Pubdate: Thu, 15 Jan 2015
Source: Orange County Weekly (CA)
Copyright: 2015 Village Voice Media
Contact: http://www.ocweekly.com/feedback/EmailAnEmployee?department=letters
Website: http://www.ocweekly.com/
Details: http://www.mapinc.org/media/322
Author: Nick Schou

THINK THE KUSH EXPO MEANS POT IS LEGAL?

You Must Be Ana-High!

EVERY SUMMER FOR THE PAST FIVE YEARS, the Anaheim Convention Center, 
a swirly tower of concrete and blue-tinted glass, transforms itself 
into a mecca of marijuana. This magical event, the world's largest of 
its kind, lasts exactly two days and happens just across the street 
from the Disneyland Resort. It's called the Kush Expo.

On display inside the four-hall, football field-sized facility are 
dozens of vendors hawking products ranging from the latest vaporizers 
to bongs, soil nutrients and hydroponic growing equipment. There's 
the annual Kush Cup Awards, offering recognition for best indica, 
sativa and hybrid strains; oil; wax; hash; edible chocolate; vape 
pen; and tube bong-to name but a few categories. Then there's the Hot 
Kush Girl Contest, in which bikini-clad lasses with green numbers 
spray-painted on their thighs compete for up to $500 and a gift bag.

If all the bare flesh and bong raffles aren't enough to keep you 
entertained, you can step inside an open-air white tent out back, 
where folks with a doctor's recommendation for medical marijuana can 
smoke pot while guarded by Anaheim police officers. Doctors are 
on-site and available to help out the poor souls who forgot their 
cards. For a small fee, they can figure out what ails you, and presto 
change-o, you're a certified medicinal-marijuana patient.

It's a toker's paradise, one that makes Colorado seem as libertine as 
a Mormon party, and is fully approved by the city, which owns the 
Convention Center. But during the other 363 days of the year, Anaheim 
is as anti-pot as you can get. The city first banned 
medical-marijuana dispensaries in 2007, and it has extended and 
strengthened that ban every year since, adding delivery services to 
the prohibition in 2013. Last October, council members ordered staff 
to begin cutting electricity and water services to anyone violating the ban.

As with many other cities in California, however, Anaheim knows that 
bans that exist on paper can only do so much to fight the rapid 
growth of dispensaries that occurred following the Obama 
administration's so-called Ogden Memorandum (or Ogden Memo) of 2009, 
which (falsely, as it turned out) indicated the Justice Department 
wouldn't interfere with states that had legalized medical marijuana. 
So city officials eagerly turned to the U.S. Attorney's office, 
inviting it to threaten landlords in their city with asset-forfeiture 
lawsuits and DEA raids.

On Aug. 21, 2011, the feds obliged, filing lawsuits against six 
dispensaries in Anaheim and sending letters to more than 60 property 
owners and dispensaries in the city, as well as neighboring La Habra, 
threatening seizures and raids to anyone still open within 30 days. 
One of those lawsuits targeted a collective called Releaf Health & 
Wellness, located in a nondescript, twostory, multi-unit building at 
2016 W. Ball Rd. The city also sued the landlord, Tony Jalali.

This particular pair of lawsuits was pointless: Releaf had closed 
days before the city sent the notice, and Jalali had sent a certified 
letter to the city informing it that his property was now officially 
pot-free. Yet Anaheim refused to back off, perhaps hoping to make an 
example out of Jalali and his tenant.

Backed by Best, Best & Krieger (BBK), the largest anti-marijuana law 
firm in California-the lawyers there literally wrote the book on how 
municipalities could ban pot clubs-Anaheim worked with the feds to 
seize his $1.5 million building, citing exactly one $37 pot sale to 
an undercover police officer that was perfectly legal under state 
law. Yet in the face of an unprecedented legal and publicity campaign 
(spurred in part by the Weekly's coverage), the feds ultimately 
backed out of the battle, promising to never threaten to seize the 
building again.

