Montana medical marijuana raid raises huge questions with national implications

Montana medical marijuana raid raises huge questions with national implications

When federal agents led a raid on medical marijuana businesses in Montana last week, questions were raised as to whether these businesses were raided because they were suspected of selling out of the proverbial back door to people without medical marijuana permits–or whether they were raided simply for being medical marijuana businesses.

While answers are not readily forthcoming, facts suggest it was a little of both.

When asked that question point blank, a spokesperson for the U.S. Attorney’s office said she could provide no information that was not in the official press release, which is below.

The Colorado Independent, though, has copies of one of the search warrants and also one of the applications for a search warrant, which is signed by the DEA agent applying for the warrant, and Magistrate Judge Jeremiah C. Lynch.

While this is only one of 26 search warrants issued, it is significant for a couple of reasons.

It alleges both back door dealings and normal business operations as among the reasons for the raid.

Among the crimes alleged are that a DEA agent purchased marijuana and a “sniper rifle” from the owner of a medical marijuana business. The purchase was made at the seller’s home where the seller also had possession of a handgun for his personal protection during the transaction. No mention is made of whether the undercover DEA agent presented a medical marijuana license when making the purchase.

The application, though, also cites as reasons for the search numerous activities that are either legal under Montana’s medical marijuana law–such as growing marijuana–or ambiguous under that law.

Specifically the application alleges that the business conducted trade with other medical marijuana businesses–that businesses buy marijuana product from each other, and sell marijuana product to each other.

People involved in the medical marijuana community in Montana say it is that contention that is most troubling in these raids.

John Masterson, founder and director of Montana NORML (National Organization for the Reform of Marijuana Laws) says there is currently a legal action making its way through the process which will clarify whether caregivers and dispensaries can buy and sell with each other.

“It appears it is this caregiver to caregiver trade that is seen as “wholesale trafficking” by the U.S. Attorney’s office, and that is very troubling for a number of reasons.”

Jim Gingery, director of the Montana Medical Growers Association, agrees.

He said his organization and others have been discussing the question of caregiver to caregiver business with legislators and law enforcement agencies for years without coming to any agreement, other than to agree that under Montana law, it is a gray area.

“The attorney general tells us it is a legislative matter, and the legislature is currently considering three different bills that address this issue.”

In the meantime, he said his group filed a declaratory action in court, asking a judge to rule on the legality of caregiver to caregiver sales, and that they expect a ruling soon.

“If caregiver to caregiver sales is the reason for the raids, then the raids are in conflict with Montana law, where this is an unresolved issue at this time.”

Denver attorney Rob Corry, who does a lot of work with medical marijuana clients, said that if business to business sales was the underlying justification for the raids then the same logic could be used to justify raids in Colorado.

“Under that rationale, they could raid every medical marijuana business in Colorado. They could put them all under. It happens a thousand times a day in Colorado. It happens in every kind of business. No business can stay in business without buying from other businesses,” he said.

“There is a plan in place to stop these dispensaries,” said Boulder attorney Dennis Blewitt. “There is a lot of money at stake. Police departments do not want to lose all the money they get for marijuana enforcement and marijuana-related incarceration.”

“I have no doubt that in Montana, where they do not have (U.S. Rep. Jared) Polis barking in the ear of the DEA, and where they think the public no longer supports medical marijuana, that they think they (the DEA) have the support of the community, and so they think they can do this,” he said.

“And, if they can do it in Montana, they can do it here,” he added.

Katie Cannata, communications director for the ACLU in Montana, said the ACLU is monitoring the situation but is not directly involved.

“We don’t know what is going on. It is not entirely clear (whether the raided businesses are suspected of anything more than being dispensaries),” she said last week.

“We are concerned that there will be patients who will not be able to get their medication, and we find that distressing,” she said.

From Reuters:

A medical marijuana law in the state of Montana is being used for large-scale drug trafficking, federal prosecutors said, days after the U.S. government raided facilities across the state.

The raids… capped an 18-month investigation of marijuana trafficking statewide, the U.S. Attorney for Montana, Michael Cotter, said in a statement.

Seizures also were carried out at financial institutions in three Montana cities under civil warrants seeking up to $4 million in connection with the alleged drug trade, he said.

The sweep prompted an outcry from medical marijuana advocates, who accused the government of cracking down on growers and distributors who were operating legally under the state’s seven-year-old medical marijuana law.

