2009. © 2009 California Police Chiefs Assn. 18 All Rights Reserved 65A-79 In another case, City of Garden Grove v. Superior Court (2007) 157 Cal.AppAth 355, although the federal preemption issue was not squarely raised or addressed in its decision, California's Fourth District Court of Appeal found that public policy considerations allowed a city standing to challenge a state trial court's order directing the return by a city police department of seized medical marijuana to a person determined to be a patient. After the court-ordered return of this federally banned substance was upheld at the intermediate appellate level, and not accepted for review by the California Supreme Court, a petition for a writ of certiorari was filed by the City of Garden Grove to the U.S. Supreme Court to consider and reverse the state appellate court decision. But, that petition was also denied. However, the case of People v. Kelly (2008) 163 Cal.AppAth 124-in which a successful challenge was made to California's Medical Marijuana Program's maximum amounts of marijuana and marijuana plants permitted to be possessed by medical marijuana patients (Cal. H&S Code sec. 11362.77 et seq.), which limits were found at the court of appeal level to be without legal authority for the state to impose-has been accepted for review by the California Supreme Court on the issue of whether this law was an improper amendment to Proposition 215's Compassionate Use Act of 1996. A SAMPLING OF EXPERIENCES WITH MARIJUANA DISPENSARIES MARIJUANA DISPENSARIES-THE SAN DIEGO STORY After the passage of Proposition 215 in 1996, law enforcement agency representatives in San Diego, California met many times to formulate a comprehensive strategy of how to deal with cases that may arise out of the new law. In the end it was decided to handle the matters on a case-by-case basis. In addition, questionnaires were developed for patient, caregiver, and physician interviews. At times patients without sales indicia but large grows were interviewed and their medical records reviewed in making issuing decisions. In other cases where sales indicia and amounts supported a finding of sales the cases were pursued. At most, two cases a month were brought for felony prosecution. In 2003, San Diego County's newly elected District Attorney publicly supported Prop. 215 and wanted her newly created Narcotics Division to design procedures to ensure patients were not caught up in case prosecutions. As many already know, law enforcement officers rarely arrest or seek prosecution of a patient who merely possesses personal use amounts. Rather, it is those who have sales amounts in product or cultivation who are prosecuted. For the next two years the District Attorney's Office proceeded as it had before. But, on the cases where the patient had too many plants or product but not much else to show sales-the DDAs assigned to review the case would interview and listen to input to respect the patient's and the DA's position. Some cases were rejected and others issued but the case disposition was often generous and reflected a "sin no more" view. All of this changed after the passage of SB 420. The activists and pro-marijuana folks started to push the envelope. Dispensaries began to open for business and physicians started to advertise their availability to issue recommendations for the purchase of medical marijuana. By spring of 2005 the first couple of dispensaries opened up-but they were discrete. This would soon change. By that summer, 7 to 10 dispensaries were open for business, and they were selling marijuana openly. In fact, the local police department was doing a small buy/walk project and one of its target dealers said he was out of pot but would go get some from the dispensary to sell to the undercover officer (UC); he did. It was the proliferation of dispensaries and ancillary crimes that prompted the San Diego Police Chief (the Chief was a Prop. 215 supporter who sparred with the Fresno DEA in his prior job over this issue) to authorize his officers to assist DEA. © 2009 California Police Chiefs Assn. 19 All Rights Reserved 65A-80 The Investigation San Diego DEA and its local task force (NTF) sought assistance from the DA's Office as well as the U.S. Attorney's Office. Though empathetic about being willing to assist, the DA's Office was not sure how prosecutions would fare under the provisions of SB 420. The U.S. Attorney had the easier road but was noncommittal. After several meetings it was decided that law enforcement would work on using undercover operatives (UCs) to buy, so law enforcement could see exactly what was happening in the dispensaries. The investigation was initiated in December of 2005, after NTF received numerous citizen complaints regarding the crime and traffic associated with "medical marijuana dispensaries." The City of San Diego also saw an increase in crime related to the marijuana dispensaries. By then approximately 20 marijuana dispensaries had opened and were operating in San Diego County, and investigations on 15 of these dispensaries were initiated. During the investigation, NTF learned that all of the business owners were involved in the transportation and distribution of large quantities of marijuana, marijuana derivatives, and marijuana food products. In addition, several owners were involved in the cultivation of high grade marijuana. The business owners were making significant profits from the sale of these products and not properly reporting this income. Undercover Task Force Officers (TFO's) and SDPD Detectives were utilized to purchase marijuana and marijuana food products from these businesses. In December of 2005, thirteen state search warrants were executed at businesses and residences of several owners. Two additional follow-up search warrants and a consent search were executed the same day. Approximately 977 marijuana plants from seven indoor marijuana grows, 564.88 kilograms of marijuana and marijuana food products, one gun, and over $58,000 U.S. currency were seized. There were six arrests made during the execution of these search warrants for various violations, including outstanding warrants, possession of marijuana for sale, possession of psilocybin mushrooms, obstructing a police officer, and weapons violations. However, the owners and clerks were not arrested or prosecuted at this time just those who showed up with weapons or product to sell. Given the fact most owners could claim mistake of law as to selling (though not a legitimate defense, it could be a jury nullification defense) the DA's Office decided not to file cases at that time. It was hoped that the dispensaries would feel San Diego was hostile ground and they would do business elsewhere. Unfortunately this was not the case. Over the next few months seven of the previously targeted dispensaries opened, as well as a slew of others. Clearly prosecutions would be necessary. To gear up for the re-opened and new dispensaries prosecutors reviewed the evidence and sought a second round of UC buys wherein the UC would be buying for themselves and they would have a second UC present at the time acting as UC 1's caregiver who also would buy. This was designed to show the dispensary was not the caregiver. There is no authority in the law for organizations to act as primary caregivers. Caregivers must be individuals who care for a marijuana patient. A primary caregiver is defined by Proposition 215, as codified in H&S Code section 11362.5(e), as, "For the purposes of this section, 'primary caregiver' means the individual designated by the person exempted under this section who has consistently assumed responsibility for the housing, health, or safety of that person." The goal was to show that the stores were only selling marijuana, and not providing care for the hundreds who bought from them. © 2009 California Police Chiefs Assn. 20 All Rights Reserved 65A-81 In addition to the caregiver-controlled buys, another aim was to put the whole matter in perspective for the media and the public by going over the data that was found in the raided dispensary records, as well as the crime statistics. An analysis of the December 2005 dispensary records showed a breakdown of the purported illness and youthful nature of the patients. The charts and other PR aspects played out after the second take down in July of 2006. The final attack was to reveal the doctors (the gatekeepers for medical marijuana) for the fraud they were committing. UCs from the local PD went in and taped the encounters to show that the pot docs did not examine the patients and did not render care at all; rather they merely sold a medical MJ recommendation whose duration depended upon the amount of money paid. In April of 2006, two state and two federal search warrants were executed at a residence and storage warehouse utilized to cultivate marijuana. Approximately 347 marijuana plants, over 21 kilograms of marijuana, and $2,855 U.S. currency were seized. Due to the pressure from the public, the United States Attorney's Office agreed to prosecute the owners of the businesses with large indoor marijuana grows and believed to be involved in money laundering activities. The District Attorney's Office agreed to prosecute the owners in the other investigations. In June of 2006, a Federal Grand Jury indicted six owners for violations of Title 21 USC, sections 846 and 841(a)(1), Conspiracy to Distribute Marijuana; sections 846 and 841(a), Conspiracy to Manufacture Marijuana; and Title 18 USC, Section 2, Aiding and Abetting. In July of 2006, 11 state and 11 federal search warrants were executed at businesses and residences associated with members of these businesses. The execution of these search warrants resulted in the arrest of 19 people, seizure of over $190,000 in U.S. currency and other assets, four handguns, one rifle, 405 marijuana plants from seven grows, and over 329 kilograms of marijuana and marijuana food products. Following the search warrants, two businesses reopened. An additional search warrant and consent search were executed at these respective locations. Approximately 20 kilograms of marijuana and 32 marijuana plants were seized. As a result, all but two of the individuals arrested on state charges have pled guilty. Several have already been sentenced and