FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

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FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Chivis
Administrator
This is really all theater the bill to legalize MJ is expected to win at the next election...16 states & DC have Medical MJ at this time
for a video report from PBS re: Benefits & Effectiveness of Medical MJ.....Paz, Buela
http://www.pbs.org/newshour/bb/health/july-dec11/marijuana_08-23.html 


Federal prosecutors are cracking down on some pot dispensaries in California, warning the stores that they must shut down in 45 days or face criminal charges and confiscation of their property even if they are operating legally under the state's 15-year-old medical marijuana law.

In an escalation of the ongoing conflict between the U.S. government and the nation's burgeoning medical marijuana industry, at least 16 pot shops or their landlords received letters this week stating they are violating federal drug laws, even though medical marijuana is legal in California. The state's four U.S. attorneys were scheduled Friday to announce a broader coordinated crackdown.

Their offices refused Thursday to confirm the closure orders. The Associated Press obtained copies of the letters that a prosecutor sent to at least 12 San Diego dispensaries. They state that federal law "takes precedence over state law and applies regardless of the particular uses for which a dispensary is selling and distributing marijuana."

"Under United States law, a dispensary's operations involving sales and distribution of marijuana are illegal and subject to criminal prosecution and civil enforcement actions," according to the letters signed by U.S. Attorney Laura Duffy in San Diego. "Real and personal property involved in such operations are subject to seizure by and forfeiture to the United States ... regardless of the purported purpose of the dispensary."

The move comes a little more than two months after the Obama administration toughened its stand on medical marijuana. For two years before that, federal officials had indicated they would not move aggressively against dispensaries in compliance with laws in the 16 states where pot is legal for people with doctors' recommendations.

The Department of Justice issued a policy memo to federal prosecutors in late June stating that marijuana dispensaries and licensed growers in states with medical marijuana laws could face prosecution for violating federal drug and money-laundering laws. The effort to shutter California dispensaries appeared to be the most far-reaching effort so far to put that guidance into action.

"This really shouldn't come as a surprise to anyone. The administration is simply making good on multiple threats issued since President Obama took office," said Kevin Sabet, a former adviser to the president's drug czar and a fellow at the University of Pennsylvania's Center for Substance Abuse Solutions. "The challenge is to balance the scarcity of law enforcement resources and the sanctity of this country's medication approval process. It seems like the administration is simply making good on multiple statements made previously to appropriately strike that balance

Greg Anton, a lawyer who represents dispensary Marin Alliance for Medical Marijuana, said its landlord received an "extremely threatening" letter Wednesday invoking a federal law that imposes additional penalties for selling drugs within 1,000 feet of schools, parks and playgrounds.

The landlord was ordered to evict the 14-year-old pot club or risk imprisonment, plus forfeiture of the property and all the rent he has collected while the dispensary has been in business, Anton said.

Marin Alliance's founder "has been paying state and federal taxes for 14 years, and they have cashed all the checks," he said. "All I hear from Obama is whining about his budget, but he has money to do this which will actually reduce revenues."

Kris Hermes, a spokesman for the medical marijuana advocacy group Americans for Safe Access, said the warnings are part of what appears to be an attempt by the Obama administration to curb medical marijuana on multiple fronts and through multiple agencies. A series of dispensary raids in Montana, for example, involved agents from not only the FBI and U.S. Drug Enforcement Agency, but the Internal Revenue Service and Environmental Protection Agency.

Going after property owners is not a new tactic though, Hermes said. Five years ago, the Department of Justice under President George W. Bush made similar threats to about 300 Los Angeles-area landlords who were renting space to medical marijuana outlets, some of whom were eventually evicted or closed their doors voluntarily, he said.

"It did have an impact. However, the federal government never acted on its threats, never prosecuted anybody, never even went to court to begin prosecutions," Hermes said. "By and large, they were empty threats, but they relied on them and the cost of postage to shut down as many facilities as they could without having to engage in criminal enforcement activity."

