Uncle Sam gets serious
In 2006, a year before medical-cannabis dispensary Sacramento Holistic Healing Center opened its doors at 2014 10th Street, the number of crimes reported within 1,000 feet of the business was 146. In 2010, the same city of Sacramento database shows that reported crimes—burglaries, robberies, assaults, drug busts, car thefts, etc.—within the same distance of the pot club had dropped to 32.
Sure, this dramatic reduction in crime might be a coincidence. Or it could be that SHHC—which changed its name to Grass in November 2010—came to the neighborhood with enough security personnel and surveillance cameras to not just deter crime, but also make an unprecedented dent in Southside Park criminal activity.
This was of no matter, however, to the federal government: Last Thursday, Sacramento-based U.S. attorney Benjamin Wagner’s office issued a forfeiture suit against Grass’ landlord. His reasoning is that the club is not just breaking federal law by trafficking illegal marijuana, but is also operating within 1,000 feet of a school.
The suit was the first such action in the region, and it sent a message not just to the Sacramento medical-cannabis community, but marijuana activists nationwide:
Uncle Sam is serious.
The federal government has threatened dispensary landlords before. In 2007, under the Bush administration, dozens of letters went out to Los Angeles club landlords—but there was no follow up.
So last October, when California’s four U.S. attorneys announced a ramped-up enforcement strategy against the state’s medical-marijuana industry, it was uncertain whether the feds’ threats would have teeth.
Nearly two-dozen letters from Wagner’s office were mailed to property owners who leased to marijuana dispensaries or cultivation grows in October. The feds warned in these letters that if landlords continued to lease property to illegal pot clubs, they would face criminal prosecution and forfeiture, or seizure, of their property.
Dozens of regional dispensaries not willing to press their luck have shuttered since. But the feds had yet to target any property owners until last week.
U.S. attorney spokeswoman Lauren Horwood confirmed with SN&R that Grass received both a landlord letter in October and subsequent follow-up from Wagner’s office. She could not comment on the ongoing investigation, but did say that, because of Grass’ proximity to a school, the case will qualify for special circumstances.
“It’s a worse crime,” she said, adding that there are different statutes for those “trafficking drugs close to a school,” and also possible sentencing enhancements.
SN&R contacted representatives from Grass, but they were not willing to discuss the case.
By all accounts, Grass was a good neighbor. The collective kept a low profile: There is no signage on the storefront’s exterior, security checked customers upon entering, and the main entrance was in a well-lit alley instead of out front on 10th Street. And, each April, the dispensary was known for holding a free party for neighbors, a family-friendly event that went down in their alleyway parking lot and included music, games and barbecue.
Courtney Sheats, who heads the Sacramento chapter of cannabis-advocacy group Americans for Safe Access, said that the suit against Grass—in addition to last week’s new federal action in Colorado, where 23 dispensaries received landlord letters from that state’s U.S. attorney—doesn’t necessitate a “next phase” in Uncle Sam’s crackdown.
“I don’t think it is a new wave,” Sheats said. “I think it is a continued wave of pressure that we’re feeling from the federal government. All of our patients are concerned. However, at the same time, they are aware and starting to be proactive.”
She added that ASA and local activist Joy Cole’s Sac Patients organization have coordinated protests each Wednesday outside the federal courthouse on I Street. More than 40 showed up on January 11, for the 7 p.m. demonstration.
“And I believe with the recent actions against Grass,” Sheats said, “we’re going to be seeing even more [protesters] next week.”
There could also be more bad news for the local marijuana community next week: According to spokeswoman Horwood, there will be a second round of landlord letters in U.S. attorney Wagner’s eastern district, which includes Sacramento, scheduled to be sent.
“There’s more letters that are going out,” she confirmed, adding that “presumably, there might be more suits going out” as well. She would not specify how many letters or suits, or if they would target aspects of the medical-cannabis industry outside dispensing and cultivation.
Within the past month, two other dispensaries—1 Love Wellness on El Camino Boulevard and Midtown Collective on P Street—have shuttered due to federal pressure against landlords.
Horwood would not confirm if U.S. marshals visited the dispensaries’ landlords to pressure them to close, but multiple sources have told SN&R that this was the case.
The city of Sacramento continues to freeze its permitting process for dispensaries and, according to spokeswoman Amy Williams, this will remain unchanged.
Meanwhile, in Los Angeles, a city council member has motioned to ban all pot clubs, even though the city approved an ordinance in 2010. The L.A. city attorney has also urged council members to enact a ban. Los Angeles, however, does not tax its dispensaries, unlike Sacramento, which implemented a 4-percent tax last summer.
ASA’s Sheats says she continues to reach out to the city to preserve patients access to marijuana.
“We are certainly asking our local city officials to stand up,” she said.