Weed Wars

Dispatches from the California Marijuana Front

April 19, 2010
Advocate lawyer warns that 'capitalist' dispensaries may close

IMG_0051[1].JPGOakland lawyer William G. Panzer came to last weekend's International Hemp & Cannabis Expo aptly wearing a medical pot tee-shirt and handing out business cards printed on hemp fiber paper.

Then the co-author of the Proposition 215 medical marijuana law and winner of a High Times Magazine "Freedom Fighter" award told dispensary officials and wannabe pot shop operators they may well be breaking the law.

He also predicted there could be a major downsizing in the medical marijuana trade. Panzer said California courts could order closure of scores of cannabis outlets that don't operate as strict, non-profit, socialist-style collectives.

"A dispensary is a place where cannabis is distributed," he told the convention crowd at the Cow Palace in Daly City. "It can be set up as a lawful cannabis collective or as an illegal retail sales outlet. I think the way most dispensaries are set up, they are retail operations.

"The truth is, if you set up lawfully, you're not going to make money. And there are a lot of people for whom it is more important to make money than to serve patients."

Panzer represents dispensaries and advises them on how to organize lawfully as patient networks. But the sharp words of the leading medical marijuana advocate seemed to buttress a hard-line view expressed by Los Angeles City Attorney Carmen A. Trutanich.

Arguing that dispensaries are illegally operating as retail stores, Trutanich has won two court injunctions against Los Angeles dispensaries. Judge James C. Chalfant this month ordered a popular Venice Beach dispensary, Organica, to stop selling or distributing marijuana. In January, Chalfant's injunction barred sales at the Hemp Factory V in Eagle Rock.

The L.A. actions have been assailed by the patient advocacy group, Americans for Safe Access, as violating "the letter and spirit" of state law and the city's dispensary ordinance.

Prosecutors in San Diego County have taken a similar view as those in Los Angeles, but have lost twice in recent prosecutions of medical marijuana operators.

Panzer said a state appellate court may ultimately issue a ruling that may force many improperly run dispensaries to close.

He counseled people operating dispensaries to follow the mandates of a "closed-circuit" patient collective. Under such rules, all marijuana is cultivated and distributed by medical marijuana users who are members of the collective. Any payments for pot are reimbursement for services provided by the non-profit collective.

As one woman asked Panzer about potential income tax deductions from a medical pot business, he abruptly cut her off.

"I'm counseling people not to be a business," he told the crowd. "You have to stop thinking that it is a business. There is no buying and selling."

In an interview, he said many marijuana dispensaries are operating correctly and legally. But he said there are also pot shops set up as "sole proprietorships and limited partnerships that are owned by somebody. You see advertisements to sell them.

"That's not socialism. It's capitalist."

Pictured: Oakland attorney William G. Panzer at Hemp & Cannabis event. Peter Hecht/phecht@sacbee.com

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