Besides the dozen dispensaries in San Diego and the one in Marin County, at least three shops in San Francisco already have received closure notices, said Dale Gieringer, director of the California chapter of the National Organization for the Reform of Marijuana Laws.

The San Diego medical marijuana outlets put on notice were the same 12 that city officials sued last  month for operating illegally, after activists there threatened to force an election on a zoning plan adopted to regulate the city's fast-growing medical marijuana industry, City Attorney Jan Goldsmith said. A judge on Wednesday ordered nine of the targeted shops to close, while the other three shut down voluntarily, Goldsmith said.

Duffy, the U.S. attorney for far Southern California, planned to issue warning letters to property owners and all of the 180 or so dispensaries that have proliferated in San Diego in the absence of compromise regulations, according to Goldsmith.

"The real power is with the federal government," he said. "They have the asset forfeiture, and that means either the federal government will own a lot of property or these landlords will evict a lot of dispensaries."

IRS ruling strikes fear in medical marijuana industry

In a potentially crushing blow to the burgeoning medical marijuana industry, the IRS has ruled that dispensaries cannot deduct standard business expenses such as payroll, security or rent.

Harborside Health Center, one of the nation's largest medical marijuana dispensaries and considered a model for the industry, is on the hook for $2.5 million in taxes from 2007 and 2008.  That is $2 million more than the Oakland, Calif.-based company paid for those tax years.

“I see only two outcomes here,” said Steve DeAngelo, director and chief executive of Harborside. “Either this IRS assessment has to change or we go out of business. There really isn’t a middle ground for us.”

DeAngelo says the ruling will likely be appealed. He has 90 days to respond to the ruling.

The IRS ruling is based on an obscure portion of the tax code -- section 280E -- passed into law by Congress in 1982, at the height of Reagan administration’s “war on drugs.” The law, originally targeted at drug kingpins and cartels, bans any tax deductions related to "trafficking in controlled substances."

Although 16 states and the District of Columbia have passed laws allowing medical use of marijuana, the federal government still considers it a Schedule I drug, the most restrictive category with the harshest penalties.

The Internal Revenue Service refused to comment on the specific case, but letters sent from Andrew Keyso, IRS deputy associate chief counsel, to some members of Congress spell out the official position:
 

“Section 280E of the Code disallows deductions incurred in the trade or business of trafficking in controlled substances that federal law or the law of any state in which the taxpayer conducts the business prohibits. For this purpose, the term “controlled substances” has the meaning provided in the Controlled Substances Act. Marijuana falls within the Controlled Substances Act.”
 
The news has spread rapidly through the cannabis community and is likely to have a chilling effect on businesses.

“We are all a bit nervous and frustrated,” said Ken Estes, owner of Patient To Patient Group Collective in San Jose, Calif. “We have tried to comply with every city, state and federal law. We ask for input from all the agencies. But we are still being punished for operating a legitimate business.”

Harborside, which celebrated its fifth anniversary Monday, serves 94,000 patients with 84 full-time employees and brings in about $22 million in annual revenue. According to DeAngelo, the center, set up as a not-for-profit business, pays about $1.1 million in taxes to the city of Oakland, $2 million to the state of California and $500,000 to the federal government.
 




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“We have no complaint about the taxes we pay," DeAngelo said. "We are doing our part. All we ask is that we be treated like any other business enterprise. To treat us like criminals is simply wrong. Drug kingpins and cartels don’t file taxes. We do. But no business, including ours, can survive if it is taxed on its gross revenue. The IRS is trying to tax us out of existence.”

Keith Stroup, legal counsel and founder of NORML, the nation’s largest marijuana advocacy group, says the IRS ruling is likely to  stifle the quasi-legal industry and force people back onto the black market.

“You know, Al Capone was taken down by the IRS, not by the FBI or the police. And I can assure you that Steve DeAngelo is no Al Capone,” Stroup said.

Stroup believes the move also could make it more difficult for the medical marijuana industry to capture significant capital investment. Medical marijuana is now a $1.7 billion market, according to a report released this year by See Change Strategy, an independent financial analysis firm that specializes in new and unique markets. The figure represents estimated sales of marijuana through dispensaries in states with medical marijuana laws.