Now, three years later, Anaheim continues its quest to punish Jalali 
and the hapless former operators of the long-defunct Releaf 
collective. Meanwhile, despite the city's continued ban on pot clubs, 
largescale marijuana dispensaries continue to operate within the 
city, too deep-pocketed to worry much about fines or lawsuits. In 
other words, weed continues to flow freely in the land of the Kush 
Expo while Anaheim officials have wasted a small fortune in taxpayer 
money going after a sympathetic property owner and his long-evicted 
tenant, neither of whom has been convicted, much less charged with a 
crime, and who, by all accounts, had no intention of violating state law.

As it turned out, Anaheim had picked the wrong landlord to mess with.

In early 2010, Steve (who asked to remain anonymous) was driving on 
the 91 freeway when he saw a billboard advertising Anaheim's 
inaugural Kush Expo, scheduled to arrive in the city that July.

"I thought, 'Wow, what is all this about?'" he recalls.

Curious, Steve purchased a ticket to the event. "There was a 
medicating area out back, and there were Anaheim police officers 
monitoring the people going in, and everyone was out there smoking," 
he says. "As an outsider coming in, it was really cool. They set it 
up for someone like me to feel comfortable."

At the time, Steve's elderly father was suffering from degenerative 
arthritis and couldn't stomach the pain medication his doctors had 
prescribed. Steve's wife had also recently been diagnosed with 
scoliosis of the spine. Steve knew that there were already about 60 
collectives operating in the city, but he didn't feel as though many 
of them were truly working on behalf of patients. They advertised 
strains with names such as Green Crack and charged up to $70 per 
eighth of an ounce. Steve wanted to open a small collective that 
would help his family and other legitimately sick patients in Anaheim.

"We had a detailed conversation with one of the lawyers [at the Kush 
Expo]," recalls Bobby Holley, who attended the event with Steve that 
day and later became his partner at the Releaf collective. "We wanted 
a clear answer as to whether Anaheim was cool with [dispensaries], 
and he told us Anaheim was in the clear because there were so many 
operating at the time."

The lawyer offered to help Steve draw up legal paperwork that would 
ensure his collective was obeying state law and told Steve that 
Anaheim wouldn't interfere with his efforts. "By the time I left that 
place, I was sure it was okay," he says. So Steve paid the lawyer to 
draw up articles of incorporation for a mutual-benefit, nonprofit 
corporation. "We paid him a few grand, which I thought was high, but 
I wanted it to be as legal as possible," Steve explains.

Then Steve obtained a state seller's permit from the California Board 
of Equalization (BOE). The woman who helped Steve over the telephone 
at the BOE warned him that Anaheim might deny his application for a 
city business license, but she advised him to apply anyway, so he 
could at least document a paper trail showing he had notified the 
city about his collective.

That turned out to be unnecessary: Anaheim quickly mailed Steve the 
license, although it stated that selling medical marijuana at his 
location was prohibited under federal law. For a month, Steve and 
Holley scouted possible locations. After noticing a "For Rent" sign 
at a building near the intersection of Ball Road and Magnolia Avenue, 
Steve called the number and spoke to Jalali, who agreed to rent one 
of his vacant units to them. "He was a good guy," Steve says of 
Jalali. "He believed in patients' rights and already had two other 
dispensaries there. We provided him with all the proper 
documentation, and he accepted us."

Jalali is a highly intelligent, fast-talking, somewhat-intense man. 
An Iranian-born software engineer who holds a government security 
clearance-which is partly why he refused to be photographed for this 
story-he carries himself with the self-confidence and borderline 
impatience of a successful businessman. The longtime resident of 
Irvine had purchased the Anaheim building that eventually housed 
Releaf in 2003 as a retirement nest egg. His wife, Morgan, a dentist, 
had a practice located there, and when the building went on the 
market and the first buyer's loan fell through, the Jalalis were able 
to negotiate a good deal, buying the property for about $900,000.