a few are still awaiting sentencing. All of the individuals indicted federally have also pled guilty and are awaiting sentencing. After the July 2006 search warrants a joint press conference was held with the U.S. Attorney and District Attorney, during which copies of a complaint to the medical board, photos of the food products which were marketed to children, and the charts shown below were provided to the media. Directly after these several combined actions, there were no marijuana distribution businesses operating in San Diego County. Law enforcement agencies in the San Diego region have been able to successfully dismantle these businesses and prosecute the owners. As a result, medical marijuana advocates have staged a number of protests demanding DEA allow the distribution of marijuana. The closure of these businesses has reduced crime in the surrounding areas. © 2009 California Police Chiefs Assn. 21 All Rights Reserved 65A-82 The execution of search warrants at these businesses sent a powerful message to other individuals operating marijuana distribution businesses that they are in violation of both federal law and California law. Press Materials: Reported Crime at Marijuana Dispensaries From January 1, 2005 through June 23, 2006 18 16 14 12 10 8 6 4 2 0 Information showing the dispensaries attracted crime: The marijuana dispensaries were targets of violent crimes because of the amount of marijuana, currency, and other contraband stored inside the businesses. From January 1, 2005 through June 23, 2006, 24 violent crimes were reported at marijuana dispensaries. An analysis of financial records seized from the marijuana dispensaries showed several dispensaries were grossing over $300,000 per month from selling marijuana and marijuana food products. The majority of customers purchased marijuana with cash. Crime statistics inadequately reflect the actual number of crimes committed at the marijuana dispensaries. These businesses were often victims of robberies and burglaries, but did not report the crimes to law enforcement on account of fear of being arrested for possession of marijuana in excess of Prop. 215 guidelines. NTF and the San Diego Police Department (SDPD) received numerous citizen complaints regarding every dispensary operating in San Diego County. Because the complaints were received by various individuals, the exact number of complaints was not recorded. The following were typical complaints received: • high levels of traffic going to and from the dispensaries • people loitering in the parking lot of the dispensaries • people smoking marijuana in the parking lot of the dispensaries © 2009 California Police Chiefs Assn. 22 All Rights Reserved 65A-83 Burglary Attempted Criminal Attempted Armed Battery Burglary Threat Robbery Robbery • vandalism near dispensaries • threats made by dispensary employees to employees of other businesses • citizens worried they may become a victim of crime because of their proximity to dispensaries In addition, the following observations (from citizen activists assisting in data gathering) were made about the marijuana dispensaries: • Identification was not requested for individuals who looked under age 18 • Entrance to business was not refused because of lack of identification • Individuals were observed loitering in the parking lots • Child-oriented businesses and recreational areas were situated nearby • Some businesses made no attempt to verify a submitted physician's recommendation Dispensary Patients By Age -Ages 71-75, 4, 0% Ages 66-70, 19, 1 -Ages 76-80, 0, 0% Ages 61-65, 47, 2% _Ages 81-85, 0, 0% Ages 56-60, 89, 30/ Ages 51-55, 173, 60/ Ages 46-50, 210, 7% 0 Ages 41-45, 175, 6°/ Ages 36-40, 270, 90 Ages 31-35, 302, 100 No Age listed, 118, 4% Ages 21-25, 719, 23% An analysis of patient records seized during search warrants at several dispensaries show that 52% of the customers purchasing marijuana were between the ages of 17 to 30. 63% of primary caregivers purchasing marijuana were between the ages of 18 through 30. Only 2.05% of customers submitted a physician's recommendation for AIDS, glaucoma, or cancer. Why these businesses were deemed to be criminal--not compassionate: The medical marijuana businesses were deemed to be criminal enterprises for the following reasons: • Many of the business owners had histories of drug and violence-related arrests. • The business owners were street-level marijuana dealers who took advantage of Prop. 215 in an attempt to legitimize marijuana sales for profit. • Records, or lack of records, seized during the search warrants showed that all the owners were not properly reporting income generated from the sales of marijuana. Many owners were involved in money laundering and tax evasion. • The businesses were selling to individuals without serious medical conditions. • There are no guidelines on the amount of marijuana which can be sold to an individual. For © 2009 California Police Chiefs Assn. 23 All Rights Reserved Ages 17-20, 364, 12% 65A-84 Ages 26-30, 504, 17% example, an individual with a physician's recommendation can go to as many marijuana distribution businesses and purchase as much marijuana as he/she wants. California law allows an individual to possess 6 mature or 12 immature plants per qualified person. However, the San Diego Municipal Code states a "caregiver" can only provide care to 4 people, including themselves; this translates to 24 mature or 48 immature plants total. Many of these dispensaries are operating large marijuana grows with far more plants than allowed under law. Several of the dispensaries had indoor marijuana grows inside the businesses, with mature and/or immature marijuana plants over the limits. State law allows a qualified patient or primary caregiver to possess no more than eight ounces of dried marijuana per qualified patient. However, the San Diego Municipal Code allows primary caregivers to possess no more than two pounds of processed marijuana. Under either law, almost every marijuana dispensary had over two pounds of processed marijuana during the execution of the search warrants. Some marijuana dispensaries force customers to sign forms designating the business as their primary caregiver, in an attempt to circumvent the law. 2. EXPERIENCES WITH MARIJUANA DISPENSARIES IN RIVERSIDE COUNTY There were some marijuana dispensaries operating in the County of Riverside until the District Attorney's Office took a very aggressive stance in closing them. In Riverside, anyone that is not a "qualified patient" or "primary caregiver" under the Medical Marijuana Program Act who possesses, sells, or transports marijuana is being prosecuted. Several dispensary closures illustrate the impact this position has had on marijuana dispensaries. For instance, the Palm Springs Caregivers dispensary (also known as Palm Springs Safe Access Collective) was searched after a warrant was issued. All materials inside were seized, and it was closed down and remains closed. The California Caregivers Association was located in downtown Riverside. Very shortly after it opened, it was also searched pursuant to a warrant and shut down. The CannaHelp dispensary was located in Palm Desert. It was searched and closed down early in 2007. The owner and two managers were then prosecuted for marijuana sales and possession of marijuana for the purpose of sale. However, a judge granted their motion to quash the search warrant and dismissed the charges. The District Attorney's Office then appealed to the Fourth District Court of Appeal. Presently, the Office is waiting for oral arguments to be scheduled. Dispensaries in the county have also been closed by court order. The Healing Nations Collective was located in Corona. The owner lied about the nature of the business in his application for a license. The city pursued and obtained an injunction that required the business to close. The owner appealed to the Fourth District Court of Appeal, which ruled against him. (City of Corona v. Ronald Naulls et al., Case No. E042772.) 3. MEDICAL MARIJUANA DISPENSARY ISSUES IN CONTRA COSTA COUNTY CITIES AND IN OTHER BAY AREA COUNTIES Several cities in Contra Costa County, California have addressed this issue by either banning dispensaries, enacting moratoria against them, regulating them, or taking a position that they are simply not a permitted land use because they violate federal law. Richmond, El Cerrito, San Pablo, Hercules, and Concord have adopted permanent ordinances banning the establishment of marijuana dispensaries. Antioch, Brentwood, Oakley, Pinole, and Pleasant Hill have imposed moratoria against dispensaries. Clayton, San Ramon, and Walnut Creek have not taken any formal action regarding the establishment of marijuana dispensaries but have indicated that marijuana dispensaries © 2009 California Police Chiefs Assn. 24 All Rights Reserved 65A-85 are not a permitted use in any of their zoning districts as a violation of federal law. Martinez has adopted a permanent ordinance regulating the establishment of marijuana dispensaries. The Counties of Alameda, Santa Clara, and San Francisco have enacted permanent ordinances regulating the establishment of marijuana dispensaries. The Counties of Solano, Napa, and Marin have enacted neither regulations nor bans. A brief overview of the regulations enacted in neighboring counties follows. A. Alameda County Alameda County has a nineteen-page regulatory scheme which allows the operation of three permitted dispensaries in unincorporated portions of the county. Dispensaries can only be located in commercial or industrial zones, or their equivalent, and may not be located within 1,000 feet of other dispensaries, schools, parks, playgrounds, drug recovery facilities, or recreation centers. Permit issuance is controlled by the Sheriff, who is required to work with the Community Development Agency and the Health Care Services agency to establish operating conditions for each applicant prior to final selection. Adverse decisions can be appealed to the Sheriff and are ruled upon by the same panel responsible for setting operating conditions. That panel's decision may be appealed to the Board of Supervisors, whose decision is final (subject to writ review in the Superior Court per CCP sec. 1094.5). Persons violating provisions of the