Medical Marijuana, the ATF, Firearms, California, etc.

As you all know, the federal government continues to struggle with state legalization of medical marijuana. In June, the U.S. Attorney’s Office issued a 2nd memorandum regarding medical marijuana and the potential prosecution of medical marijuana businesses. However, on the other side of the federal government, the I.R.S. is permitting medical marijuana businesses to file tax returns and receive various deductions in connection with the cultivation and sale of medical marijuana. We are not tax attorneys, so please discuss such issues directly with a qualified and knowledgeable accountant.

The ATF:

On 9/21/11, the Bureau of Alcohol, Tobacco and Firearms (ATF) got into the act. The ATF sent an open letter to all federal firearms dealers informing them that they could not sell a firearm to a person known to use medical marijuana. Federal law, 18 U.S.C. Sec. 922(g)(3) prohibits an unlawful user of or addicted to any controlled substance, including marijuana. The ATF states that this includes medical marijuana patients. According to the ATF, this law prohibits a firearms dealer from selling a firearm to any person whom the dealer has “reasonable cause to believe that such person is an unlawful user of or addicted to a controlled substance, i.e., medical marijuana.

Currently, the firearms dealer does not have access to the Colorado medical marijuana patient database, nor does the ATF. There are only two ways that a firearms dealer can learn of a person’s mmj patient status: (1) the patient tells the dealer for whatever reason about his mmj status; or (2) the person checks “yes” to Question 11(e) on ATF Form 4473, which is form used when purchasing a firearm. Question 11(e) asks if the purchaser is an unlawful user or is addicted to a controlled substance. Again, marijuana, medical or otherwise, is federally classified as a controlled substance.

A copy of the 9/21/11 Open Letter to All Federal Firearms Licensees can be viewed at: http://www.atf.gov/press/releases/2011/09/092611-atf-open-letter-to-all-ffls-marijuana-for-medicinal-purposes.pdf

California and federal prosecution:

As many of you know, the federal government continues to threaten MMJ businesses through the US Attorney’s Office. It appears that, for now, the focus is California. You can read more about this at: http://latimesblogs.latimes.com/lanow/2011/10/feds-cracking-down-on-california-medical-marijuana-dispensaries.html.

This also has been the case historically. One of the reasons that California is targeted is the lack of substantive regulation by the state. Also, many people in law enforcement believe that California dispensaries are selling marijuana obtained illegally from growers in Humboldt, Mendocino, Mexico, etc.

With regard to Colorado, I recently met with Medical Marijuana Enforcement Division director, Mr. Dan Hartman, who advises that he is routinely in contact with the DEA here in Colorado. Accordingly, to Mr. Hartman there has been no movement toward targeting MMBs here. Of course, that could change at any time.

In any event, it is never good news that federal law enforcement is targeting MMBs in California or anywhere else. If you are concerned about the potential for federal prosecution, this is not a business you should continue to be associated with. Currently, there is no protection from federal criminal prosecution under current law. While Colorado is tightly regulated, that does not currently provide any defense to federal criminal prosecution. It could be argued that the fact that the Colorado MMBs are owned by residents, grow all their own medicine under state supervision and sell only to Colorado patients may afford an exception to Gonzales v. Raich, 545 U.S. 1 (2005), 352 F.3d 1222, which is the California case decided by the U.S. Supreme Court which confirmed the power of the federal government to prosecute medical marijuana actors based upon the Commerce Clause. See,http://www.law.cornell.edu/supct/html/03-1454.ZS.html. However, this potential exception to Gonzales v. Raich has never been attempted and would have to be litigated in the context of the criminal prosecution of a Colorado medical marijuana patient, caregiver or business. A frightening thought indeed. While I am prepared to assert such arguments and am admitted in the federal court, I hope it never comes to that.

Finally, as those of you who have met with or spoken with me, I have always maintained and advised that federal prosecution is a real and substantial risk for anyone involved in the medical marijuana business. Simply put, no one should take any risk for which they are not prepared to accept the ultimate, potential risk, in this case – federal criminal prosecution. If such federal criminal prosecution is successful, it could mean a lengthy prison sentence, civil forfeiture of property or both.

Federal MMJ policy memo

Good news. The Obama Adminstration has issued a memo stating that federal enforcement of MMJ is not a priority. This memo reiterates the policy statement issued last spring, which created a watershed of new MMJ patients, caregivers and dispensaries in Colorado. However, we should all be wary. Mr. Holder states that the feds will not become involved as long as caregivers and dispensaries are “in compliance with state law.” Accordingly, it is more critical than ever that all caregivers and dispensaries strictly comply with the MMJ Amendment. That means you must be the primary caregiver for any patients receiving MMJ from you. That includes any growers, dispensaries and caregivers. Be careful – we still have a long way to go.