Cannabis Club Raided for Nonprofit Violations

[Binky]

West Hollywood, Calif. -- A Los Angeles police raid on a West Hollywood cannabis club last week led to the arrest of a total of 14 people and the seizure of 800 pounds of marijuana and over $300,000 in cash.
Authorities said the police raid took place on Friday, May 13, around 6:40 p.m. at Compassionate Caregivers, that has catered to hundreds of patients living with HIV/AIDS, cancer, glaucoma and other chronic illnesses.

Equipped with a search warrant, nearly 30 armed agents broke down the club’s front door and confiscated evidence including $300,000 to $500,000 cash as well as 800 pounds in unpacked marijuana (which equates to 3,000 marijuana plants) Thai sticks, compressed hashish (liquid marijuana) and food laced with marijuana.

It is unclear when the club, referred by locals as Yellowhouse for its painted exterior and located at 1209 N. La Brea Ave., will reopen for business.

During the raid, police arrested 13 people -- including the manager, supervisor, two security guards, salespersons and plant growers -- on felony charges of maintaining a location for sale of controlled substances, said LAPD spokesperson Sgt. Catherine Plow.

Police also arrested a patient for allegedly possessing more than eight ounces of marijuana, which violates California medical marijuana laws.

All 14 individuals were released on $30,000 bail each the next morning, said Lenore Shefman, an attorney representing Compassionate Caregivers.

Plow said that police had recently discovered the club was not operating as a nonprofit, as required by state law, and sold marijuana plants to patients.

According to Plow, a woman who was arrested last September for possession of marijuana plants claimed she had bought it from the West Hollywood club, prompting LAPD narcotics officers to launch a surveillance and investigation into the cannabis center.

“This place was for profit. In a sense, they were dealing narcotics,” said Plow. “That is where the problem comes in ... they were operating out of the existing laws which was what led to the search warrant.”

The West Hollywood Sheriff’s Department did not participate in the joint LAPD-IRS raid.

The raid came at a time when city officials have declared a one-year moratorium and are looking into ways to regulate seven cannabis clubs in West Hollywood.

Meanwhile, medical marijuana advocates and club employees — one describing the raid as their “worst nightmare” -- are condemning the LAPD action.

“We are kind of shell-shocked here,” said Sparky Wilson Rose, executive director of Compassionate Caregivers. “We don’t understand the raid. We don’t understand the military kind of force used in the raid, especially with the use of guns et cetera.”

Rose confirmed police allegations that the club was a for-profit business, but claimed that operators only kept 10 percent of its profit.

“The law SB 420 does not say that operating for profit is against the law, so we do operate for profit but not for excessive profits,” he said.

The club also sold immature marijuana plants to patients which is permitted under state laws as long they do not exceed the 12-plant limit per patient, Rose said.

“The reason we sell plants to patients is for them to grow their own medicine because it makes themselves self-sufficient, so they don’t necessarily have to rely on dispensaries or turn to the street for medicine,” he said.

During a phone interview with the Independent, both Rose and the club’s general manager expressed surprise at police allegations of having sold more than 8 ounces of marijuana to a patient.

“We didn’t know about that,” said the general manager who ran the West Hollywood dispensary, who spoke on condition of anonymity. “There is no way [any patient] would be allowed to more than 8 ounces per purchase. We just don’t allow it.”

Kris Hermes, legal director for Americans for Safe Access, an Oakland-based medical marijuana advocacy group, said any raid by a state law enforcement agency represents “an affront” to medical marijuana patients.

West Hollywood city officials, who have been strong defenders of medical marijuana use, have largely stayed on the sidelines on the cannabis club raid.

“I don’t think there is a general city opinion,” said Helen Goss, city public information, hearing and legal services director. “We are still in the process of fact finding and trying to find what happened, how the raid happened to the point that it did.”

Goss added that West Hollywood are expected to discuss the process for future inter-jurisdiction cooperation with Los Angeles law enforcement and district attorney officials.

Councilman John Duran, who learned about the raid over the weekend, declined comment.

“I’m not going to say anything until I find more information,” said Duran, an attorney who once represented the now defunct Los Angeles Cannabis Resource Center, that was shut down by federal drug enforcement agents during a raid over three years ago.

“What’s curious to me is the LAPD operating in West Hollywood -- it is out of their jurisdiction.”

But Plow defended the department’s action as a “fairly common procedure” and said it was not unusual for narcotics investigators to cross city and county lines.