ordinance are guilty of a misdemeanor. B. Santa Clara County In November of 1998, Santa Clara County passed an ordinance permitting dispensaries to exist in unincorporated portions of the county with permits first sought and obtained from the Department of Public Health. In spite of this regulation, neither the County Counsel nor the District Attorney's Drug Unit Supervisor believes that Santa Clara County has had any marijuana dispensaries in operation at least through 2006. The only permitted activities are the on-site cultivation of medical marijuana and the distribution of medical marijuana/medical marijuana food stuffs. No retail sales of any products are permitted at the dispensary. Smoking, ingestion or consumption is also prohibited on site. All doctor recommendations for medical marijuana must be verified by the County's Public Health Department. C. San Francisco County In December of 2001, the Board of Supervisors passed Resolution No. 012006, declaring San Francisco to be a "Sanctuary for Medical Cannabis." City voters passed Proposition S in 2002, directing the city to explore the possibility of establishing a medical marijuana cultivation and distribution program run by the city itself. San Francisco dispensaries must apply for and receive a permit from the Department of Public Health. They may only operate as a collective or cooperative, as defined by California Health and Safety Code section 11362.7 (see discussion in section 4, under "California Law" above), and may only sell or distribute marijuana to members. Cultivation, smoking, and making and selling food products may be allowed. Permit applications are referred to the Departments of Planning, Building Inspection, and Police. Criminal background checks are required but exemptions could still allow the operation of dispensaries by individuals with prior convictions for violent felonies or who have had prior permits suspended or revoked. Adverse decisions can be appealed to the Director of © 2009 California Police Chiefs Assn. 25 All Rights Reserved 65A-86 Public Health and the Board of Appeals. It is unclear how many dispensaries are operating in the city at this time. D. Crime Rates in the Vicinity of MariCare Sheriff's data have been compiled for "Calls for Service" within a half-mile radius of 127 Aspen Drive, Pacheco. However, in research conducted by the El Cerrito Police Department and relied upon by Riverside County in recently enacting its ban on dispensaries, it was recognized that not all crimes related to medical marijuana take place in or around a dispensary. Some take place at the homes of the owners, employees, or patrons. Therefore, these statistics cannot paint a complete picture of the impact a marijuana dispensary has had on crime rates. The statistics show that the overall number of calls decreased (3,746 in 2005 versus 3,260 in 2006). However, there have been increases in the numbers of crimes which appear to be related to a business which is an attraction to a criminal element. Reports of commercial burglaries increased (14 in 2005, 24 in 2006), as did reports of residential burglaries (13 in 2005, 16 in 2006) and miscellaneous burglaries (5 in 2005, 21 in 2006). Tender Holistic Care (THC marijuana dispensary formerly located on N. Buchanan Circle in Pacheco) was forcibly burglarized on June 11, 2006. $4,800 in cash was stolen, along with marijuana, hash, marijuana food products, marijuana pills, marijuana paraphernalia, and marijuana plants. The total loss was estimated to be $16,265. MariCare was also burglarized within two weeks of opening in Pacheco. On April 4, 2006, a window was smashed after 11:00 p.m. while an employee was inside the business, working late to get things organized. The female employee called "911" and locked herself in an office while the intruder ransacked the downstairs dispensary and stole more than $200 worth of marijuana. Demetrio Ramirez indicated that since they were just moving in, there wasn't much inventory. Reports of vehicle thefts increased (4 in 2005, 6 in 2006). Disturbance reports increased in nearly all categories (Fights: 5 in 2005, 7 in 2006; Harassment: 4 in 2005, 5 in 2006; Juveniles: 4 in 2005, 21 in 2006; Loitering: 11 in 2005, 19 in 2006; Verbal: 7 in 2005, 17 in 2006). Littering reports increased from 1 in 2005 to 5 in 2006. Public nuisance reports increased from 23 in 2005 to 26 in 2006. These statistics reflect the complaints and concerns raised by nearby residents. Residents have reported to the District Attorney's Office, as well as to Supervisor Piepho's office, that when calls are made to the Sheriff's Department, the offender has oftentimes left the area before law enforcement can arrive. This has led to less reporting, as it appears to local residents to be a futile act and residents have been advised that law enforcement is understaffed and cannot always timely respond to all calls for service. As a result, Pacheco developed a very active, visible Neighborhood Watch program. The program became much more active in 2006, according to Doug Stewart. Volunteers obtained radios and began frequently receiving calls directly from local businesses and residents who contacted them instead of law enforcement. It is therefore significant that there has still been an increase in many types of calls for law enforcement service, although the overall number of calls has decreased. Other complaints from residents included noise, odors, smoking/consuming marijuana in the area, littering and trash from the dispensary, loitering near a school bus stop and in the nearby church parking lot, observations that the primary patrons of MariCare appear to be individuals under age 25, © 2009 California Police Chiefs Assn. 26 All Rights Reserved 65A-87 and increased traffic. Residents observed that the busiest time for MariCare appeared to be from 4:00 p.m. to 6:00 p.m. On a typical Friday, 66 cars were observed entering MariCare's facility; 49 of these were observed to contain additional passengers. The slowest time appeared to be from 1:00 p.m. to 3:00 p.m. On a typical Saturday, 44 cars were counted during this time, and 29 of these were observed to have additional passengers. MariCare has claimed to serve 4,000 "patients." E. Impact of Proposed Ordinance on MedDelivery Dispensary, El Sobrante It is the position of Contra Costa County District Attorney Robert J. Kochly that a proposed ordinance should terminate operation of the dispensary in El Sobrante because the land use of that business would be inconsistent with both state and federal law. However, the Community Development Department apparently believes that MedDelivery can remain as a "legal, non- conforming use." F. Banning Versus Regulating Marijuana Dispensaries in Unincorporated Contra Costa County It is simply bad public policy to allow the proliferation of any type of business which is illegal and subject to being raided by federal and/or state authorities. In fact, eight locations associated with the New Remedies dispensary in San Francisco and Alameda Counties were raided in October of 2006, and eleven Southern California marijuana clinics were raided by federal agents on January 18, 2007. The Los Angeles head of the federal Drug Enforcement Administration told CBS News after the January raids that "Today's enforcement operations show that these establishments are nothing more than drug-trafficking organizations bringing criminal activities to our neighborhoods and drugs near our children and schools." A Lafayette, California resident who owned a business that produced marijuana-laced foods and drinks for marijuana clubs was sentenced in federal court to five years and 10 months behind bars as well as a $250,000 fine. Several of his employees were also convicted in that case. As discussed above, there is absolutely no exception to the federal prohibition against marijuana cultivation, possession, transportation, use, and distribution. Neither California's voters nor its Legislature authorized the existence or operation of marijuana dispensing businesses when given the opportunity to do so. These enterprises cannot fit themselves into the few, narrow exceptions that were created by the Compassionate Use Act and Medical Marijuana Program Act. Further, the presence of marijuana dispensing businesses contributes substantially to the existence of a secondary market for illegal, street-level distribution of marijuana. This fact was even recognized by the United States Supreme Court: "The exemption for cultivation by patients and caregivers can only increase the supply of marijuana in the California market. The likelihood that all such production will promptly terminate when patients recover or will precisely match the patients' medical needs during their convalescence seems remote; whereas the danger that excesses will satisfy some of the admittedly enormous demand for recreational use seems obvious." (Gonzales v. Raich, supra, 125 S.Ct. at p. 2214.) As outlined below, clear evidence has emerged of such a secondary market in Contra Costa County. In September of 2004, police responded to reports of two men pointing a gun at cars in the parking lot at Monte Vista High School during an evening football game/dance. Two 19-year-old Danville residents were located in the parking lot (which was full of vehicles and pedestrians) and in possession of a silver Airsoft pellet pistol designed to replicate a © 2009 California Police Chiefs Assn. 27 All Rights Reserved 65A-88 real Walther semi-automatic handgun. Marijuana, hash, and hash oil with typical dispensary packaging and labeling were also located in the car, along with a gallon bottle of tequila (1/4 full), a bong with burned residue, and rolling papers. The young men admitted to having consumed an unknown amount of tequila at the park next to the school and that they both pointed the gun at passing cars "as a joke." They fired several BBs at a wooden fence in the park when there were people in the area. The owner of the vehicle admitted that the marijuana was his and that he was not a medicinal marijuana user. He was able to buy marijuana from his friend "Brandon," who used a Proposition 215 card to purchase from a cannabis club in Hayward. In February of 2006, Concord police officers responded to a report of a possible