Although the IRS declined comment, Stoup says NORML has received e-mails from other dispensaries that are currently being audited and will likely receive similar rulings. “Harborside is one of the biggest, so that is why the IRS targeted them first,” Stroup said. “But there are other dispensaries that will suffer the same fate unless Congress acts.”

Some members of Congress have taken up the cause.

Reps. Pete Stark, D-Calif., Barney Frank, D-Mass., and Jared Polis, D-Colo., have introduced legislation to ensure the medical marijuana industry is treated like any other business.

Two Republican presidential candidates — Ron Paul and Gary Johnson — also support the legislation.

Stark’s bill, the Small Business Tax Equity Act, authorizes medical marijuana dispensaries to take the full range of business expense deductions.

“You’d think that a time of record budget deficits that the IRS would be happy that a legal business is doing the right thing and paying its taxes," Polis said. "Instead, the IRS seems intent on destroying a successful and legal business that creates jobs and strengthens our economy."

The confused legal situation is “an un-American  loop of nonsense,” says Jerome Handley, a tax attorney in Oakland who has more than 100 clients in the medical marijuana industry. “My advice to my clients is simple: Document everything … and stay out of the spotlight.”

William Panzer, an Oakland  tax attorney who helped author California’s medical marijuana law, Proposition 215, also successfully fought the IRS in a similar case in 200
 
In that case, U.S. Tax Court Judge David Laro declared that Californians Helping to Alleviate Medical Problems (CHAMP), a medical marijuana provider, could deduct the majority of employee costs as caregiving expenses. The IRS sought $426,000 in back taxes and penalties, but CHAMP ended up paying a tax assessment of less than $5,000.

“This law is not about protecting citizens from criminals. It is a concerted effort by the federal government to crack down on a legitimate business,” Panzer said.

DeAngelo points out the apparent craziness of the law. “The IRS allows me to deduct my cost of purchasing cannabis, which is the controlled substance they say is illegal. But I can’t deduct my payroll or my rent? That, clearly, defies logic and common sense.

"Besides," DeAngelo added, "have you ever heard of a drug trafficker that actually files a tax return? Me neither."
 
The way I see it.... the more people that don't like me, the less people I have to please
J
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

J
Laurie Duffy, (US Attorney) is not playing around.  Buela, I'd guess you would like her, she rappelled down from a helicopter and sat face to face with with Javier Arellano when he was arrested on his boat in 2006.  I am intimately familiar with dispensaries, medical marijuana, the whole thing, and honestly, it is a scam, at least 80%, it's a direct for profit operation, and has nothing to do with 'medical' marijuana.  That said, I don't care, and it's non issue for me.  As far as drug/cartels goes, this means almost nothing, things will go on without change, as DTO's don't traffic in high grade marijuana, (at least in the US, or in very minute quantities) US and Canadian based marijuana traffickers will continue business as usual, and mid and low level dealers will be back in business after being marginalized by the dispensaries.  All this 'putting the profit back in cartels pockets' is nonsense, and doesn't reflect reality.
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

JesusTheMoose
In reply to this post by Chivis
Thanks for the post Buela. I won't miss the pot dispensaries but I do know of people that benefit from medical marijuana. What I have a problem with is the drug culture. It usually starts with marijuana and it escalates. I sat in a class today and almost the entire class began chatting about chronic, weed, and LSD. One of the fellows chatting away was a fellow army veteran and that disgusts me. I worry for the youth and I wonder why is my son who doesn't even have a curiosity of alcohol so different from the rest in his generation. Our society is a horrible failure in large.
The only object of liberty is life. -- G. K. Chesterton

Beer is proof that God loves us and wants us to be happy. -- Benjamin Franklin
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Chivis
Administrator
In reply to this post by J
Yep, among the biggest long held legal scams ever.  A joke.
Should have been sopped long ago.  Though I question the legality in doing so, and feel it is a waste of time and effort to shut them down and face the long tiring legal war ahead.  Especially in the economy of today when much greater issues abound.  

