Pubdate: Sun, 25 Aug 2013
Source: San Francisco Chronicle (CA)
Copyright: 2013 Hearst Communications Inc.
Contact: http://www.sfgate.com/chronicle/submissions/#1
Website: http://www.sfgate.com/chronicle/
Details: http://www.mapinc.org/media/388
Author: Bob Egelko

IS THERE NEW WAY TO TARGET OWNERS?

The Obama administration has pressured landlords, banks and credit 
card companies to cut off services to medical marijuana dispensaries. 
Now the administration may have found a new target: armored car 
companies that carry cash for the pot clubs.

The executive director of Oakland's huge Harborside Health Center, 
already fighting a federal eviction suit, has used armored cars to 
pay tax collectors and other creditors because he can no longer use 
checks or credit cards. On Wednesday, he said, the armored car 
company told him it was terminating service on the orders of an 
unnamed federal agency.

The National Cannabis Industry Association said the same thing 
happened to several dispensaries in Colorado within the past month, 
under pressure from the U.S. Drug Enforcement Administration. 
Colorado and California are among 18 states that have legalized the 
medical use of marijuana.

"We don't have any written document that the DEA has actually sent to 
the (armored car) companies. We know that the services have stopped" 
for most Colorado dispensaries, said Steve Fox, the cannabis 
association's director of government relations.

Threat of action

He said dispensary operators have reported that the DEA has warned 
armored car companies it would take legal action, with the implied 
threat of prosecution for criminal conspiracy, if they continued to 
transport funds for marijuana suppliers.

Steve D'Angelo, executive director of Harborside, the nation's 
largest medical marijuana dispensary, said his armored car provider 
told him only that "they had been contacted by a federal agency and 
had been told they should no longer provide service to us."

He said he knows of one other Bay Area dispensary that had a similar 
experience, and believes it's happening throughout California.

"It's a potentially crippling tactic, and of course that's why 
they're doing it," D'Angelo said. He said Harborside is "scrambling" 
to find other ways to deliver cash to major creditors.

There was no comment from the transportation company, Dunbar Armored.

Karl Nichols, spokesman for the DEA's San Francisco field office, 
said he knows of no organized effort by the agency to contact armored 
car companies and order or advise them to steer clear of marijuana 
dispensaries. But he said the DEA, if contacted by a company, will 
point out "the hazards of doing business ... with a business that's 
violating the (federal drug) law."

Those hazards, he said, include possible prosecution for 
money-laundering or violating banking laws, because armored cars that 
handle large transactions are covered by bank regulations. Some DEA 
offices may have contacted armored car companies to convey such a 
message, Nichols said, but "as far as I know, it hasn't been done in 
the San Francisco area."

Opening a new front

Armored cars represent a new front in the campaign against pot 
dispensaries by an administration that, after taking office in 2009, 
said it would defer to states' laws on medical marijuana.

Citing statements by federal regulators, many banks and credit card 
companies have stopped doing business with dispensaries. The Internal 
Revenue Service has told some dispensaries, including Harborside, 
that they can no longer deduct employee pay and operating costs from 
their taxable income.

Several hundred California dispensaries have closed after federal 
prosecutors told their landlords, starting in October 2011, to evict 
them or face loss of their property. Harborside, backed by the city 
of Oakland, is contesting eviction and could go to trial next year.

In the meantime, D'Angelo said, the dispensary has to handle its cash 
on-site after federal action against its bank accounts and credit cards.

"Now," he said, "they have denied us any secure way to transport that 
cash to those whom we owe money."
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MAP posted-by: Jay Bergstrom