Source: Los Angeles Independent (CA)
Author: Rosanna Mah, The Independent Staff Writer
Published: May 11, 2005
Copyright: 2005 Los Angeles Independent Newspaper Group
Contact: editor@laindependent.com
Website: http://www.laindependent.com/

[Hotglass]

What's the deal with the story, did it already happen and is date wrong or is this true? :confused:

[Green Medicine]

It happened on the 9th......

These Guys are the Gangsta's of medical MJ. They sold to people with NO Doctor's recomendations...to gangs...The place was a crackhouse with kids and non patients splitting up meds in the streets around this place. I personally witnessed 3 separate 1 pound sales to the same person in one day!

They have RUINED MMJ in California by filing business applications in EVERY CITY IN California and causing many cities to "panic" and create moratoriums AGAINST clubs opening in their cities.

They are well known for practices such as KEIFING meds prior to sale - A definite NO NO - And selling the keif next to the buds they raped them from!

Yellow house was staffed by stoned teens that knew nothing about the meds or clones they sold. They had nice clones...but a constant powdery mildew problem.

I once went to buy a few Romulan Clones and they had PM...the stoned employee took the clones, misted them with water and said: "there it's gone" OMG! Of course they were put back to infect other plants...

I saw them serve people with no Doctors recs on several occasions, only after giving them a card to go see "thier special doctor"...a Felony.

These guys are bad for the med movement....good riddance.

Here is the Article that broke the story: See below

[Green Medicine]

5/11/05 - NEWS: West Hollywood Medical Cannabis Club Busted by LAPD and IRS – City of WeHo Upset by Raid

By Ryan Gierach - WEHO News

After an eight-month investigation, LAPD narco squad officers and Federal Internal Revenue (IRS) agents raided a medical cannabis club operating in West Hollywood, arresting 14 people and seizing 800 pounds of marijuana product (wholesale value, $2.5 million; retail value over $5 million) and between $300-500,000 in cash.


The Yellow House, or Compassionate Caregivers medical marijuana facility at 1209 N. La Brea Ave., West Hollywood, CA. Photo by Ryan Gierach

City officials both applauded and booed the bust by another jurisdiction’s law enforcement agency. “We support any law enforcement agency’s removing from our neighborhoods any business involved in illegal activity,” said Helen Goss, city communications director.
But condemnation of the tactics buzzed through city hall. One city staffer told WeHoNews that he felt violated. Jeff Prang, city council member and a deputy sheriff himself, decried the raid into the city from a neighboring city’s law enforcement agency, even though routine warrants are often served inter-jurisdictionally.
“This was not routine in any way…I don’t want LAPD conducting any more of these raids in our city,” Mr. Prang said point-blank. “It is…the City council’s intention to act as arbiter of what is lawful in our community, not LAPD.”
The targeted club, Compassionate Caregivers located at 1209 N. La Brea Ave and commonly known as the “Yellow House,” had been under surveillance by LAPD since September 2004 after the arrest of a Compassionate Caregiver patron with 60 marijuana plants in his possession, all allegedly purchased at Yellow House.
According to LAPD spokesperson Sgt. Plow, that surveillance found that the club allegedly sold large amounts of marijuana to customers on a regular, sometimes daily, basis. State law forbids the sale of more than eight ounces of medical marijuana to a patient at one time.
“We formed the opinion that the club was in violation of Health & Safety Code 11360 (transportation, distribution or importation of controlled substances) through the surveillance,” Sgt. Plows told WeHoNews.com. “They regularly sold 8 ounce and one pound quantities to people who made sometimes daily buys. There were an average of 235 visits a day to the house. That’s drug dealing, not medicine dispensing.”


Gate and notice at Yellow House on May 9, 2005. Photo by Ryan Gierach

Acknowledging that the IRS had been involved in the months’ long investigation, Sgt. Plow said, “The key to [IRS involvement] in this raid was the money-laundering investigation [the IRS] is conducting into these businesses. This one was obviously set up for profit, and the law says they should be non-profit.”
LAPD arrested employees and patrons en masse and charged 13 people with felony counts of H&SC 11366 (maintaining a place for selling, giving, using controlled substances); one man allegedly holding 21 grams of marijuana but no letter of recommendation identifying him as a medicinal marijuana user was charged with a misdemeanor count of possession.
Sparky Wilson Rose, executive director of Compassionate Caregivers, told another print newspaper that the club was a for-profit business, and that he read the law not as requiring non-profit status, but as excluding for-profit clubs from making "excessive profits."
All who were arrested were bailed out the following morning and are being represented by West Hollywood lawyer Bruce Margolin. Mr. Margolin’s website states that he was “an advisor for the California Compassionate Use Act – Prop. 215...He is the author of “The Margolin Guide To Marijuana Laws” and is unarguably the nation's foremost authority on marijuana law.”
Calls to Mr. Margolin, who is traveling, went unreturned before press time.
An IRS spokes person declined to discuss any ongoing investigations.