drug sale in progress. They arrested a high school senior for two outstanding warrants as he came to buy marijuana from the cannabis club located on Contra Costa Boulevard. The young man explained that he had a cannabis club card that allowed him to purchase marijuana, and admitted that he planned to re-sell some of the marijuana to friends. He also admitted to possession of nearly 7 grams of cocaine which was recovered. A 21-year-old man was also arrested on an outstanding warrant. In his car was a marijuana grinder, a baggie of marijuana, rolling papers, cigars, and a "blunt" (hollowed out cigar filled with marijuana for smoking) with one end burned. The 21-year-old admitted that he did not have a physician's recommendation for marijuana. Also in February of 2006, a 17-year-old Monte Vista High School senior was charged with felony furnishing of marijuana to a child, after giving a 4-year-old boy a marijuana- laced cookie. The furnishing occurred on campus, during a child development class. In March of 2006, police and fire responded to an explosion at a San Ramon townhouse and found three young men engaged in cultivating and manufacturing "honey oil" for local pot clubs. Marijuana was also being sold from the residence. Honey oil is a concentrated form of cannabis chemically extracted from ground up marijuana with extremely volatile butane and a special "honey oil" extractor tube. The butane extraction operation exploded with such force that it blew the garage door partially off its hinges. Sprinklers in the residence kept the fire from spreading to the other homes in the densely packed residential neighborhood. At least one of the men was employed by Ken Estes, owner of the Dragonfly Holistic Solutions pot clubs in Richmond, San Francisco, and Lake County. They were making the "honey oil" with marijuana and butane that they brought up from one of Estes' San Diego pot clubs after it was shut down by federal agents. Also in March of 2006, a 16-year-old El Cerrito High School student was arrested after selling pot cookies to fellow students on campus, many of whom became ill. At least four required hospitalization. The investigation revealed that the cookies were made with a butter obtained outside a marijuana dispensary (a secondary sale). Between March of 2004 and May of 2006, the El Cerrito Police Department conducted seven investigations at the high school and junior high school, resulting in the arrest of eight juveniles for selling or possessing with intent to sell marijuana on or around the school campuses. In June of 2006, Moraga police officers made a traffic stop for suspected driving under the influence of alcohol. The car was seen drifting over the double yellow line separating north and southbound traffic lanes and driving in the bike lane. The 20-year-old driver denied having consumed any alcohol, as he was the "designated driver." When asked about his bloodshot, watery, and droopy eyes, the college junior explained that he had © 2009 California Police Chiefs Assn. 28 All Rights Reserved 65A-89 smoked marijuana earlier (confirmed by blood tests). The young man had difficulty performing field sobriety tests, slurred his speech, and was ultimately arrested for driving under the influence. He was in possession of a falsified California Driver's License, marijuana, hash, a marijuana pipe, a scale, and $12,288. The marijuana was in packaging from the Compassionate Collective of Alameda County, a Hayward dispensary. He explained that he buys the marijuana at "Pot Clubs," sells some, and keeps the rest. He only sells to close friends. About $3,000 to $4,000 of the cash was from playing high- stakes poker, but the rest was earned selling marijuana while a freshman at Arizona State University. The 18-year-old passenger had half an ounce of marijuana in her purse and produced a doctor's recommendation to a marijuana club in Oakland, the authenticity of which could not be confirmed. Another significant concern is the proliferation of marijuana usage at community schools. In February of 2007, the Healthy Kids Survey for Alameda and Contra Costa Counties found that youthful substance abuse is more common in the East Bay's more affluent areas. These areas had higher rates of high school juniors who admitted having been high from drugs. The regional manager of the study found that the affluent areas had higher alcohol and marijuana use rates. USA Today recently reported that the percentage of 12`h Grade students who said they had used marijuana has increased since 2002 (from 33.6% to 36.2% in 2005), and that marijuana was the most-used illicit drug among that age group in 2006. KSDK News Channel 5 reported that high school students are finding easy access to medical marijuana cards and presenting them to school authorities as a legitimate excuse for getting high. School Resource Officers for Monte Vista and San Ramon Valley High Schools in Danville have reported finding marijuana in prescription bottles and other packaging from Alameda County dispensaries. Marijuana has also been linked to psychotic illnesses.101 A risk factor was found to be starting marijuana use in adolescence. For all of the above reasons, it is advocated by District Attorney Kochly that a ban on land uses which violate state or federal law is the most appropriate solution for the County of Contra Costa. 4. SANTA BARBARA COUNTY According to Santa Barbara County Deputy District Attorney Brian Cota, ten marijuana dispensaries are currently operating within Santa Barbara County. The mayor of the City of Santa Barbara, who is an outspoken medical marijuana supporter, has stated that the police must place marijuana behind every other police priority. This has made it difficult for the local District Attorney's Office. Not many marijuana cases come to it for filing. The District Attorney's Office would like more regulations placed on the dispensaries. However, the majority of Santa Barbara County political leaders and residents are very liberal and do not want anyone to be denied access to medical marijuana if they say they need it. Partly as a result, no dispensaries have been prosecuted to date. 5. SONOMA COUNTY Stephan R. Passalocqua, District Attorney for the County of Sonoma, has recently reported the following information related to distribution of medical marijuana in Sonoma County. In 1997, the Sonoma County Law Enforcement Chiefs Association enacted the following medical marijuana guidelines: a qualified patient is permitted to possess three pounds of marijuana and grow 99 plants in a 100-square-foot canopy. A qualified caregiver could possess or grow the above-mentioned amounts for each qualified patient. These guidelines were enacted after Proposition 215 was overwhelmingly passed by the voters of California, and after two separate unsuccessful prosecutions in Sonoma County. Two Sonoma County juries returned "not guilty" verdicts for three defendants © 2009 California Police Chiefs Assn. 29 All Rights Reserved 65A-90 who possessed substantially large quantities of marijuana (60 plants in one case and over 900 plants in the other) where they asserted a medical marijuana defense. These verdicts, and the attendant publicity, demonstrated that the community standards are vastly different in Sonoma County compared to other jurisdictions. On November 6, 2006, and authorized by Senate Bill 420, the Sonoma County Board of Supervisors specifically enacted regulations that allow a qualified person holding a valid identification card to possess up to three pounds of dried cannabis a year and cultivate 30 plants per qualified patient. No individual from any law enforcement agency in Sonoma County appeared at the hearing, nor did any representative publicly oppose this resolution. With respect to the People v. Sashon Jenkins case, the defendant provided verified medical recommendations for five qualified patients prior to trial. At the time of arrest, Jenkins said that he had a medical marijuana card and was a care provider for multiple people, but was unable to provide specific documentation. Mr. Jenkins had approximately 10 pounds of dried marijuana and was growing 14 plants, which number of plants is consistent with the 2006 Sonoma County Board of Supervisors' resolution. At a preliminary hearing held In January of 2007, the defense called five witnesses who were proffered as Jenkins' "patients" and who came to court with medical recommendations. Jenkins also testified that he was their caregiver. After the preliminary hearing, the assigned prosecutor conducted a thorough review of the facts and the law, and concluded that a Sonoma County jury would not return a "guilty" verdict in this case. Hence, no felony information was filed. With respect to the return of property issue, the prosecuting deputy district attorney never agreed to release the marijuana despite dismissing the case. Other trial dates are pending in cases where medical marijuana defenses are being alleged. District Attorney Passalacqua has noted that, given the overwhelming passage of proposition 215, coupled with at least one United States Supreme Court decision that has not struck it down to date, these factors present current challenges for law enforcement, but that he and other prosecutors will continue to vigorously prosecute drug dealers within the boundaries of the law. 6. ORANGE COUNTY There are 15 marijuana dispensaries in Orange County, and several delivery services. Many of the delivery services operate out of the City of Long Beach in Los Angeles County. Orange County served a search warrant on one dispensary, and closed it down. A decision is being made whether or not to file criminal charges in that case. It is possible that the United States Attorney will file on that dispensary since it is a branch of a dispensary that the federal authorities raided in San Diego County. The Orange County Board of Supervisors has ordered a study by the county's Health Care Department on how to comply with the Medical Marijuana Program Act. The District Attorney's Office's position is that any activity under the Medical Marijuana Program Act beyond the mere issuance of identification cards violates federal law. The District Attorney's Office has made it clear to County Counsel that if any medical marijuana provider