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Feds Targeting Property, Assets in Fight Against Marijuana Dispensaries

Under forfeiture laws, property owners may face loss of properties where storefront and growing operations are located

Santa Barbara police Sgt. Riley Harwood speaks with the media Thursday about marijuana busts.
Santa Barbara police Sgt. Riley Harwood speaks with the media Thursday about marijuana busts.  (Lara Cooper / Noozhawk photo)

By Giana Magnoli, Noozhawk Staff Writer | @magnoli |

In their stepped-up battle against local marijuana dispensaries and growing operations that supply them, federal authorities are employing a powerful weapon: asset-forfeiture laws.

The U.S. Attorney’s Office this week filed legal complaints for forfeiture against the property owners of two South Coast medical marijuana storefront dispensaries and one indoor farm. They allege that the owners should have known what the buildings were used for — growing and/or selling marijuana, which the government considers illegal under both federal and California law, even if the marijuana is considered medicinal.

Citing past testimony that points to each establishment selling and/or buying marijuana products and making a profit off it, the properties were allegedly used to facilitate law violations and are subject to U.S. forfeiture laws, according to the complaints, signed April 20 by U.S. Attorney Andre Birotte Jr.

The cases will go through U.S. Central District Court.

Drug Enforcement Administration agents and local police raided the Pacific Coast Collective on Milpas Street and an indoor farm on Haley Street this week, and filed the forfeiture complaints and sent out enforcement letters to known marijuana-related operation in Santa Barbara County, authorities said.

No arrests were made.

The letters were very similar to those sent out in October, said Thom Mrozek, a spokesman for the U.S. Attorney’s Office.

The letters warn property owners that their buildings are being used by marijuana dispensaries, which violates federal law, and both the property and rent paid by the dispensary operator could be seized.

“Please take the necessary steps to discontinue the sale and/or distribution of marijuana at the above-referenced location within 14 days of this letter,” an October sample letter states.

Regardless of local laws, federal law — which doesn’t recognize medical marijuana — takes precedent, the letter states.

“Accordingly, it is not a defense to either the referenced crime or to the forfeiture of property that the dispensary is providing ‘medical marijuana,’” the letter says. “Even under these circumstances, an owner of real property with knowledge or reason to know of illegal marijuana distribution occurring on real property that he owns or controls may have his interest in the property forfeited to the government without compensation.”

Santa Barbara County has banned dispensaries while the City of Santa Barbara has an ordinance allowing up to four medical marijuana storefront dispensaries on the condition that they abide by strict operational standards and state law.

But state law regarding the dispensaries has been fuzzy, even with then-Attorney General Jerry Brown’s guidelines that left the door open for not-for-profit storefront collectives for qualified patients (with doctors recommendations).

The city’s permitted storefronts, including Pacific Coast Collective, sell marijuana to their members and have paid employees, but local court cases have shown the legality of an establishment often hinges on the amount of money coming in (covering overhead is acceptable) and where the product comes from.

Ventura County DEA agents loaded a van and a trailer with material confiscated Thursday from 305 E. Haley St. in Santa Barbara.
Ventura County DEA agents loaded a van and a trailer with material confiscated Thursday from 305 E. Haley St. in Santa Barbara. (Lara Cooper / Noozhawk photo)

According to the legal complaint, the Pacific Coast Collective at 331 N. Milpas St. is leased from property owner Matilija Investment Property LLC, with principals Jeffrey Becker of Ventura and William Jonker of Ojai. It’s managed by The Becker Group Inc. of Ventura.

The property was used as a “marijuana store” that distributed marijuana to its customers and accepted money for it in this type of business since at least 2008, the complaint alleges.

The storefront collective claims to be a medical marijuana dispensary abiding by Proposition 215, the Compassionate Use Act, but the DEA and the U.S. Attorney’s Office think otherwise.

Search warrants were served there in 2008 — when it was still Pacific Greens and owner David Najera was later convicted of drug-related charges — and 2010, when operator Charles Jeffrey Restivo was arrested and charged with felony cultivation and possession for sale of marijuana, according to the complaint.

Pacific Coast Collective was raided by the DEA and Santa Barbara police a third time on Wednesday, but no arrests were made. The establishment is one of four permitted by the City of Santa Barbara, but those permits are zoning-related and are conditional on the storefronts following state law.

The city sent cease-and-desist letters to the establishment, and Becker Group was sent a copy, and ordinance violation letters in 2008 and 2009. A police detective called Jeffrey Becker of Becker Group in 2010 and told him about the search warrants and resulting arrests, so the owner knew or should have known the property was utilized for illegal purposes, the complaint states.

Diane Norman is the property owner of 2173 Ortega Hill Road in Summerland and the operator of the Miramar Collective at that location. She has pleaded guilty to felony possession of concentrated cannabis as a result of a February 2010 raid, during which authorities found plants, packaged marijuana for sale and price sheets.

She told authorities at the time that her establishment sold plants, marijuana and edible products to members and she bought product from vendors and growers. Miramar Collective started making a profit in January 2010, according to the complaint.

Norman’s other business is the French Market antique store at the same property, and she said in a 2009 newspaper interview that she was trying to open dispensaries in the Santa Ynez Valley or elsewhere in the North County.

Senior Deputy District Attorney Brian Cota, who is assigned to most of the dispensary-related cases, said the federal government’s move to take property will likely have a chilling effect, with fewer landlords willing to rent to dispensaries.

“I wouldn’t want to lose a commercial property in Santa Barbara,” he said.

The 305 E. Haley St. property, which allegedly was used as an indoor marijuana grow by renter Steven Kessler, is owned by Janna and John Price, the complaint for forfeiture states.

The Prices own numerous properties on the South Coast, including gas stations and car washes.