Many cancer, arthritis, and HIV patients rely on the medicinal qualities of marijuana. Patients decry those who would pervert the system by purchasing it, and sometimes re-selling it, for recreational use. Photo by Ryan Gierach

As to LAPD’s plans to crack down on the other six clubs still operating in West Hollywood, Sgt Plow told WeHoNews that no other clubs, so far as she had been told, were under surveillance by LAPD.
“That doesn’t mean they aren’t surveilling, it only means they don’t tell me what they are doing,” she said. “This surveillance began with a lead from another arrest; LAPD has no plans to raid other clubs [in West Hollywood].”
According to Kristin Cook of the city’s public safety staff, such inter-jurisdictional investigations are quite common, especially in drug cases. “This case was unusual because the ‘gentleman’s agreement’ that exists between agencies about prior notification of a major raid didn’t happen,” she said. “The city and the [Sheriff’s] station are displeased at the short notice we received.”
Capt. David Long, chief of the West Hollywood Sheriff’s Station, told WeHoNews.com that “they did give us a 15 minute notice as a courtesy and safety measure, but I would have liked a little bit more information and time before they came in.
“I can’t say they won’t come in again, but we will see to it that they won’t come in without prior knowledge,” Capt. Long said.
Ms. Cook acknowledged that discussions on the controversy had begun between municipalities. Sgt. Plows told WeHoNews.com that LAPD Chief William Bratton and Sheriff Lee Baca had already spoken about the raid and bettering inter-agency communication.
“From our perspective,” Sgt. Plow said, “this was a routine raid until we found so much product and cash.”
Mr. Prang told WeHoNews.com that news of "so much product and cash" at the business heightened his concerns for the public’s safety, making it more urgent that regulations be put in place to protect the residents from the dangers a concentration of medical marijuana distributors posed.
“When you have businessmen who keep that much marijuana and hundreds of thousands of dollars in cash, and guns, in their shops, they’re going to be targets for violent crime,” he said.
“My concern is these guns near residential neighborhoods; money, drugs and guns invite disaster.”


Two of the clubs at Fairfax and Santa Monica employ security guards with guns to guard their premises. Those charged with the public’s safety consider them dangerous. The clubs claim the guns act as deterrents against robbery. Photo by Ryan Gierach

Susan Healy Keene, acting director of community development for West Hollywood informed WeHoNews.com that the first “all-hands” meeting of the committee put together to explore regulating medical marijuana facilities in the city would meet Wed., May 11 at city hall.
She said that the committee would look at a wide range of issues, including safety issues and neighborhood impacts, revenue assessments, among others.
The founder of West Hollywood’s first opened – and first raided and closed – medical marijuana co-op, Scott Imler said, “It’s about time [the city] began putting some thought into this; this raid is the unfortunate result of their ‘don’t ask, don’t tell’ policy since the LACRC raid (Mr. Imler’s co-op was shut down in 2001 by the Bush Administration; he escaped with a relative slap on the wrist – one year probation).
“They got stung and are still dealing with a $300,000 lawsuit [with the Dept. of Justice over the raid], so it’s understandable that they would be reluctant to regulate. But now they are beset with all these clubs they know nothing about. They have to try to find out what’s going on inside them.”
For Mr. Prang’s part, “this is an issue about which I and the entire council feel strongly. Patients ought to have access to the medicine they need. West Hollywood is a strong supporter of patients’ right to obtain medical marijuana.
“We do not condone drug dealing in our city. We do not approve of otherwise healthy people abusing the system by obtaining letters from ‘pot docs’ to use medicinal marijuana recreationally,” he said.
“We acknowledge that problems arise because of the rapid proliferation of these clubs in our small city, and we will regulate them so that they can provide their service and medicine safely in our community.”
Seeking a response to those comments on public safety, WeHoNews made calls to the Medical Marijuana Farmacy, the club employing the most visible of the armed guards (pictured above). Those calls were not returned.

[Hotglass]

Selfish greedy pig assholes like this just piss me off to no end!
Every valid cause has jerkoff artists come at it and bleed it dry for their own benefit! Glad they got busted!! Good riddance!

[purplemyst]

damn fools... and kiefing the buds to boot..

SHAME ON THEM.

myst