does not meet a strict definition of "primary caregiver" that person will be prosecuted. © 2009 California Police Chiefs Assn. 30 All Rights Reserved 65A-91 PENDING LEGAL QUESTIONS Law enforcement agencies throughout the state, as well as their legislative bodies, have been struggling with how to reconcile the Compassionate Use Act ("CUA"), Cal. Health & Safety Code secs. 11362.5, et seq., with the federal Controlled Substances Act ("CSA"), 21 U.S.C. sec. 801, et seq., for some time. Pertinent questions follow. QUESTION 1. Is it possible for a storefront marijuana dispensary to be legally operated under the Compassionate Use Act of 1996 (Health & Saf. Code sec. 11362.5) and the Medical Marijuana Program Act (Health & Saf. Code secs. 11362.7- 11362.83? ANSWER 1. Storefront marijuana dispensaries may be legally operated under the CUA and the Medical Marijuana Program Act ("MMPA"), Cal. Health & Safety Code secs. 11362.7-11362.83, as long as they are "cooperatives" under the MMPA. ANALYSIS The question posed does not specify what services or products are available at a "storefront" marijuana dispensary. The question also does not specify the business structure of a "dispensary." A "dispensary" is often commonly used nowadays as a generic term for a facility that distributes medical marijuana. The term "dispensary" is also used specifically to refer to marijuana facilities that are operated more like a retail establishment, that are open to the public and often "sell" medical marijuana to qualified patients or caregivers. By use of the term "store front dispensary," the question may be presuming that this type of facility is being operated. For purposes of this analysis, we will assume that a "dispensary" is a generic term that does not contemplate any particular business structure.' Based on that assumption, a "dispensary" might provide "assistance to a qualified patient or a person with an identification card, or his or her designated primary caregiver, in administering medical marijuana to the qualified patient or person or acquiring the skills necessary to cultivate or administer marijuana for medical purposes to the qualified patient or person" and be within the permissible limits of the CUA and the MMPA. (Cal. Health & Safety Code sec. 11362.765 (b)(3).) ' As the term "dispensary" is commonly used and understood, marijuana dispensaries would not be permitted under the CUA or the MMPA, since they "sell" medical marijuana and are not operated as true "cooperatives." © 2009 California Police Chiefs Assn. 31 All Rights Reserved 65A-92 The CUA permits a "patient" or a "patient's primary caregiver" to possess or cultivate marijuana for personal medical purposes with the recommendation of a physician. (Cal. Health & Safety Code sec. 11362.5 (d).) Similarly, the MMPA provides that "patients" or designated "primary caregivers" who have voluntarily obtained a valid medical marijuana identification card shall not be subject to arrest for possession, transportation, delivery, or cultivation of medical marijuana in specified quantities. (Cal. Health & Safety Code sec. 11362.71 (d) & (e).) A "storefront dispensary" would not fit within either of these categories. However, the MMPA also provides that "[q]ualified patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards, who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes, shall not solely on the basis of that fact be subject to state criminal sanctions under section 11357 [possession], 11358 [planting, harvesting or processing], 11359 [possession for sale], 11360 [unlawful transportation, importation, sale or gift], 11366 [opening or maintaining place for trafficking in controlled substances], 11366.5 [providing place for manufacture or distribution of controlled substance; Fortifying building to suppress law enforcement entry], or 11570 [Buildings or places deemed nuisances subject to abatement]." (Cal. Health & Safety Code sec. 11362.775.) (Emphasis added).) Since medical marijuana cooperatives are permitted pursuant to the MMPA, a "storefront dispensary" that would qualify as a cooperative would be permissible under the MMPA. (Cal. Health & Safety Code sec. 11362.775. See also People v. Urziceanu (2005) 132 Cal. App. 4th 747 (finding criminal defendant was entitled to present defense relating to operation of medical marijuana cooperative).) In granting a re-trial, the appellate court in Urziceanu found that the defendant could present evidence which might entitle him to a defense under the MMPA as to the operation of a medical marijuana cooperative, including the fact that the "cooperative" verified physician recommendations and identities of individuals seeking medical marijuana and individuals obtaining medical marijuana paid membership fees, reimbursed defendant for his costs in cultivating the medical marijuana by way of donations, and volunteered at the "cooperative." (Id. at p. 785.) Whether or not "sales" are permitted under Urziceanu and the MMPA is unclear. The Urziceanu Court did note that the incorporation of section 11359, relating to marijuana "sales," in section 11362.775, allowing the operation of cooperatives, "contemplates the formation and operation of medicinal marijuana cooperatives that would receive reimbursement for marijuana and the services provided in conjunction with the provision of that marijuana." Whether "reimbursement" may be in the form only of donations, as were the facts presented in Urziceanu, or whether "purchases" could be made for medical marijuana, it does seem clear that a medical marijuana "cooperative" may not make a "profit," but may be restricted to being reimbursed for actual costs in providing the marijuana to its members and, if there are any "profits," these may have to be reinvested in the "cooperative" or shared by its members in order for a dispensary to © 2009 California Police Chiefs Assn. 32 All Rights Reserved 65A-93 be truly considered to be operating as a "cooperative. "2 If these requirements are satisfied as to a "storefront" dispensary, then it will be permissible under the MMPA. Otherwise, it will be a violation of both the CUA and the MMPA. QUESTION If the governing body of a city, county, or city and county approves an ordinance authorizing and regulating marijuana dispensaries to implement the Compassionate Use Act of 1996 and the Medical Marijuana Program Act, can an individual board or council member be found to be acting illegally and be subject to federal criminal charges, including aiding and abetting, or state criminal charges? ANSWER 2. If a city, county, or city and county authorizes and regulates marijuana dispensaries, individual members of the legislative bodies may be held criminally liable under state or federal law.3 ANALYSIS A. Federal Law Generally, legislators of federal, state, and local legislative bodies are absolutely immune from liability for legislative acts. (U.S. Const., art. I, sec. 6 (Speech and Debate Clause, applicable to members of Congress); Fed. Rules Evid., Rule 501 (evidentiary privilege against admission of legislative acts); Tenney v. Brandhove (1951) 341 U. S. 367 (legislative immunity applicable to state legislators); Bogan v. Scott-Harris (1998) 523 U.S. 44 (legislative immunity applicable to local legislators).) However, while federal legislators are absolutely immune from both criminal and civil liability for purely legislative acts, local legislators are only immune from civil liability under federal law. (United States v. Gillock (1980) 445 U.S. 360.) Where the United States Supreme Court has held that federal regulation of marijuana by way of the CSA, including any "medical" use of marijuana, is within Congress' Commerce Clause power, federal law stands as a bar to local action in direct violation of the CSA. (Gonzales v. Raich (2005) 545 U.S. 1.) In fact, the CSA itself provides that federal regulations do not ` A "cooperative" is defined as follows: An enterprise or organization that is owned or managed jointly by those who use its facilities or services. THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE, by Houghton Mifflin Company (4th Ed. 2000). ' Indeed, the same conclusion would seem to result from the adoption by state legislators of the MMPA itself, in authorizing the issuance of medical marijuana identification cards. (Cal. Health & Safety Code secs. 113 et seq.) © 2009 California Police Chiefs Assn. 33 All Rights Reserved 65A-94 exclusively occupy the field of drug regulation "unless there is a positive conflict between that provision of this title [the CSA] and that state law so that the two cannot consistently stand together." (21 U.S.C. sec. 903.) Based on the above provisions, then, legislative action by local legislators could subject the individual legislators to federal criminal liability. Most likely, the only violation of the CSA that could occur as a result of an ordinance approved by local legislators authorizing and regulating medical marijuana would be aiding and abetting a violation of the CSA. The elements of the offense of aiding and abetting a criminal offense are: (1) specific intent to facilitate commission of a crime by another; (2) guilty knowledge on the part of the accused; (3) that an offense was being committed by someone; and (4) that the accused assisted or participated in the commission of an offense. (United States v. Raper (1982) 676 F.2d 841; United States v. Staten (1978) 581 F.2d 878.) Criminal aiding and abetting liability, under 18 U.S.C. section 2, requires proof that the defendants in some way associated themselves with the illegal venture; that they participated in the venture as something that they wished to bring about; and that they sought by their actions to make the venture succeed. (Central Bank, N.A. v. First Interstate Bank, N.A. (1994) 511 U.S. 164.) Mere furnishing of company to a person engaged in a crime does not render a companion an aider or abettor. (United States v. Garguilo (2d Cir. 1962) 310 F.2d 249.) In order for a defendant to be an aider and abettor he must know that the activity condemned by law is actually occurring and must intend to help the perpetrator. (United States v. McDaniel (9th Cir. 1976) 545 F.2d 642.) To be guilty of aiding and abetting, the defendant must willfully seek, by some action of