In 2009, after seven years of working out of the Ball Road building, 
Morgan wanted to work closer to home, so she opened a new practice in 
Lake Forest. When the Jalalis sold the Anaheim practice, they were 
able to put $400,000 toward the $600,000 loan on the building. He 
then refinanced his home loan to pay off the remaining $200,000 on 
his mortgage.

Jalali says that as soon as he paid off the loan, he began to have 
problems with Anaheim officials who seemed eager to make being a 
landlord in the city as difficult as possible. At the time, Jalali 
had several tenants on his first floor: a dental office, an insurance 
company and an immigration services business. Upstairs, he rented to 
a business that sold cars. But the city stepped in and told him that 
even though several of his units were empty, he didn't have enough 
parking spaces. "So they stopped accepting applications from my 
tenants," Jalali says. When he complained to the city, officials told 
him that if he paid a $2,000 waiver fee, he could get around the 
parking restriction."It was ransom money," Jalali says. He refused to 
pay and instead rented the unit to an ultrasound medical company, but 
the city once again refused to allow him to take on any more tenants 
unless he paid the fee.

"For probably two years, my building was empty upstairs," Jalali 
recalls, fuming. "So I go to the city and asked who I could rent to, 
and the guy tells me a shoeshine business. I have 12 units upstairs. 
It was an insult to me for him to say that."

By 2011, Jalali had written several letters to various city officials 
complaining about his treatment, without any response. So when a 
medical-marijuana collective asked about renting a unit upstairs, he 
gladly accepted. As far as Jalali was concerned, dispensaries were 
legal under state law and Anaheim had allowed the Kush Expo to 
operate for two years running. What could possibly go wrong?

A lot, as it turned out. After a few months, Jalali's other tenants 
complained that the owner of the collective was smoking pot in one of 
the building's bathrooms. Jalali confronted the man, who promised to 
never do it again. When the dispensary was late with the rent a month 
later, Jalali says, he refused to extend the club's lease. Jalali 
also rented to another dispensary but soured on that tenant's style 
of operation. "I got a call from the dental office about people in 
the parking lot and found out they were operating a happy hour," 
Jalali says. "To me, this was illegal activity. I kicked him out. He 
had to leave within 30 days."

So when Steve called Jalali looking for a rental space for Releaf 
Health & Wellness, Jalali was in the process of phasing out the other 
two collectives. He insisted that Steve not only stay well within 
state law, but also do nothing to bother other tenants, much less 
create a public nuisance that would draw police attention. Steve 
signed his lease with Jalali on June 11, 2011.

"To be honest with you, Tony was a pain in my ass," Steve says. Once, 
Jalali scolded Steve for allowing teenagers into the collective, so 
Steve had to show him proof that the patients were at least 21 years 
old. When Jalali complained about the smell, Steve installed an 
expensive filtration system to fix the problem.

In fact, Steve and his wife had invested their life's savings into 
fixing up the unit and opening the Releaf collective. It was a 
stressful time, he says, complicated by his wife's cancer diagnosis. 
In late 2011, the same week his wife went into the hospital for 
surgery and chemotherapy, he suffered a heart attack. But, Steve 
says, the experience only strengthened his resolve to make Releaf a 
model dispensary.

"We went above and beyond the guidelines to regulate ourselves," he 
insists."Our whole goal was to provide safe access to patients. We 
were not pot dealers out to make money."

According to both Steve and Holley, the city never sent them a single 
letter telling them they were operating illegally. And the only time 
uniformed police officers visited Releaf was when a burglar broke a 
window at the shop and triggered an alarm. "The cops showed up and 
called [Steve] and said we needed to go down there," Holley says. "We 
didn't know what to expect, but sure enough, a guy had broken in and 
stolen a few little things."

According to Holley, the obvious fact that he and Steve were 
operating a marijuana dispensary never came up in conversation with 
the officers. "The cops were actually really cool about it," he 
says."It wasn't a secret what we were."