It is a double scam....jaja both sides.
 the gov; ill-timed PR
Medical M": plain stupid

States are to have autonomy and that to me is the all important factor here.  

It will do nothing but take the product out of the hands of those benefitting medically, the others will get it on the street.

as for making a dent in its use, not going to happen, it has been the drug increasing its use the most along with RX drugs.

It will become legal, something I support for a gazillion reasons but here are a few:

regulation
no one ever died from using the drug50-60% of all drug use is MJ in the US,  this will cut into drug profit
will free or courts and jails from processing these "crimes"

 
The way I see it.... the more people that don't like me, the less people I have to please
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Chivis
Administrator
In reply to this post by JesusTheMoose
Hola Jesus...

I have written about the fact that I have survived the 60s with out using any drug other than alcohol.
or the 70s-80s-90s....etc..

I also have written that my beloved brother (RIP) was a heroin addict since around 16-17 yrs old.
finding him OD with a needle stuck in his thigh or holding the trash bucket from him to puke in as he kicked cold turkey was enough for me to say  NEVER.  He began with MJ so in my teen aged mind I thought dang if I use MJ I will become this.

However the facts do not bear that thinking out. hte overwhelming users of mota NEVER become heavy drug users or escalate to strong drugs.  It is a genectic predisposition that will compel a small percentage of user forward.....

READ...

We've shown that the marijuana gateway effect is not the best explanation for the link between marijuana use and the use of harder drugs.

An alternative, simpler and more compelling explanation accounts for the pattern of drug use you see in this country, without resort to any gateway effects. While the gateway theory has enjoyed popular acceptance, scientists have always had their doubts. Our study shows that these doubts are justified.[...]

The people who are predisposed to use drugs and have the opportunity to use drugs are more likely than others to use both marijuana and harder drugs. Marijuana typically comes first because it is more available."


-- Andrew Morral, PhD
 Researcher, Rand Corporation
 Press release discussing his study published in the U.K. journal Addiction
 
The way I see it.... the more people that don't like me, the less people I have to please
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

JesusTheMoose
In reply to this post by Chivis
Hi Buela,

I trust the Rand Corporation but I have my reservations. Why? Because of the obvious drug culture. Addiction to marijuana is scarce but the recreational use of drugs like, MJ, E, LSD, cocaine, crack, meth remain dangerous. Marijuana, in my belief, opens the door to that culture. Heroine is just plain bad and I've met a youngster who was addidcted at 15. What impressed me about him was his flat affect and later I was told that heroine triggers the brain to stop dopamine production. Everyone that I've met thats a drug user smokes pot and it is seldom the only drug thats consumed.
The only object of liberty is life. -- G. K. Chesterton

Beer is proof that God loves us and wants us to be happy. -- Benjamin Franklin
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Chivis
Administrator
You are correct MJ can be a gateway, but those are primarily persons with a predisposition to drugs or addictions or mental issues.  for them it is not that it is a gateway in the true sense, that it led them to other drugs but rather with or without MJ they would have tired whatever is out there.

There are many that soley use MJ.  Including old timers like some of my friends, lefties left over from the 60s.

I oppose legalization of any other drug, though strongly favor decriminalization of all drugs for personal use in small amts.  Mexico passed that law, though few know about it including police agencies.  They decriminalized ALL drugs.  That what I favor but also to legalize MJ.  it would be regulated much as alcohol, licensed, taxed etc.  It makes sense.  and the main point is it will not kill anyone.

They say 60% of drugs used in the US is MJ.  lets kick the cartels in the ass a bit...where it hurts in the pocket.  It is not the answer or a cure to the "war" but a step in the right direction.  This will happen soon and once one state legalizes so will follow many.  there are 16+DC Meical MJ presently, with 6 pending.  