But Cotter said in his statement that the raids were conducted “where there is probable cause that the premises were involved in illegal and large-scale trafficking of marijuana.”

“When criminal networks violate federal laws, those involved will be prosecuted,” he said.

In a press release, Cotter said he was not targeting patients:

“Individuals with illnesses who are in clear and unambiguous compliance with state law are not the focus of this investigation.”

He also includes a statement that makes it seem those operations that were raided may not be suspected of anything other than what they admit they are doing: cultivating and selling medical marijuana, which according to Cotter’s statement, “has no… medical use”:

Congress placed marijuana in Schedule I of the CSA. Under federal law, growing, distributing and possessing marijuana (other than in a federally authorized research program) is a violation of the CSA. A substance listed under Schedule I has: (a) a high potential for abuse, (b) no currently accepted medical use in treatment in the United States, and (c) a lack of accepted safety for use of the drug or other substance under medical supervision. Because of the danger posed by Schedule I substances, the Department of Justice continues to focus its enforcement and investigative efforts in targeting large-scale drug organizations that cultivate, manufacture, distribute, or sell marijuana.

Assistant U.S. Attorney Victoria Francis, when asked if the raided businesses were thought to be involved in anything more than legitimate medical marijuana sales, said, “We can’t say things like that. All we can say is what is in the press release.”

Noting that 26 search warrants were issued, Aaron Smith, executive director of the National Cannabis Industry Association, said, “To put it lightly, I’m skeptical. My position is the same as President Obama’s which is that if a business is working in compliance with state law, then the feds should leave them alone.”

Complete text from U.S. Attorney Michael Cotter’s press release:

The United States Attorney for the District of Montana, Michael W. Cotter, announced today the culmination of a 18-month multi-agency investigation into the drug trafficking activities of criminal enterprises operating throughout the State of Montana. In furtherance of that investigation, a total of 26 criminal search warrants were executed on March 14, 2011, at premises in the following communities: Belgrade, Big Sky, Billings, Bozeman, Columbia Falls, Dillon, Great Falls, Helena, Kalispell, Miles City, Missoula, Olney and Whitefish. Items seized by law enforcement may be disclosed after search warrant returns are filed with the United States District Court.

In addition, Civil Seizure Warrants for financial institutions in Bozeman, Helena, and Kalispell seeking up to $4,000,000 were executed.

Search warrants and civil seizure warrants were issued based on judicial findings that probable cause exists to believe that the premises located in thirteen Montana towns are involved in criminal enterprises that have violated the Controlled Substances Act (CSA) related to marijuana, a Schedule I controlled substance. Specifically, it is alleged in the search warrants, civil seizure warrants and related documents that the premises or property identified were involved in some or all of the following violations of federal law: manufacture of marijuana and possession with intent to distribute marijuana, and distribution of marijuana in violation of 21 U.S.C. § 841, conspiracy to commit the offenses of manufacture of marijuana, possession with intent to distribute marijuana and distribution of marijuana in violation of 21 U.S.C. § 846, structuring or assisting in structuring any transaction to evade currency reporting requirements or causing or attempting to cause a domestic financial institution to fail to file Currency Transaction Reports in violation of 31 U.S.C. §§ 5324(a)(1) and (3).

Congress placed marijuana in Schedule I of the CSA. Under federal law, growing, distributing and possessing marijuana (other than in a federally authorized research program) is a violation of the CSA. A substance listed under Schedule I has: (a) a high potential for abuse, (b) no currently accepted medical use in treatment in the United States, and (c) a lack of accepted safety for use of the drug or other substance under medical supervision. Because of the danger posed by Schedule I substances, the Department of Justice continues to focus its enforcement and investigative efforts in targeting large-scale drug organizations that cultivate, manufacture, distribute, or sell marijuana.

United States Attorney Cotter said that “Twenty-six search warrants were carried out yesterday where there is probable cause that the premises were involved in illegal and large-scale trafficking of marijuana. When criminal networks violate federal laws those involved will be prosecuted.”

Individuals with illnesses who are in clear and unambiguous compliance with state law are not the focus of this investigation.