The two-story building was used as a farm since at least October 2010, when neighbors complained of marijuana smells coming from the vents, and city code-enforcement and fire-inspector teams saw the plants during site visits.

They sent violation letters to the owners and Kessler over the unpermitted electrical and plumbing additions, which likely were made to support the marijuana-growing equipment, the complaint states.

The city inspectors observed plants in various stages of growth, and “the heat, humidity and marijuana odor inside the defendant property was overwhelming,” according to the complaint.

Architects were hired to help with the required renovations, and the property owner was in touch with city code-enforcement teams to provide updates on the plans for bringing the building into compliance.

In October of last year, according to the U.S. Attorney’s Office, Price called the city and said he wanted to evict Kessler, but it could take six months because of the lease. In January, his attorney called the city to ask about the pending code-enforcement action, the complaint states.

It appears the Harmony Wellness Cooperative is still cultivating and distributing marijuana at that location and so the property itself can be forfeited to the United States, the complaint says.

DEA agents and local police seized a trailer-full of pungent evidence Thursday from the Haley Street building during the raid, and also served a search warrant at Kessler’s house in Santa Barbara’s Mesa neighborhood.

Attempts by Noozhawk to reach the affected property owners were not successful Friday.

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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» on 05.05.12 @ 12:38 PM

It blows my mind that the SB City Council spent so much time/energy/money on dickering back and forth, holding meetings and hearing testimonies, etc., etc., etc… i.e., how many dispensaries in SB? Which neighborhoods? How far from schools? What is the crime impact? How much security should we require? Does it have negative effects on our children (Big DUH! on that one) ...When all along it shouldn’t have even been a topic of conversation at all on the city level until it was made legal at the county, state and federal level.

Maybe there is culpability on the part of the city to even give these dispensary owners & and property owners any false hope that what they were doing was going to pass the muster with other levels of government, just because a few people on a relatively insignificant city council decided that our town should have 3 dispensaries. Or was it 5? Or was it 4? Can’t remember since it CHANGED so many times.

Wasn’t that when Das was on the city council? And wasn’t that when he was arrogantly talking down to concerned parents, teachers and rehab specialists who were trying to stop the dispensaries from being so near to schools, let alone even be in our town? Yup, it was. I heard it.

» on 05.06.12 @ 03:31 PM

I am an Obama supporter but this Federal Targeting of marijuana dispensaries has got to stop. I believe the Fed is definitely using its power to violate its own laws.

Is it legal for the Fed to “pick and choose” which laws to “uphold” and which laws to ignore?

It seems that the Fed, for example is unable (by directive perhaps) to uphold a law like “... a rule that requires illegal immigrants to leave the United States before they can ask the federal government to waive a law that bans them from legally returning here for several years.”<>

Cook County, Ill., has ignored 268 detainers for aliens “charged with, or convicted of a crime, including serious and violent offenses on a law enforcement officer,” according to a letter from ICE Director John Morton. Cook County, home to Chicago, receives between $3 million and $4 million annually in federal reimbursements to hold criminal aliens, yet it has passed an ordinance that defies federal immigration law by refusing to hold them in custody. Irate Republicans in Congress—led by House Judiciary Committee Chairman Lamar Smith of Texas—have sent the Justice Department a letter demanding action. <>

“The federal governments’ prohibition of cannabis costs them (and by proxy, us) 7.7 billion dollars a year. If it was legalized it would save us not only that large sum but also gain somewhere between 15 and 16 billion dollars in revenue (taxes/consumer products) alone – that is above a 20 billion dollar net gain ON TOP of the illegal industry’s current net worth.

The development of the ‘Just Say No’ message alone cost the US 33 billion dollars – and yet still yielded no results, as students of high school age in both the 1970?s and today still use the same amount of illegal drugs.

What’s more, well over half a trillion dollars was spent fighting the War on Drugs, 450 billion dollars of which was spent to lock away these so-called criminals in a federal penitentiary. On average, about half of all offenders in federal prisons are serving for drug related charges.
Many of today’s teens can obtain marijuana more easily than they can with alcohol or cigarettes, proving that the legalized and fully regulated substances are much more difficult to acquire than marijuana.

These are but a few logistical reasons behind the generally wrong notion that marijuana is something only to be abused – all of them proven to be beneficial to no one, least of all the federal government. There are many more reasons on the individual level that need to be addressed, particularly the many beneficial health aspects. If this truly is an age of progression, we must move past this discrimination of marijuana as an illicit substance to be abused, so that one and all may reap the benefits and enjoy freedom given upon birth.” <>

For more examples of Federal ignoring of or upholding of laws depending on the whims of the various administrations see: <>

I get the feeling sometimes that I’m just preaching to the choir. Thanks for reading.

» on 05.06.12 @ 04:40 PM

Bruce, you have a lot of truth in what you are saying, but the first 5 words of your comments, and the fact that you want more freedom from the excessive overreaching federal government, are contradictory.
Other presidential candidates all speak of decreasing federal government intervention in our lives, and Obama has proven over the last few years that he just keeps wanting more and more federal powers to control every aspect of our lives, including what parents pack in their kids lunch boxes. The more we “get” from the fed. government, the more the government has the power to control us. And Obama is a giver… of course with our tax dollars.

Plus, Obama is in bed with the drug companies (not unlike other presidents in the past.) Think about the possible connection between that and the federal crackdown on dispensaries. The major pharmaceutical companies would LOVE to corner the market on the availability of marijuana. But they can’t… yet. 

And yes, the fed government has proven over and over again that they can pick and choose what they enforce. The more powers that are instituted at a federal level, the bigger the pie to pick and choose from.

I’d have a hell of a lot of respect for most of your comments if you had mentioned you supported Ron Paul or were a libertarian or something else. But you totally contradict yourself.

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