I have posted this video of Jorge Castaneda a few times including when it first cam out in March 2011, but if you have not seen it perhaps you may find it interesting.  But know that I do not support legalization lightly and have researched it deeply.  But I understand where you are coming from

http://www.youtube.com/watch_popup?v=kBscicluwu4&vq=medium#t=22 
 
The way I see it.... the more people that don't like me, the less people I have to please
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

JesusTheMoose
In reply to this post by Chivis
You know Buela, I wonder what some in the Applied Anthopology field could tell about changing the culture to shun drugs.
The only object of liberty is life. -- G. K. Chesterton

Beer is proof that God loves us and wants us to be happy. -- Benjamin Franklin
Tex
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Tex
In reply to this post by Chivis
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Chivis
Administrator
I think it is a sham...its a little of both.  either make it legal and regulte content, sales (age etc like alochol) tax it etc or don't but the dispensaries is trying to have it both ways.

read up on prohibition and you will see the gulf cartel began at that time but instead of drugs it was alcohol.  look what happen when it was legalized....

I would like to hear more argument not just feelings.
say why
back it up

that what this issue needs  not the pot heads saying "oh yea!"

not the "No!  No matter what reasoning" cries

good solid argument.  that teaches and provides information.  

lets be clear I am in favor of no medical MJ shops.  
 
The way I see it.... the more people that don't like me, the less people I have to please
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

katattx
In reply to this post by JesusTheMoose
Jesus, marijuana does not constitute a "gateway drug". Many many people use it and do not progress to harder drugs. Think about what MJ does to a person's mood: relaxed, calm, sleepy, hungry. Think about what cocaine and meth do:hyper, sleepless, anxious, no appetite. People have different brain chemistry, leading them to prefer uppers or downers, but almost never both. If a person starts out using MJ and likes it, they are probably not going to like drugs that have the opposite effects of MJ. As for heroin, I have no familiarity with that drug, other than what I have read...and its scary on a whole other level! If there is one gateway drug, it would be alcohol. I think anyone who has been a drinker can say they have taken foolish risks while under the influence. Alcohol IS notorious for that, in all age brackets.
J
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

J
The reason it's a gateway drug is because it's a start into the whole drug world, this sounds like a slippery slope argument, but you smoke weed, you meet people that smoke weed, you buy weed, meet people that sell weed, meet people that do coke, meet people that deal coke, and that's how it is, or how it was, because of the dispensaries and the legality of marijuana, the generation after this maybe will never know weed as an illicit drug, and that's a good thing.  You will find very few people that have done coke, or whatever, but have never smoked weed.  I'm sure everyone has some anecdotal evidence, but I doubt the statistics back it up.   But, they should sell it in shops, fine, but regulate it, tax it, like alcohol, and move on.  The current set up is ridiculous though, I have nothing or very little against it, but it is being disguised as 'medical', when it's recreational, I'm ok with that, but just be up front about it.  
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

ArmChairIntellect
J that's an over simplification of the problem.  I would think most start with alcohol or cigarettes.  But weed isn't a catalysts to harder drugs, kids experiment with all types of things, pot is fairly easy for most to obtain so it would make since this would be one of the drugs first tried.  Its just silly to say that using one drug leads to another, then to another, as if it was the drug that was making you want to explore further.  There is much more of a correlation between what drugs are available than there is to one specific drug causing you to try others.  Human curiosity leads people to try drugs, then try harder and harder drugs, its not the other way around.  If marijuana never existed they would claim another drug as the gateway drug.  What you just said is what the anti-drug messages has been for years and it is just plain false, backed-up with no real evidence to support it.    
Kab
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Kab
LOL@all the idiots that think Cannabis is a gateway drug.

You know what's addicting? over the counter medication, tobacco, prescription meds, and alcohol.