Unbeknownst to Steve or Holley, Anaheim police were already 
investigating Jalali's tenants, including Releaf. According to files 
obtained by the Weekly, the investigation began with a tenant whom 
Jalali was in the process of evicting. Detectives had used Weedmaps 
to view a Jan. 1, 2011, message by a reviewer named Filiblunt 420.

"Happy New Year my fellow potheads!!!" the post reads. "Man, [the 
collective] gots it goin on [sic]. . . . I picked up some Platinum 
Kush, some Blackberry and they hooked me up with some Plain Wreck!! I 
just toked on a gram of each and every hit was an adventure!! I am SO 
LIFTED right now . . . Even as I am typing this review."

Because Jalali evicted that dispensary, officers turned their 
attention to Steve's collective. Late in 2011, an undercover police 
officer showed up at the Releaf Health & Wellness asking for 
marijuana. Because the cop didn't have a doctor's note, he wasn't 
even allowed inside the dispensary, in accordance with California 
law. So on Dec. 2, the officer posing as a patient returned with a 
legitimate doctor's recommendation for cannabis- and according to 
police notes, he was able to purchase "4.2 net grams of marijuana for $37."

At other collectives, that amount would sell for an average price of 
$65, according to Steve. "We gave it to him for wholesale," Steve 
says. "That's nonprofit in my book. But that's how we did business. 
It was for the patients."

Despite the cheap price, the $37 marijuana transaction, which was not 
only perfectly legal under state law, but also a heck of a bargain, 
became the linchpin for Anaheim's civil lawsuits against Jalali and 
Releaf, as well as the federal government's attempt to seize Jalali's 
building. The Weekly broke the story in a Feb. 7, 2013, article that 
noted that Jalali had evicted Steve as soon as he received his first 
letter from the city warning him that his tenant was violating federal law.

But neither Anaheim nor the feds would drop the case.

For Anaheim, part of the explanation for this may lie with the law 
firm it has paid to prosecute medical-marijuana cases for the past 
several years. BBK is based in Riverside, but it has offices 
throughout California and even a lobbying wing in Washington, D.C. 
Originally formed in 1915, it represents private business interests, 
particularly those seeking to privatize public services (especially 
water agencies) at the same time it represents public sector 
agencies, especially cities.

BBK works on behalf of dozens of cities in California-including 
Anaheim, Westminster and Lake Forest in Orange County alone-as well 
as numerous public agencies including county governments and school 
districts. The amount of billable hours is mind-boggling; a Weekly 
public records request for all invoices submitted to the city by BBK 
during the past four years turned up no less than 1,317 pages asking 
for payments for legal work.

Among BBK's more controversial clients in recent years is the city of 
Bell, whose top officials illegally granted themselves six-figure 
salaries and bloated pensions, leading to a nationwide scandal and 
the arrest of several city officials. BBK lawyer Edward Lee (who also 
worked for the cities of Downey and Maywood) escaped criminal charges 
but was fired by BBK, which ended up being sued by Bell for providing 
bad legal advice.

"They were the attorneys for Bell when it became a charter city in 
2005, which Bell officials thought gave them a way to avoid salary 
limits," says Jeff Gottlieb, the Los Angeles Times reporter whose 
reporting on Bell with Ruben Vives won the 2011 Pulitzer Prize for 
public service. "In fact, their new charter screwed up and didn't 
allow that, which is one of the reasons the city council members 
could be charged."

In the war on marijuana, BBK not only has helped specific cities such 
as Anaheim to draft ordinances to ban collectives, but one of its 
lawyers, Jeffrey Dunn, has successfully argued on behalf of the 
League of California Cities for the right to ban dispensaries before 
the California Supreme Court in the so-called Riverside decision. 
(Dunn did not respond to interview requests.) That 2013 case stemmed 
from a challenge to Riverside's ban on marijuana dispensaries, an 
ordinance drafted by-you guessed it-BBK lawyers hired by Riverside 
city officials.