his own, to make a criminal venture succeed. (United States v. Ehrenberg (E.D. Pa. 1973) 354 F. Supp. 460 cert. denied (1974) 94 S. Ct. 1612.) The question, as posed, may presume that the local legislative body has acted in a manner that affirmatively supports marijuana dispensaries. As phrased by Senator Kuehl, the question to be answered by the Attorney General's Office assumes that a local legislative body has adopted an ordinance that "authorizes" medical marijuana facilities. What if a local public entity adopts an ordinance that explicitly indicates that it does not authorize, legalize, or permit any dispensary that is in violation of federal law regarding controlled substances? If the local public entity grants a permit, regulates, or imposes locational requirements on marijuana dispensaries with the announced understanding that it does not thereby allow any illegal activity and that dispensaries are required to comply with all applicable laws, including federal laws, then the public entity should be entitled to expect that all laws will be obeyed. It would seem that a public entity is not intentionally acting to encourage or aid acts in violation of the CSA merely because it has adopted an ordinance which regulates dispensaries; even the issuance of a "permit," if it is expressly not allowing violations of federal law, cannot necessarily support a charge or conviction of aiding and abetting violation of the CSA. A public entity should be entitled to presume that dispensaries will obey all applicable laws and that lawful business will be conducted at dispensaries. For instance, dispensaries could very well not engage in actual medical marijuana distribution, but instead engage in education and awareness activities as to the medical effects of marijuana; the sale of other, legal products that aid in the suffering of © 2009 California Police Chiefs Assn. 34 All Rights Reserved 65A-95 ailing patients; or even activities directed at effecting a change in the federal laws relating to regulation of marijuana as a Schedule I substance under the CSA. These are examples of legitimate business activities, and First Amendment protected activities at that, in which dispensaries could engage relating to medical marijuana, but not apparently in violation of the CSA. Public entities should be entitled to presume that legitimate activities can and will be engaged in by dispensaries that are permitted and/or regulated by local regulations. In fact, it seems counterintuitive that local public entities within the state should be expected to be the watchdogs of federal law; in the area of controlled substances, at least, local public entities do not have an affirmative obligation to discern whether businesses are violating federal law. The California Attorney General's Office will note that the State Board of Equalization ("BOE") has already done precisely what has been suggested in the preceding paragraph. In a special notice issued by the BOE this year, it has indicated that sellers of medical marijuana must obtain a seller's permit. (See http://www.boe.ca.gov/news/pdf/medseller2007.pdf (Special Notice: Important Information for Sellers of Medical Marijuana).) As the Special Notice explicitly indicates to medical marijuana facilities, "[h]aving a seller's permit does not mean you have authority to make unlawful sales. The permit only provides a way to remit any sales and use taxes due. The permit states, 'NOTICE TO PERMITTEE: You are required to obey all federal and state laws that regulate or control your business. This permit does not allow you to do otherwise."' The above being said, however, there is no guarantee that criminal charges would not actually be brought by the federal government or that persons so charged could not be successfully prosecuted. It does seem that arguments contrary to the above conclusions could be persuasive in convicting local legislators. By permitting and/or regulating marijuana dispensaries by local ordinance, some legitimacy and credibility may be granted by governmental issuance of permits or authorizing and allowing dispensaries to exist or locate within a jurisdiction.4 All of this discussion, then, simply demonstrates that individual board or council members can, indeed, be found criminally liable under federal law for the adoption of an ordinance authorizing and regulating marijuana dispensaries that promote the use of marijuana as medicine. The actual likelihood of prosecution, and its potential success, may depend on the particular facts of the regulation that is adopted. ' Of course, the question arises as to how far any such liability be taken. Where can the line be drawn between any permit or regulation adopted specifically with respect to marijuana dispensaries and other permits or approvals routinely, and often ministerially, granted by local public entities, such as building permits or business licenses, which are discussed infra? If local public entities are held responsible for adopting an ordinance authorizing and/or regulating marijuana dispensaries, cannot local public entities also be subject to liability for providing general public services for the illegal distribution of "medical" marijuana? Could a local public entity that knew a dispensary was distributing "medical" marijuana in compliance with state law be criminally liable if it provided electricity, water, and trash services to that dispensary? How can such actions really be distinguished from the adoption of an ordinance that authorizes and/or regulates marijuana dispensaries? © 2009 California Police Chiefs Assn. 35 All Rights Reserved 65A-96 B. State Law Similarly, under California law, aside from the person who directly commits a criminal offense, no other person is guilty as a principal unless he aids and abets. (People v. Dole (1898) 122 Cal. 486; People v. Stein (1942) 55 Cal. App. 2d 417.) A person who innocently aids in the commission of the crime cannot be found guilty. (People v. Fredoni (1910) 12 Cal. App. 685.) To authorize a conviction as an aider and abettor of crime, it must be shown not only that the person so charged aided and assisted in the commission of the offense, but also that he abetted the act- that is, that he criminally or with guilty knowledge and intent aided the actual perpetrator in the commission of the act. (People v. Terman (1935) 4 Cal. App. 2d 345.) To "abet" another in commission of a crime implies a consciousness of guilt in instigating, encouraging, promoting, or aiding the commission of the offense. (People v. Best (1941) 43 Cal. App. 2d 100.) "Abet" implies knowledge of the wrongful purpose of the perpetrator of the crime. (People v. Stein, supra.) To be guilty of an offense committed by another person, the accused must not only aid such perpetrator by assisting or supplementing his efforts, but must, with knowledge of the wrongful purpose of the perpetrator, abet by inciting or encouraging him. (People v. Le Grant (1946) 76 Cal. App. 2d 148, 172; People v. Carlson (1960) 177 Cal. App. 2d 201.) The conclusion under state law aiding and abetting would be similar to the analysis above under federal law. Similar to federal law immunities available to local legislators, discussed above, state law immunities provide some protection for local legislators. Local legislators are certainly immune from civil liability relating to legislative acts; it is unclear, however, whether they would also be immune from criminal liability. (Steiner v. Superior Court, 50 Cal.AppAth 1771 (assuming, but finding no California authority relating to a "criminal" exception to absolute immunity for legislators under state law) .)5 Given the apparent state of the law, local legislators could only be certain that they would be immune from civil liability and could not be certain that ' Although the Steiner Court notes that "well-established federal law supports the exception," when federal case authority is applied in a state law context, there may be a different outcome. Federal authorities note that one purpose supporting criminal immunity as to federal legislators from federal prosecution is the separation of powers doctrine, which does not apply in the context of federal criminal prosecution of local legislators. However, if a state or county prosecutor brought criminal charges against a local legislator, the separation of powers doctrine may bar such prosecution. (Cal. Const., art. III, sec. 3.) As federal authorities note, bribery, or other criminal charges that do not depend upon evidence of, and cannot be said to further, any legislative acts, can still be prosecuted against legislators. (See Bruce v. Riddle (4th Cir. 1980) 631 F.2d 272, 279 ["Illegal acts such as bribery are obviously not in aid of legislative activity and legislators can claim no immunity for illegal acts."]; United States v. Brewster, 408 U.S. 501 [indictment for bribery not dependent upon how legislator debated, voted, or did anything in chamber or committee; prosecution need only show acceptance of money for promise to vote, not carrying through of vote by legislator]; United States v. Swindall (11th Cir. 1992) 971 F.2d © 2009 California Police Chiefs Assn. 36 All Rights Reserved 65A-97 they would be at all immune from criminal liability under state law. However, there would not be any criminal violation if an ordinance adopted by a local public entity were in compliance with the CUA and the MMPA. An ordinance authorizing and regulating medical marijuana would not, by virtue solely of its subject matter, be a violation of state law; only if the ordinance itself permitted some activity inconsistent with state law relating to medical marijuana would there be a violation of state law that could subject local legislators to criminal liability under state law. QUESTION If the governing body of a city, city and county, or county approves an ordinance authorizing and regulating marijuana dispensaries to implement the Compassionate Use Act of 1996 and the Medical Marijuana Program Act, and subsequently a particular dispensary is found to be violating state law regarding sales and trafficking of marijuana, could an elected official on the governing body be guilty of state criminal charges? ANSWER After adoption of an ordinance authorizing or regulating marijuana dispensaries, elected officials could not be found criminally liable under state law for the subsequent violation of state law by a particular dispensary. ANALYSIS Based on the state law provisions referenced above relating to aiding and abetting, it does not seem that a local public entity would be liable for any actions of a marijuana dispensary in violation of state law. Since an ordinance authorizing and/or regulating marijuana dispensaries would necessarily only be authorizing and/or regulating to the extent already permitted by state law, local elected officials could not be found to be aiding and abetting a violation of state law. In fact, the MMPA clearly contemplates local regulation of dispensaries. (Cal. Health & Safety Code sec. 11362.83 ("Nothing in this article shall prevent a city or other local governing body from adopting and enforcing laws consistent with this article.").) Moreover, as discussed above, there may be legislative immunity applicable to the legislative acts of individual elected officials in adopting an ordinance, especially where it is consistent with state law regarding marijuana dispensaries that dispense crude marijuana as medicine. 