AND hard drugs, I know, I skip them over on purpose.
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Chivis
Administrator
In reply to this post by ArmChairIntellect
I was hoping your professional experience would contribute to the discussion.
You articulated my dos centavos far better than I could myself...
 Thanks~AMI~ :-)/\:-) high five
 
 
 

From: ArmChairIntellect [via Borderland Beat] <[hidden email]>
To: Buela Chivis <[hidden email]>
Sent: Saturday, October 8, 2011 6:06 PM
Subject: Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

J that's an over simplification of the problem.  I would think most start with alcohol or cigarettes.  But weed isn't a catalysts to harder drugs, kids experiment with all types of things, pot is fairly easy for most to obtain so it would make since this would be one of the drugs first tried.  Its just silly to say that using one drug leads to another, then to another, as if it was the drug that was making you want to explore further.  There is much more of a correlation between what drugs are available than there is to one specific drug causing you to try others.  Human curiosity leads people to try harder and harder drugs, its not the other way around.  If marijuana never existed they would claim another drug as the gateway drug.  What you just said is what the anti-drug messages has been for years and it is just plain false, backed-up with no real evidence to support it.    

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The way I see it.... the more people that don't like me, the less people I have to please
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

JesusTheMoose
In reply to this post by Chivis
Maybe I see the problem a cultural because my education is concentrated in social sciences. I don't see MJ as the problem per se and I don't excuse alcohol. Truth be told, the folks that I've seen down and out are on heroin, crack, or alcohol.
The only object of liberty is life. -- G. K. Chesterton

Beer is proof that God loves us and wants us to be happy. -- Benjamin Franklin
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

ArmChairIntellect
Why thank you Buela.  JesusTheMoose I would just like to point out that through out our recorded history there have been a percentage of the poplation that have had poor self control, for whatever reason this may be and there could be an infinite amount of possibilities for their lack of self control.  No matter how far back you look you will find this, so one has to understand that addiction is part of the human experience.  People need to stop trying to dictate what others are allowed to do to themselves.  If said individual hurts others then they must suffer whatever consequences stemming from that are, usually its the inabliers that pay the largest price for addiction, not the addicts.  This is rarely discussed within the treatment aspects of addictions.  If people are down and out it is for them to pick themselves up, not anyone else to try to do this for them.  This is not because we don't care about these people but rather because they are the only ones that can choose to stop, no one else can do this for them.  We can help and support them, that is all.    
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Cuete
Yeah the word is they sent a handful of Dispensaries that are "too close to schools and day cares etc" a love letter telling them they had to vacate in 45 days or they would be raided....The feds are also bitching about dispensaries who they think "are in it to make money not to help people" it is a joke California is real lax on weed anyway cops really dont give a fuck about it around these parts and in the nice part of Oakland we have a fuckin University for the "medical marijuana growers/dispensers" called Oakstradam University. Feds are wasting their times busting random ass dispensaries when everyone in the Bay knows they can always get weed in the hood or go straight to Humboldt and Mendocino...The feds threaten to do all sorts of shit anyway they were suppose to "take over" the Oakland Police Department because they are too quick to draw their guns and shoot and absolutely suck ass at solving crimes or even responding to real crime (Hell they give out speeding tickets all day on East 14th and International while gunfire can be heard in the background)...Bottom line the Feds bullshit too much even if they do hit some dispensaries it aint gonna do no good cause by day 40 of the deadline the weed wouldnt even be there it would be on its way outta the Bay. Its just so they can look good to the people who dont know any better LOOK WHAT WE ARE DOING TO FIGHT THE WAR ON DRUGS AT HOME!!!!
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Malo Compañía
In reply to this post by Chivis
More Obama Games, he needs to draw attention since they found 2 hundred more Fast and Furious Guns today in a bust.
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Re: FEDS SLAMMING SHUT THE DOORS OF Calif pot dispensaries

Chivis
Administrator
In reply to this post by Chivis
A tour of "dispensaries"

los angeles:  
http://www.youtube.com/watch?v=W_NtAFht1jY


http://www.youtube.com/watch?v=hrnmVyL2RVc&feature=related

santa ana

http://www.youtube.com/watch?v=wDX4ck2GZAs

Montel Williams'

http://www.youtube.com/watch?v=CzCaDq7leRI&feature=related 
 
The way I see it.... the more people that don't like me, the less people I have to please