The following federal, state and local law enforcement agencies participated in the execution of the search warrants and the seizure of the civil assets at multiple locations across the state of Montana: the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Internal Revenue Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the Environmental Protection Agency-Criminal Investigation Division, U.S. Customs and Border Protection-Border Patrol, and the Occupational Safety and Health Administration. These federal agencies were assisted by the Montana Division of Criminal Investigations, and local High Intensity Drug Trafficking Area task forces, the Northwest Drug Task Force, the Kalispell Police Department, the Flathead County Sheriff’s Office, the Missoula Police Department, the Missoula County Sheriff’s Office, the Missoula High Intensity Drug Trafficking Area (HIDTA) Task Force, the Great Falls Police Department, the Cascade County Sheriff’s Office, the Central Montana Drug Task Force, the Billings Police Department, the Yellowstone County Sheriff’s Office, the Eastern Montana High Intensity Drug Trafficking Area (HIDTA) Task Force, the Dillon Police Department, the Beaverhead County Sheriff’s Office, the Park County Sheriff’s Office, the Bozeman Police Department, the Gallatin County Sheriff’s Office, the Missouri River Drug Task Force, the Helena Police Department, the Lewis & Clark Sheriff’s Office, and the Eastern Montana Drug Task Force – Miles City.

The information contained in the search warrants, civil seizure warrants and related documents are based on the information discovered during the course of ongoing investigations. To date, no federal criminal charges, indictments, informations or complaints have been filed against any of the named individuals identified in the search warrants, civil seizure warrants and related documents. All named individuals and locations identified in the search warrants, civil seizure warrants and related documents are presumed innocent until proven guilty.

In speaking with the Montana press since the raids, Cotter has indicated that Obama’s informal policy of leaving legitimate medical marijuana businesses alone is still the rule of the land.

From the Missoulian:

Recent raids by federal and local authorities on medical pot businesses in Montana does not mean the Obama administration has abandoned its policy of leaving legitimate medical marijuana patients and providers alone, the U.S. Attorney for Montana says.

“The policies of the Department of Justice have not changed,” Mike Cotter told a gathering of 60 lawyers at a meeting of the State Bar of Montana last week.

“When the attorney general visited here in February, he stated illegal sale of marijuana under the guise of medical marijuana will be prosecuted,” Cotter said. “That is the policy.”

Attorneys at the meeting questioned Cotter on whether they could lose their legal licenses if they offered advice to people growing marijuana.

“I would give them a copy of the Ogden memo and say ‘I am advising you that no state can authorize violation of federal law, ‘” Betsy Brandborg, counsel for the State Bar of Montana, told them.

The Ogden memo, written by assistant attorney general David Ogden, is here.

People on the street, though, are not convinced it is business as usual in the world of state-sanctioned medical marijuana.

“Has Obama changed his mind, or is there something else going on here?” asks Gingery.

If medical marijuana suppliers can no longer do business with each other, Gingery says, they will be out of business.

“Even if each dispensary has to grow all of their own stock, they will be out of business. They have to get their seeds somewhere. How can they do that, if not from another legal source?” he asks.

“What happens in Montana will change the face of medical marijuana nationally,” he said.

Corry too questions what Obama and Holder are thinking, and wonders what the U.S. policy really is on medical marijuana.

“The feds just can’t make their minds up,” he said. “Attorney General Holder can’t make up his mind. He says there will be no federal money spent on enforcement, and yet here they go,” he said.

Some, echoing Blewitt, think it is all about the money. The feds have long made a business of seizing the assets of drug traffickers and using those assets in the war on drugs, and some say that is exactly what is happening here.

It may be about the money, but in Montana it is also about the law and the Legislature there this week began considering a sweeping overhaul of the existing voter-approved law. Having failed in efforts to throw the law out altogether, legislators this week began debating changes to the law that would probably cut back on both the number of dispensaries and the number of patients.

In any event, recent actions and announcements by the IRS and the U.S. Attorney General’s office and U.S. Attorneys office make it clear that the medical marijuana business is not for the faint of heart.

Following are three video clips explaining the Obama position on medical marijuana. In the first, candidate Obama explains he won’t put a lot of resources toward medical marijuana. In the second, President Obama reiterates that position, and in the third Attorney General Eric Holder says those are his orders as well.

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About the Author

Scot Kersgaard

Scot Kersgaard has been managing editor of a political newspaper, editor and co-owner of a ski town newspaper, executive editor of eight high-tech magazines (where he worked with current Apple CEO Tim Cook), deputy press secretary to a U.S. Senator, and an outdoors columnist at the Rocky Mountain News. He has an English degree from the University of Washington. He was awarded a fellowship to study internet journalism at the University of Maryland's Knight Center for Specialized Journalism. He was student body president in college. He spends his free time hiking and skiing.

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