Pubdate: Sat, 19 Jan 2013
Source: Sacramento Bee (CA)
Copyright: 2013 The Sacramento Bee
Author: Peter Hecht


A partner in a medical marijuana enterprise pleaded guilty to federal
drug charges Friday, even as the debate rages over a federal crackdown
against marijuana providers operating under California law.

Lynn Farrell Smith, 62, of Stockton pleaded guilty in a Sacramento
federal court to manufacturing and distribution charges that can send
him to federal prison for five years. He was a partner in a venture
that included a Stockton marijuana cultivation warehouse and seven
dispensaries, including four in Sacramento.

Meanwhile, a public appeal  including letters to President Barack
Obama and U.S. Attorney General Eric Holder, and a communications
effort by former Clinton administration officials  is being made on
behalf of another partner, Matthew Davies, 34, also of Stockton.

Davies, whose enterprise included the MediZen, River City Wellness,
Twelve Hour Care and Sacramento Patient Group dispensaries, is being
portrayed by his wife, his lawyer and a public relations team as an
honorable businessman and father who was compliant with California
medical marijuana law.

Federal prosecutors, however, say Davies' venture consisted of "large
scale" commercial marijuana distributors who profiteered in violation
of both federal and state laws.

In a letter to Obama, Mollie Davies wrote that her husband, the father
of two daughters, faces extended time in federal prison "for providing
medical marijuana to sick people in California, even though he
complied with state law concerning medical cannabis."

His lawyer cited a 2009 Justice Department memo, declaring that the
government wouldn't target patients and caregivers compliant with
state law, to decry his prosecution in a letter to Holder.

Davies' defense team has hired the communications firm headed by
former Clinton administration officials, Chris Lehane and Mark
Fabiani; and backers have launched a "Keep Matt Free" website.

But in a letter to Davies' attorney, Elliot Peters, U.S. Attorney
Benjamin Wagner in Sacramento said: "Mr. Davies was not a seriously
ill user of marijuana nor was he a medical caregiver  he was a major
player in a very significant commercial operation that sought to make
large profits from the cultivation and sale of marijuana."

Wagner detailed a plea bargain offer of six to seven years in federal
prison, which Davies hasn't accepted.

Federal prosecutors say one of the venture's dispensaries grossed $3
million a year, producing a profit of over a half-million dollars and
that partners also operated two cultivation centers, including one
with more than 2,000 plants.

While all marijuana, medical or otherwise, is illegal under federal
law, the case illustrates the challenges of California's vague medical
marijuana laws.

State voters approved medical marijuana use in 1996, but California's
billion-dollar industry of dispensaries has thrived under the hazy
language of a 2003 law, Senate Bill 420. It declared that medical
marijuana patients can "associate" to "collectively or cooperatively
cultivate marijuana for medical purposes" but made no mention of pot
stores or commercial cultivation.

"The problem is it is not clear what that means," said George Mull, a
Sacramento medical marijuana lawyer and president of an industry
group, the California Cannabis Association. The group last year backed
unsuccessful legislation to establish a commission to regulate and set
rules for dispensaries and medical growers.

Colorado, which licenses medical marijuana workers, stores and
cultivation facilities, has not drawn nearly the same level of federal
prosecution as California.

"My guess is the feds would be much less likely to bring actions in
California if there were reasonable regulations" spelling out rules
for medical marijuana distribution under state law, Mull said.

Friday's federal guilty plea by Smith came after a third defendant,
Robert Duncan, pleaded guilty to federal marijuana charges last
September. They are to be sentenced April 5 and March 22,

In a statement on behalf of Davies, who appeared in court Friday,
attorney Steven Ragland said: "The case of Matt Davies demonstrates
more than any other case ... the conflict of federal and state law
regarding medical marijuana."

He said his client "trusted President Obama and his administration
when they told the American people they would not prosecute people who
follow state law."

In another case this month, a Los Angeles federal judge sentenced
Aaron Sandusky, 42, operator of medical marijuana dispensaries in
Riverside and San Bernardino counties, to 10 years in federal prison
after U.S. prosecutors asserted in a memo that Sandusky "used the
perceived ambiguity surrounding 'medical' marijuana to exploit a
business opportunity." 
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