Feds Try to Handcuff Bay Area Dispensaries

Don't call Lynette Shaw paranoid. They're definitely out to get her.

Shaw operates Marin Alliance for Medical Marijuana, which has sold state-authorized marijuana out of a tiny Fairfax storefront since 1996 and is likely the state's oldest medical cannabis dispensary. Shaw also runs the only dispensary to survive federal prosecution: all of the other six defendants in 1998's U.S. v. Oakland Cannabis Buyers' Cooperative et al., including San Francisco pot icon Dennis Peron's Cannabis Healing Center, are gone.

That's one reason Shaw thinks that she now finds herself in the unique position of fending off two federal agencies attempting to do what Bill Clinton's Department of Justice could not. Already locked in a battle with the Internal Revenue Service, which told her in March she cannot claim the cost of marijuana on her federal tax return, Shaw was one of four Bay Area dispensaries to receive letters from U.S. Attorney Melinda Haag, whom Barack Obama appointed as the Bay Area's top federal prosecutor in 2010. The letters set a deadline of Nov. 21 for the dispensaries to shut down, or risk asset forfeiture proceedings against their landlords and up to 40 years in prison for the operators.

The letters are part of a significant backtracking from Obama's campaign-trail promise that state-law-abiding medical marijuana was not a federal law enforcement priority.

In a statement e-mailed to the press this week, Haag's office says it is “focusing its limited resources on significant drug traffickers. Individuals involved in the commercial cultivation and distribution of marijuana remain a core priority.” No other comment was offered. “I can't believe Obama did this to me, and my patients,” says Shaw, who says she suffers from “non-military PTSD” and uses marijuana in order to be able to function. “I don't want to be sick again, my patients don't want to be sick — it's just so mean and so wrong — it's a terrible lie, and I can't believe Obama is behind it,” she says, sobbing into the telephone during a recent interview.

The government's strategy appears to be working: Two of the three San Francisco dispensaries that received letters announced last week plans to shut down, and a proposed dispensary for the city's Marina District said it had put its application on hold. Though the government seizing a state-law-abiding landlord's property might be unpopular — “It would be a public relations nightmare,” says San Francisco attorney Kenneth Wine — the feds appear serious. A lawyer in Haag's office told Wine that the forfeiture proceedings are drafted, and that more letters to dispensaries are in the works.

Yet not everyone in the Bay Area is backing off. On Oct. 14, Oakland accepted 12 applications for four new dispensary permits.

Shaw hopes to use this opportunity to drag the nation's pot laws themselves into court. “In this country, you can't base a law on a lie,” says Shaw, referring to the Drug Enforcement Administration's classification of marijuana as a Schedule 1 drug. “That means it has no medical value, it's highly dangerous, cannot be prescribed safely, and is not recognized as medicine anywhere in the U.S.,” she says. “Those four things are all lies — we just need a federal judge to rule on it.”

Stephen DeAngelo, CEO of Oakland's Harborside Health Center, was told earlier this month that Harborside is $2.5 million in arrears to the IRS. He too plans to take the feds to court, to have a judge rule on the validity of the IRS' application of a section of tax code meant to punish cocaine traffickers. “I'm looking forward to my own kind of bully pulpit,” he told SF Weekly. “We're going to present our case to the American people, to the courts, and to Congress. This will be a huge, huge decision.”

It's a heartening stance, but until Congress changes marijuana's legal status, it's also a long shot, according to Wine. “The law is stacked in the federal government's favor,” he says. “Federal law on marijuana is totally unforgiving.”

Nobody seems to know why Obama's lawyers are targeting taxpayers rather than street dealers — to whom the state's marijuana users will turn for their pot if the storefronts close. “The federal government says they're protecting the children, and that may be true,” Wine says. “But in the meantime, they're denying a lot of sick people their medicine.”

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