1531, 1549 [evidence of legislative acts was essential element of proof and thus immunity applies].) Therefore, a criminal prosecution that relates solely to legislative acts cannot be maintained under the separation of powers rationale for legislative immunity. © 2009 California Police Chiefs Assn. 37 All Rights Reserved 65A-98 QUESTION 4. Does approval of such an ordinance open the jurisdictions themselves to civil or criminal liability? ANSWER 4. Approving an ordinance authorizing or regulating marijuana dispensaries may subject the jurisdictions to civil or criminal liability. ANALYSIS Under federal law, criminal liability is created solely by statute. (Dowling v. United States (1985) 473 U.S. 207, 213.) Although becoming more rare, municipalities have been, and still may be, criminally prosecuted for violations of federal law, where the federal law provides not just a penalty for imprisonment, but a penalty for monetary sanctions. (See Green, Stuart P., The Criminal Prosecution of Local Governments, 72 N.C. L. Rev. 1197 (1994) (discussion of history of municipal criminal prosecution).) The CSA prohibits persons from engaging in certain acts, including the distribution and possession of Schedule I substances, of which marijuana is one. (21 U.S.C. sec. 841.) A person, for purposes of the CSA, includes "any individual, corporation, government or governmental subdivision or agency, business trust, partnership, association, or other legal entity." (21 C.F.R. sec. 1300.01 (34). See also 21 C.F.R. sec. 1301.02 ("Any term used in this part shall have the definition set forth in section 102 of the Act (21 U.S.C. 802) or part 1300 of this chapter.").) By its very terms, then, the CSA may be violated by a local public entity. If the actions of a local public entity otherwise satisfy the requirements of aiding and abetting a violation of the CSA, as discussed above, then local public entities may, indeed, be subject to criminal prosecution for a violation of federal law. Under either federal or state law, local public entities would not be subject to civil liability for the mere adoption of an ordinance, a legislative act. As discussed above, local legislators are absolutely immune from civil liability for legislative acts under both federal and state law. In addition, there is specific immunity under state law relating to any issuance or denial of permits. QUESTION Does the issuance of a business license to a marijuana dispensary involve any additional civil or criminal liability for a city or county and its elected governing body? ANSWER 5. Local public entities will likely not be liable for the issuance of business licenses to marijuana dispensaries that plan to dispense crude marijuana as medicine. © 2009 California Police Chiefs Assn. 38 All Rights Reserved 65A-99 ANALYSIS Business licenses are imposed by cities within the State of California oftentimes solely for revenue purposes, but are permitted by state law to be imposed for revenue, regulatory, or for both revenue and regulatory purposes. (Cal. Gov. Code sec. 37101.) Assuming a business license ordinance is for revenue purposes only, it seems that a local public entity would not have any liability for the mere collection of a tax, whether on legal or illegal activities. However, any liability that would attach would be analyzed the same as discussed above. In the end, a local public entity could hardly be said to have aided and abetted the distribution or possession of marijuana in violation of the CSA by its mere collection of a generally applicable tax on all business conducted within the entity's jurisdiction. OVERALL FINDINGS All of the above further exemplifies the catch-22 in which local public entities are caught, in trying to reconcile the CUA and MMPA, on the one hand, and the CSA on the other. In light of the existence of the CUA and the MMPA, and the resulting fact that medical marijuana is being used by individuals in California, local public entities have a need and desire to replate the location and operation of medical marijuana facilities within their jurisdiction.6 10 However, because of the divergent views of the CSA and California law regarding whether there is any accepted "medical" use of marijuana, state and local legislators, as well as local public entities themselves, could be subject to criminal liability for the adoption of statutes or ordinances furthering the possession, cultivation, distribution, transportation (and other act prohibited under the CSA) as to marijuana. Whether federal prosecutors would pursue federal criminal charges against state and/or local legislators or local public entities remains to be seen. But, based on past practices of locally based U.S. Attorneys who have required seizures of large amounts of marijuana before federal filings have been initiated, this can probably be considered unlikely. ° Several compilations of research regarding the impacts of marijuana dispensaries have been prepared by the California Police Chiefs Association and highlight some of the practical issues facing local public entities in regulating these facilities. Links provided are as follows: "Riverside County Office of the District Attorney," [White Paper, Medical Marijuana: History and Current Complications, September 2006];"Recent Information Regarding Marijuana and Dispensaries [El Cerrito Police Department Memorandum, dated January 12, 2007, from Commander M. Regan, to Scott C. Kirkland, Chief of Police]; "Marijuana Memorandum" [El Cerrito Police Department Memorandum, dated April 18, 2007, from Commander M. Regan, to Scott C. Kirkland, Chief of Police]; "Law Enforcement Concerns to Medical Marijuana Dispensaries" [Impacts of Medical Marijuana Dispensaries on communities between 75,000 and 100,000 population: Survey and council agenda report, City of Livermore]. © 2009 California Police Chiefs Assn. 39 All Rights Reserved 65A-100 CONCLUSIONS In light of the United States Supreme Court's decision and reasoning in Gonzales v. Raich, the United States Supremacy Clause renders California's Compassionate Use Act of 1996 and Medical Marijuana Program Act of 2004 suspect. No state has the power to grant its citizens the right to violate federal law. People have been, and continue to be, federally prosecuted for marijuana crimes. The authors of this White Paper conclude that medical marijuana is not legal under federal law, despite the current California scheme, and wait for the United States Supreme Court to ultimately rule on this issue. Furthermore, storefront marijuana businesses are prey for criminals and create easily identifiable victims. The people growing marijuana are employing illegal means to protect their valuable cash crops. Many distributing marijuana are hardened criminals. 103 Several are members of stepped criminal street gangs and recognized organized crime syndicates, while others distributing marijuana to the businesses are perfect targets for thieves and robbers. They are being assaulted, robbed, and murdered. Those buying and using medical marijuana are also being victimized. Additionally, illegal so-called "medical marijuana dispensaries" have the potential for creating liability issues for counties and cities. All marijuana dispensaries should generally be considered illegal and should not be permitted to exist and engage in business within a county's or city's borders. Their presence poses a clear violation of federal and state law; they invite more crime; and they compromise the health and welfare of law-abiding citizens. © 2009 California Police Chiefs Assn. 40 All Rights Reserved 65A-101 ENDNOTES 1 U.S. Const.. art. VI, cl. 2. 2 U.S. Const., art. I, sec. 8, cl. 3. 3 Gonzales v. Raich (2005) 125 S.Ct. 2195 at p. 2204. 4 Gonzales v. Raich. See also United States v. Oakland Cannabis Buyers' Cooperative (2001) 121 S.Ct. 1711, 1718. 5 Gonzales v. Raich (2005) 125 S.Ct. 2195; see also United States v. Oakland Cannabis Buyers' Cooperative 121 S.Ct. 1711. 6 Josh Meyer & Scott Glover, "U.S. won't prosecute medical pot sales," Los Angeles Times, 19 March 2009, available at http: !www.latimes.cominews,1ocalila-me-medpotI9-2009mar19.0.498757 Lstory 'See People v. Mower (2002) 28 CalAth 457, 463. 8 Health and Safety Code section 11362.5(b) (1) (A). All references hereafter to the Health and Safety Code are by section number only. 9 H&S Code sec. 11362.5(a). 10 H&S Code sec. 11362.7 et. seq. 11 H&S Code sec. 11362.7. 12 H&S Code secs. 11362.71-11362.76. 13 H&S Code sec. 11362.77. 14 H&S Code secs. 11362.765 and 11362.775; People v. Urziceanu (2005) 132 Cal.App.4`h 747 at p. 786. 15 H&S Code sec. 11362.77; whether or not this section violates the California Constitution is currently under review by the California Supreme Court. See People v. Kelly (2008) 82 Cal.Rptr.3d 167 and People v. Phomphakdy (2008) 85 Cal.Rptr. 3d 693. 16 H&S Code secs. 11357, 11358, 11359, 11360, 11366, 11366.5, and 11570. 