It might seem like a conflict of interest for a law firm to help 
businesses profit from the same government entities it represents in 
court, but not according to BBK. Denise Nix, BBK's marketing 
communications manager, sent the Weekly an email saying the firm 
wouldn't comment for this story. Sonia Carvalho, a BBK partner who is 
also Santa Ana's city attorney and who co-wrote a 2010 paper with 
Dunn titled "The Legal Basis for Banning Medical Marijuana 
Dispensaries," didn't respond to a Weekly interview request. But in a 
2009 article for the now-defunct Inland Empire Weekly, she provided a 
written statement to that paper insisting that BBK plays no role in 
crafting public policy.

"We advise cities on what the law says," Carvalho wrote. "We are 
always ever sensitive to understanding our role and not becoming 
involved in the public policy debates."

After Anaheim, with help from BBK, sued Jalali, crusading 
medical-marijuana attorney Matthew Pappas offered to represent the 
property owner pro bono. Both Pappas and his researcher, Sergio 
Sandoval, had done similar legal work on behalf of marijuana 
collectives throughout Orange and Riverside counties, and BBK had 
always been there in the courtroom.

"I first became aware of BBK because of Dunn's constant presence at 
various court hearings involving the establishment of medical 
marijuana in California," Sandoval says. "His attendance was often to 
monitor key hearings, while other times, he was arguing on the side 
of prohibitionist cities. . . . For the past four years, every person 
involved in our law firm has wondered why it is that BBK is so 
obstinately opposed to the implementation of the state laws regarding 
medical marijuana."

"It's a money thing with them," Pappas says. "There's a ton of money 
to be made, and that's what they do."

In October 2013, two years after Anaheim sued Jalali and invited the 
federal government to try to seize his building, that effort failed 
with an exclamation point. Alerted to the case by the Weekly's 
coverage of the story, the libertarian law firm Institute for Justice 
took on the case, also pro bono. Before agreeing to drop the case, 
the U.S. Attorney's office had tried to pressure Jalali to agree to 
surprise inspections and to never rent to another dispensary. When he 
refused, the feds caved in and withdrew its case with prejudice, 
essentially promising it would never attempt to take the building again.

Anaheim is still suing Jalali and his former tenants, Steve and 
Holley, for violating Anaheim's ban on marijuana dispensaries. The 
suit was filed by Dunn on behalf of the city on Aug. 22, 2012; the 
trial started Jan. 13.

Meanwhile, the weed world anxiously awaits the release of tickets for 
Anaheim's next Kush Expo, which rankles Steve and Jalali.

"I never would have opened the collective if I hadn't visited the 
Kush Expo," says Steve, who declined to be photographed out of fear 
of retaliation by the city. "Now, my wife has cancer, we lost our 
life's savings, we are on the verge of losing our house, and Anaheim 
wants another $25,000 from me. There is no way I can pay that."

With his collective gone, Steve has to go to other dispensaries that 
continue to operate in the city to find medicine to help his wife. 
"We get her medication from different places, but some are sketchy, a 
bunch of thugs or hoods running them," he says. "I don't want them 
shut down because I want access, but I want safe access, not just 
punks slinging pot to anyone who walks through the door."

Jalali, apparently emboldened by his victory over the feds, is now 
renting space to a brand-new marijuana collective. He says he won't 
evict the tenant until Anaheim closes down the Kush Expo. "During all 
this time, we kept pushing the federal government, saying that if 
this dispensary is illegal, go after the source, the city of Anaheim 
promoting the Kush Expo with show girls," he says. "I am willing to 
stop it in my building if the city is willing to stop the Kush Expo."

"I would like to have a trial," says Pappas. "I believe the city's 
purpose in attacking [Jalali] was to obtain the forfeiture money and 
not to abate nuisances. We asked for all complaints from citizens, 
and [the city] sent us two items, one of which was centered on the 
Kush Expo. . . . They are like a big dog that has bitten down and can't let go."
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MAP posted-by: Jay Bergstrom