17 H&S Code sec. 11362.7(h) gives a more comprehensive list -AIDS, anorexia, arthritis, cachexia, cancer, chronic pain, glaucoma, migraine, persistent muscle spasms, seizures, severe nausea, and any other chronic or persistent medical symptom that either substantially limits the ability of a person to conduct one or more life activities (as defined in the ADA) or may cause serious harm to the patient's safety or physical or mental health if not alleviated. 18 People v. Mower (2002) 28 CalAth 457 at p. 476. 19 Id. Emphasis added. 20 Packel, Organization and Operation of Cooperatives, 5th ed. (Philadelphia: American Law Institute, 1970),4-5. 2t Sam Stanton, "Pot Clubs, Seized Plants, New President-Marijuana's Future Is Hazy," Sacramento Bee, 7 December 2008, 19A. 22 For a statewide list, see http://canorml.org/prop/cbclist.html. 23 Laura McClure, "Fuming Over the Pot Clubs," California Lawyer Magazine, June 2006. 24 H&S Code sec. 11362.765(c); see, e.g., People v. Urziceanu, 132 Cal.App.4th 747 at p. 764. 25 Gonzales v. Raich, supra, 125 S.Ct. at page 2195. 26 People v. Urziceanu (2005) 132 Cal.AppAth 747; see also H&S Code sec. 11362.765. n Israel Packel, 4-5. Italics added. 28 H&S Code sec. 11362.7(d)(1). 29 See, e.g., McClure, "Fuming Over Pot Clubs," California Lawyer Magazine, June 2006. 30 H&S Code secs. I I362.5(e) and I I362.7(d)(1), (2),(3), and (e); see also People ex rel. Lungren v. Peron (1997) 59 Cal.App.4th 1383, 1395. 31 People v. Mower, 28 Cal.4th at 476. Emphasis added. 32 Glenda Anderson, "Laytonville Marijuana Guru Shot to Death: 2 Others Beaten in Home; No Suspects but Officials Believe Killing Related to Pot Growing," Santa Rosa Press Democrat, 19 November 2005, available at http:;!wwwl pressdemocrat comiapps?pbcs.dlliarticle7A1D=i20051119iNEWS/5 11190303/1033/ 33 "Medical Marijuana Shop Robbed," Santa Barbara Independent, 10 August 2006, available at Imp: independent.con3/news%2006%au?-1'10/medical-marijuana-shop-robbed' 34 Mark Scaramella, "No Good Deed Goes Unpunished," Anderson Valley Advertiser, 16 June 2004, available at http:w w.thewva.cotn/04!0616-cerelli.html © 2009 California Police Chiefs Assn. 41 All Rights Reserved 65A-102 35 Ricci Graham, "Police Arrest Suspect in Deadly San Leandro Pot Club Robbery," Oakland Tribune, 8 August 2006, available at http:I/findarticles.com/p/articlesimi gn4176/is 20060808/ai n t665925 7 36 Ricci Graham, "Man Faces Murder Charge in Pot Robbery," Oakland Tribune, 24 August 2005, available at hap:' www.highbeam.com/doci 1 P2-7021933.html 37 Ricci Graham, "Another Medical Marijuana Clinic Robbed," Oakland Tribune, 10 September 2005, available at http:','findarticles.com/p'ar-ticles/mi gn4176/is 20050910/ai n 15809189;print 38Laura Clark, "Pot Dispensary Owner Slain at Home." Ukiah Daily Journal, 19 November 2007, available at http: %www.marijuana com'drnr«-war-headline-news'24910-ca-pot-dispensarv-owner-slrin-home html 39 Laura Clark, "Breaking News: Medical Marijuana Supplier Les Crane Killed," Ukiah Daily Journal, 19 November 2005; Laura Clark, "Les Crane Murder Investigation Continues," Ukiah Daily Journal, 27 November 2005; Glenda Anderson, "Laytonville Marijuana Guru Shot to Death," Santa Rosa Press Democrat, 19 November 2005; Glenda Anderson, "Pot Activist Likely Knew Killers: Police Believe Gunmen Who Robbed Laytonville Man Familiar With Home," Santa Rosa Press Democrat, 20 November 2005, available at http:www.edualriehts4all.us/content/view/ 192/50/ 40 Mark Scaramella, "The Mendo Pot Chronicles," Anderson Valley Advertiser, 3 October 2007, available at http:wvvvv.theava.com/04%0616-cerelli.hUnl 41 Kirk Johnson, "Killing Highlights Risk of Selling Marijuana, Even Legally," New York Times, 13 March 2007, available at http:, ?www.nvtimes.comi2007,03!02ius/02 can nabis.html?ex=118 1 880000&en=c609936094adda50&ei=5070 42 Tami Abdollah & Richard Winton, "Pot Theft Claimed in Boy's Shooting Death," Los Angeles Times, 23 January 2007, available at http: 'vvvvw.californiapolicechiefs.orL!%nav files marijuana tiles bellflower shooting death pdf 43 Will Bigham, "Claremont Marijuana Dispensary Burglarized," Inland Valley Daily Bulletin, 27 January 2007, available at http: 'www.dailybulletin.con3/ci 5104514 44 Planning Commission Agenda, available at http:i/www.el-cerrito.oru; see also Alan Lopez, "El Cerrito Moves to Ban Dispensaries," Contra Costa Times, 24 June 2006, available at hap: wvvvv,.thc-ministrv.net'fonnr>,'archive/el-cerrito-moves-to-ban-cannabis-clubs-6974 htm 4' Fred Ortega, "City Bans Outlets for Medical Marijuana," San Gabriel Valley Tribune, 17 August 2006, available at http: 'vvww lca-uk or;%lcafonrm/viewtopic phr)"f-6&t=2436&start=0&sid=I?b6dal 15a0da43 facb I 7644195cbb 46 Ortega. 47 Greg Beato, "Pot Clubs in Peril: Are San Francisco Zoning Boards a Bigger Threat to Medical Marijuana Than the DEAT' Reason Magazine, February 2007, available at http:' wvvvv.reason. com; nevvs;'show! l 183 14 html; Craig T. Steckler, City of Fremont Police Department Memorandum re Medical Marijuana Dispensaries - Potential Secondary Impacts, 20 June 2006; Tim Miller, City of Anaheim Police Department: Special Operations Division Memorandum re Medical Mar?uana Dispensary (MMD) Ban Ordinance, 13 June 2007. 48 Jeff McDonald, "15 Held in Raids on Pot Stores," San Diego Union-Tribune, 7 July 2006, available at http:' vvvvw.si,-nonsand ieuo.corn'uniontrib-20060y07inews 7m7 of html 49 McDonald; Beato. 50 Cal. H&S Code sec. 11362.5. 51 Ethan Stewart, "The Medical Marijuana Movement Grows in Santa Barbara: Emerald Dreams and Smoky Realities," Santa Barbara Independent, 3 May 2007, available at Imp: independent.com/news/2007'mav/03;medical-marijuana-movement-grows-Santa-barbara'; see also Adam Ashton, "DEA Busts Pot Store Day After Council Talk," Modesto Bee, 28 September 2006. 52 McDonald. 53 Stewart. 54 Stewart. 55 Stewart. 56 National Drug Intelligence Center, Domestic Cannabis Cultivation Assessment 2007, February 2007; available at http:/'www.usd0i.u0wndicipubs2l'22486/• Jaxon Van Derbeken, Charlie Goodyear, & Rachel Gordon, "3 S.F. Pot Clubs Raided in Probe of Organized Crime," San Francisco Chronicle, 23 June 2005, available at http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/06/23/MNGRODDG321.DTL; LAPD report information, 2007. © 2009 California Police Chiefs Assn. 42 All Rights Reserved 65A-103 57 Van Derbeken, et al. 58 Kate Heneroty, "Medical marijuana indictment unsealed," Jurist, 24 June 2005, available at http:"Jurist.law. pitt.edu,'paperchase/2005.,06/medical-marijLiana- indictment-Unsealed. ph p; Stacy Finz, "19 Named in Medicinal Pot Indictment: More Than 9,300 Marijuana Plants Were Seized in Raids," San Francisco Chronicle, 24 June 2005, available at hap:i'sfeate.com/cgi-bin/article.c?4i?tile is/x;2005/06%24'BAGV9DEC4CI.DTL s9 Organized Crime Behind `Medical'Marijuana Dispensary in California," Pushingback. 29 September 2006, available at http:!/pushingback.com/blots/pusliing back/archivei2006/09/29/791 aspx; "Ashton. 61 City of San Diego, Crime Statistics, 2007, available at http://www. sand iego.gov 61 National Drug Intelligence Center, Maryuana, January 2001, available at http:/,/www.tisdoL,,ov 62 George Anastasia, "Viet Gangs on the Rise Again-The Emerging American Underworld-Gangs' Plant-filled Houses a Growing Part of Drug Trade," Chronicle of Boredom, 18 April 2007. 63 Will Bigham, "Houses Linked to Asian Gangs," Inland Valley Daily Bulletin, 23 September 2007, available at http:!iw,AAv.dailvbulletin.com/newsci 6980682 64 Bigham, 23 September 2007. 65 Feds Came and Went-Now What? Humboldt County News, 30 June 2008, available at http:"news.humcountv.conii'archivesi2008/6 66 LAPD Report Number DR#060625000, 16 August 2006. 67 LAPD Report Number DR#060625001, 16 August 2006. 68 Tim Miller, City of Anaheim Police Department: Special Operations Division Memorandum re Marijuana Dispensary (MMD) Ban Ordinance, 25 October 2006; Johnson; Craig T. Steckler, City of Fremont Police Department; Memorandum re Medical Marijuana Dispensaries - Potential Secondary Impacts, 20 June 2006. 69 Stewart. 70 Johnson. 71 Ashton. 72 "What has the U.S. DEA said about medical marijuana? " Medical Marijuana ProCon.org, 2005; "What has federal law enforcement said about medical marijuana?" 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San Francisco Chronicle, 23 June 2005. Retrieved January 9, 2009, from http://www.s,f?,,ate.com/chi-bin/article chi'?file=/c/a/2005/06/23/MNGRODDG321 DTL "What has federal law enforcement said about medical marijuana?" Medical Marijuana ProCon.org, 2009. Retrieved February 24, 2009, from http:iimedicalmariiuana.procon.org/viewanswers asp'?questionID=000630 "What has the U.S. DEA said about medical marijuana?" Medical Marijuana ProCon.org, 2005. © 2009 California Police Chiefs Assn. 49 All Rights Reserved 65A-110 EXHIBIT 4 Medical Marijuana Dispensaries: 2% Gross Receipts Cannabis Business License Tax / 1 % Sales Tax / $500 Dispensary Registration Fee Calculation of Estimated Revenue 65A-111 t 4+ ? fD O O1 m O d m m Dmo n m I-LI n c' O a 2- x m" •" A ? d m m 3ry 0 3 0 2 WO 0 cm am' 3 -' C O 6n-1 Q' S r O ID a n G1 L" N m p O OQ 3 m ?• _ I w '^ °7 m w 0 0 3 0 ,w.' .* m N 'W S '?, d O O ^ m ?, In m 7 O? M OJ O_ ?' d Q ID a m d S O v?+ m i ,? r d n Q. C G7 v? X O d 7 Q d M ID a m 3 n nOi a ID hr? 3 a m' ?a 7a rcD p a ID I d O ?; y 7 3 00 X 7 y m C 7 d DJ C D d d y W 7"< m m O Gl ID 0 in 0- O d N n d a N O vC+ UC 0 rt N 7 0 a 7 O O ID O 0 7 x W O_ M 7 N n O v C o m v c m rt * ( V W CD O V m m 7 N m 7 00 d rt vmi < y O N n Dl (D A W •'. a 7 'O A : 7 (OD ( m D N 6Sl . _ \ S O d o ( 7 rt` N CL II F-? DO O c a '1 7 Z F? 3 7 N Q V y- m m C V S C p a m Ol Q N ,? 9Nl O m 7 W ? a Q3 m CL m N ^+ ° m " o m d o m rt x S rt -p O y 7 D1 v+ N fD, d S N 7 OJ - (? j x m 0 O m d 7 D 3 0- 0 7 a m o n o ° °? n m 3 7 a) 3 0 3 m n a° 7 m_ - ro' a, 2L o D (D ?• v < d n y N FT S m m 3 m N z d ?• m N w an d x ?a "16ty m O' D71 DO x m c 0 rt n d T M O d CD _ 3 o n ro c 3 a 3 " n < a m -0, w m n CL 7 vi a 3 m OzDw d ID _ M 0 _ , 3 n :I o 2 !" : Do a 7 ? C 7 s t' M D 7 '^ w iF f M N • 0 m 3 O OV d O S. r m m ff c 7 O N O N O N IZ O rtD r a, r- 0 d v M M 3 d 0 3 a M a z C 3 a m O v N M M 3 w N N C a O d v m v rp lu vl? O v 9 M of° 00 d O T M M 'a M v M M d Q) C.7 O H 0 n O) D) a W N m r M M 4A x x of m + II x II + + 11 x A N V 01 W .. • {} ii• • r ? G r? lu d M O C 0 C d 3 d n 3 Q c m OJ ? 1 nr # N _ 3 N ? ? n == 3 1 Z ' `c 3 o, a 7 m _v O, v ? N JU w M - CA v o' N N N m N m f 65A-112